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- 8 March 2006
Industrial Relations Amendment Bill
Public Sector Employment Legislation Amendment Bill
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Page: 21202
Second Reading
Debate resumed from an earlier hour.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS [3.33 p.m.]: Earlier I mentioned that unemployment figures for Australia and America were calculated differently in that an American who has regular employment, even only an hour a week, is regarded as being employed whereas in Australia the Australian Bureau of Statistics works on the basis of a full-time job being a job for 25 hours a week. Because of that Australia's unemployment rate always looked worse than that of the United States of America. During that period Maximilian Walsh wrote an article in the Sydney Morning Herald pointing out how badly we were doing compared to the United States of America. I wrote to him and pointed out that the definition of "unemployment" was quite different in the two countries, but he did not reply.
The point was not lost on others, though, and Australia redefined "unemployment" closer to the definition used by the United States. Whether that came from a standard definition used by the OECD countries I am not certain, but it would be interesting to find out. Since that time Australian rates of unemployment have been much lower. It would be very interesting to know what our unemployment rate has been since "unemployment" was redefined. I believe "unemployment" was defined in a far more limited fashion so that "underemployment" was included as employment, thus the Australian figures looked much better.
There is some political sensitivity associated with this issue and the fact that John Howard boasts about increasing employment. There has been some casualisation of labour, which means that people receive some remuneration. However, they subsequently may become ineligible for benefits and be worse off at the bottom end of the scale because of that redefinition. That is very worrying. It is similar to the way the Government has redefined the term "on-time running of trains", which the media appears not to have noticed. There has been considerable media comment about the great improvements in the on-time running of trains. If a train fails to stop at all intermediate stations to meet its timetable, it will be seen to arrive at its destination on time. But clearly that practice is unsatisfactory from the point of view of people waiting at the intermediate station at which the train did not stop. Of course, they have to wait until the next scheduled train service arrives.
A recent article by Ross Gittins examined the unemployment rate in the United States of America and compared the employment rates of the United States of America and Australia. When I visited the United States of America to study workplace absence in 1985, I found that the Americans were very impressed by the fact that Australians received what amounted to a living wage and had far better pay and conditions for employment for permanent employees. Since that time there has been an immense casualisation of the labour force in Australia, but still, interestingly, from a practical point of view Australians who have a job are more likely to be able to raise a family and acquire their own home than Americans are.
In Australia it was not a big hassle if consumers did not tip, because here people were able to live on their wages. However, in the United States of America wages were derisory. Much of the labour in the United States was provided by an illegal labour force comprising people who had entered the country illegally from Mexico and other countries. That widespread, illegal labour force relied heavily on tips. That they were illegal immigrants with very low bargaining power pulled the whole wage structure down towards at the lower end of the socioeconomic scale. The effect of that on tipping practices, job security and perhaps the entire social fabric was certainly very great.
In contrast to that, a stable and employed society has a glue which holds it together and in which its people are stakeholders. People who are marginalised, however, are more desperate. If we have a survival of the fittest mentality, then of course in some dark alleyway someone will say, "Well, you have a survival of the fittest ethos. Your survival of the fittest is based on who has a job and can keep the boss happy. My survival of the fittest is based on who can grab the wallet and who is the strongest in this back alley in the dark." In a sense an ethos that is created at the top of the scale is often quite differently interpreted at the bottom of the scale. These factors should be borne in mind as we examine various social pathologies.
The Democrats adopted a holistic view a long time ago. The Howard Government has based its regressive reforms on ideology rather than on evidence. The evidence provided by the article written by Ross Gittins suggests that Australia is doing just as well as the United States of America in terms of employment.
The fact that we have had a decent wage structure for our lower paid workers has not adversely affected our international performance. If one were contemplating why the Australian economy does or does not perform well, my view would be that the additional complexity imposed by different State and Commonwealth governments with different regulations covering companies would clearly be an impediment to Australian industry. I believe that is a far more significant impediment than the fact that people at the bottom of the employment spectrum obtain a decent wage. The article by Ross Gittins in yesterday's Sydney Morning Herald clearly made that point. The Howard Government could have negotiated with the States for a unitary system, I think with some benefit. However, it performed so aggressively that the States are now passing legislation to try to put workers who are deemed State employees—workers in many public service organisations and statutory corporations, which previously were public service organisations—under State awards and thus protect them from the Howard Government's WorkChoices legislation.
John Howard did very well at the last election. I believe he blackmailed people because they were concerned they would not be able to pay off their mortgages. The family home had been so favourably treated by the taxation system that there was a most unwise national resource allocation or concentration—
[Interruption]
Madam Deputy-President, I ask you to ask interjectors to desist.
The DEPUTY-PRESIDENT (The Hon. Kayee Griffin): Order! I remind members that interjections are disorderly at all times.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: The distorting effect of so much money going into real estate resulted in people pushing up the price of real estate and that has made housing affordability more difficult. People in the marginal electorates have taken on far greater mortgages and John Howard has convinced them that he will keep down the interest rates and that they will not rise while he remains in power. In a sense, he has locked us into riches in real estate and that has had a big effect on the national economy. Perhaps the boom created by the growth in the economies of China and India—
[Interruption]
The DEPUTY-PRESIDENT (The Hon. Kayee Griffin): Order! Conversation between members across the Chamber disturbs the concentration of the member with the call. I again remind members—and that includes the Deputy Leader of the Opposition—that interjections are disorderly.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: John Howard might have succeeded. The economy is booming and he has got credit for that. It would have been far better for the Commonwealth Government to come to an agreement with the States on the content of a unitary system rather than having this radical and unprotected situation for people at the bottom of the employment pile. It will have an immensely deleterious effect on the fabric of Australian society if we take away from lower paid workers their ability to participate in the benefits of society and a huge working poor will develop. Some people might say, "I am working harder and harder for virtually nothing and others who work the same hours as I do receive outrageous wages."
Some time ago I used to take my son to a childcare facility in the city. That facility could not retain its staff despite the fact that it charged a fee of $62 a day for each child. Childcare workers' wages were extremely low, thus compelling them to commute long distances out of town—the only place where they could find affordable housing. As soon as they obtained jobs nearer their homes they had no need to travel into the city. Cleaning staff and those people who perform more menial tasks have the same problem, so it is hard to find people who are willing to perform those tasks. It could be argued that that will push up wages, but that is cold comfort in this race to the bottom. If cleaners are paid a reasonable wage that will not bankrupt organisations that are competing in the environment. A comparison of employment figures in Australia with the figures in the United States of America suggests that that is the case. So I find important the small increment that is being paid to people at the lower end of the scale for a higher participation rate.
For nine years the Australian Democrats was the only party to stand in the way of the Howard Government's passing its industrial relations reforms. People in the union movement and members of the Labor Party do not wish to admit that these so-called legislative reforms or changes—I am not sure whether I should use the word "reform" to describe what John Howard is doing—were passed only after the Democrats lost the balance of power. In 1996 the Democrats supported some changes, after 176 Democrat amendments restored a fairer balance. Those 1996 reforms occurred at a time when the economy was not booming, as it is in during the passage of this latest tranche of reforms.
Those 1996 reforms were negotiated with the Democrats under the leadership of Cheryl Kernot who, at that time, was not particularly pro-union. The Labor Party greatly criticised Cheryl Kernot, but that did not stop her from jumping ship and going onto the Labor team. Her crime—supporting the 1996 industrial relations tranche of reforms—could not have been such a big issue for the Labor Party, because it certainly embraced her when she joined. The fact that the party treated her poorly when she got there seems to be par for the course when we consider recent happenings in the Victorian branch of the Australian Labor Party.
So it is a bit rich for members of the Labor Party to criticise the Democrats. Honourable members should remember that the balance provided by the Democrats, and the fairness they brought to this debate, is extremely relevant and important. It was also a bit rich for the Leader of the Opposition to go on about the behaviour of former Premier Bob Carr, who gave victory signs as he snuck into Parliament House from the State Library through the car park when the workers compensation legislation was being debated in 2001. One might ask: How did that workers compensation legislation get through? Crossbench membership was quite delicately balanced and there was no guarantee that it would go through. What happened? The Liberal Party said, "Beauty mate. We will support you. We will criticise you for not looking after the workers, but we certainly will not look after them—no sir, not us! We will support the legislation." The legislation, which was passed, received the support of both Liberal and Labor members of Parliament.
There was a very good chance that, with the support of members on the crossbenches, the Liberals could have prevented those reforms and we would have had a better workers compensation system. I have said in many debates on workers compensation that we could have had a system that gave workers a fairer deal. However, that has never been done. Workers compensation is seen as an insurance and money problem when it is a safety, human, injury and medical problem. That reflects no credit on either of the major parties in this House. John Howard's reforms had to wait until he had complete control of the Senate, where I believe ideology triumphed over good policy. I support these bills because we are trying to achieve some sort of balance. It is ironic that it is only in the New South Wales public sector that we can retain an equitable arbitration system. Of course, the Fair Pay Commission is an unknown quantity.
No doubt a number of members of this House would have seen the program on the 7.30 Report about the new head of the Fair Pay Commission, heard about his interest in organ music and the church, and his academic credentials. As he put it, he has a clean slate in relation to his experience of lower paid workers and their life troubles. It will be interesting to see how he responds, within that ethnical, religious and academic framework, when he confronts those issues. The Fair Pay Commission that he is to set up will be an academically run body. It is about to be given form within the framework of the legislation. If this man is too kind there is the possibility that he will be replaced. It will be interesting to see what happens if the market has a huge amount of say, as opposed to considerations of equity and the need for a minimum wage. In my view the framework is doctrinal and worrying. The Australian Democrats support the bills, which will mitigate the effect of the federal legislation for at least some workers.
The Hon. GREG DONNELLY [3.50 p.m.]: I am pleased to make a contribution to the debate on these important bills. It was challenging for most Government members to watch the Leader of the Opposition maintain a straight face during the course of his contribution to the debate this morning. He was so solemn, so sure and so passionate about the position he was presenting. We sat back and wondered how he could possibly be saying so much in his contribution. He questioned why this legislation was before the House. It is very clear. I can think of 186,000 reasons why these bills are before the House. This legislation will be the first stage in protecting many workers in New South Wales from the pernicious effects of the Commonwealth legislation. Immediately after the Public Sector Employment Legislation Amendment Bill is passed, 186,000 workers and their families will be protected from the direct king hit of the Howard Government's legislation.
In commenting on the legislation, which will affect so many workers in this State, I will confine my observations to a few key themes that run through the Commonwealth Act. The Act is very comprehensive. It is radical legislation and time will not permit a complete critique of it, but I will attempt to break it down into some key themes and comment briefly on them. The first key issue is that the new Act radically changes the way in which the wages and working conditions of employees will be determined. We all know that the award system has been around for a long time, and that it provides a comprehensive set of wages and working conditions for employees. Flowing from that award system in the past have been agreements, collective or otherwise, and Australian workplace agreements, but in all instances those agreements had to be tested using a no-disadvantage test that compared proposed agreements with the underpinning awards.
The new legislation is most significant because it basically disposes of the no-disadvantage test. We now have a situation whereby, going forward, workers will only have their wages and conditions tested against five basic entitlements. In other words, the award system is put into the shredder, leaving five minimum statutory entitlements. All that any employer in Australia will have to do is ensure that those five minimum entitlements, and nothing else, are met. I will just recap on those five entitlements. There will be a new or hourly rate of pay, yet to be determined. There will be four weeks of annual leave of which two weeks can be cashed out. There will be 10 days of personal and carer's leave, which will include an employee's sick leave, plus two additional days of carer's leave, which will be unpaid, and two days of paid compassionate leave. There will be 52 weeks of unpaid parental leave. Fifthly, and finally, there will be a maximum of 38 ordinary hours to be worked, but that is to be averaged over a 52-week period.
That is all that employers will have to meet as a minimum in the future. Nothing other than those five entitlements will have to be met by an employer who engages employees in the future. That, of course, raises the issue of what can be left out. We could spend a long time talking about what can be left out, but let me perhaps just touch on a few points. With regard to key issues that can be left out under the new Commonwealth legislation, the whole notion of working one's hours over five days a week will completely disappear. Under the new legislation there will be absolutely no prohibition on employers engaging a person to work seven days a week—in fact continuously if they wanted to, because there is no obligation to provide any breaks for an employee by way of days off. It is quite possible that employees could be put on a rostering arrangement where they worked one day after another, perhaps given a day off here or a day off there between shifts, but no fixed roster.
Just think about that for the moment. It is virtually being on call and required to work at the whim of an employer who may ring up and say, "Come in." The next issue worth reflecting on is the minimum number of hours to be worked in a day, or indeed the maximum number of hours to be worked in a day. Most awards provide for some minimum and some maximum hours, which seem to be a reasonable thing. One would think it unreasonable to require an employee to work 12 hours a day, day in and day out, but under the new "NoChoices" legislation, that will be the situation. People will have no choice. They could be required to work 12 hours, or 13 or 14. In fact, they could be required to work 24 hours in a day and nothing in the legislation prohibits that.
Another issue is what happens to a person with regard to public holidays. Senator Barnaby Joyce from Queensland made great play of this in the Commonwealth Parliament. He talked about protecting certain iconic public holidays. Honourable members will be aware that some protection will be afforded by the legislation with regard to some public holidays, but that protection relates to the issue of being required to work on the public holidays; it does not deal with the issue of wages for public holidays. Entitlement to a day's pay for an employee who takes a day off on a public holiday is not covered under the new legislation. In other words, employees who do not work on a public holiday may not be paid for taking the day off, which is pretty extraordinary. At the moment under collective agreements and awards, when an employee takes a day off that coincides with a public holiday, that employee receives a full day's pay. That may not be the case in the future for many workers.
The notion of having a tea break after working four or five hours, which seems to be a reasonable proposition, is also no longer a requirement. Under the new legislation a person can be required to work for any number of hours with no entitlement to a rest pause. The 17½ per cent annual leave loading that many workers enjoy—an arrangement that has been in place for many years—is not a requirement under the Commonwealth legislation. You can bet your bottom dollar that it will be hooked out of employees' work arrangements very quickly once the new legislation gets under way. The issue of penalty rates and shift loadings, a common award entitlement and an entitlement in agreements, will also disappear very quickly. The new Commonwealth legislation provides no protection with regard to those types of entitlements. Once again, employers in many industries will move quickly to take away those entitlements from workers.
The other issue worth mentioning, which is no longer a requirement under the Commonwealth legislation, is the right for employees to know what they are employed as. It is generally the case that people understand they are employed on a full-time basis with a full-time job, or part-time, or as a casual. That provides employees with at least some certainty about what their workplace arrangements are. Under the legislation the whole notion of having a contract of employment can simply be reduced to being employed on an hourly arrangement. So an employer is not required to tell workers whether they are employed full time or part time or casual. People could be employed notionally and told, "This is your rate of pay, this is what you will be reimbursed and that is the end of the matter." Employers are not obliged to give employees any certainty regarding their employment contracts.
It is clear from those few examples the devastation that removing the no-disadvantage test will cause. But things are even worse. The legislation provides for only five basic entitlements, but the Office of the Employment Advocate has no means of checking whether those minimum requirements are met. Under the legislation the employer is required only to submit to the Office of the Employment Advocate a declaration that the minimum employee entitlements are being provided for in the workplace. As bad as the old no-disadvantage test was—and I do not endorse it at all—at least it allowed for a test regarding award rates and conditions. When that test was done the Office of the Employment Advocate was obliged to scrutinise the submitted agreements to ascertain whether they met the minimum requirements. But that will no longer occur. In future employers will probably submit electronically forms outlining an agreement and stating that it meets the minimum requirements. Those forms will then be filed, not in a filing cabinet but on a computer hard drive somewhere, and that will be the end of that. No-one will ever test to see whether the provisions are being met. It is pretty obvious even to Blind Freddy that that is a recipe for disaster. The comprehensive wage and working conditions of many workers will unravel very quickly in the not too distant future.
Workers in New South Wales, and indeed around Australia, have enjoyed good unfair dismissal rights. That is no exaggeration. Workers who had been treated unfairly had the opportunity to go to the umpire—the commission—and argue their case. The commission would adjudicate on the matter and decide whether the workers had been given a fair go. John Howard crows constantly about how he is in touch with the common people and the workers. He claims to believe in a fair go for all. But is it fair that employers can act unilaterally against a worker and terminate his or her contract of employment for no good reason? Is it fair that such an action is not contested? That is the brave new world of "NoChoices".
Under the new legislation employees of corporations with fewer than 100 workers will lose their right to pursue unfair dismissal claims. It is gone; it is over. When the new legislation kicks in about four million workers in this country will lose their right to contest their dismissal when their employer treats them unfairly. I cannot reconcile that with the notion of a fair go for all. Some might say that, as an ex-union official, I bring some baggage to this debate. But let us consider some of the comments made about the Federal legislation. In September last year the Chief Executive of the Australian Industry Group, Heather Ridout, was quizzed about the change to the unfair dismissal laws and its impact on Australian employers. She admitted that there was no substance to the claim that removing the right to contest an unfair dismissal would lead to a substantial increase in employment. During a television interview Ms Ridout said:
You are not going to go around putting on more people just because the unfair dismissal termination laws have changed … So I really never accepted those figures.
Ms Ridout, who represents a large employer organisation, admitted in September last year—in the midst of the industrial relations debate—that removing the right of employees to contest unfair dismissals would do nothing to improve employment. That argument is a sham. It is not true. Removing that employee right will have no demonstrable impact on improving employment opportunities in this country. Furthermore, at a major industrial relations conference last year the highly regarded Professor Mark Wooden—who had previously been a strong supporter of the Federal Government's industrial relations policy—considered the change to the unfair dismissal laws, and said:
Among larger businesses, the gains are likely to be small or even negative. The cost, on the other hand, is great uncertainty and insecurity for some Australian families, directly contrary to the aims of the reform agenda.
So while John Howard and the Coalition were arguing that the new Federal industrial relations legislation was necessary to enhance the general economic environment in Australia, to provide more employment opportunities and so on, others were saying exactly the opposite. They said that removing employees' unfair dismissal rights would not improve employment opportunities substantially. In fact, they said that the new legislation would have the opposite effect by causing extraordinary and profound insecurity among workers throughout Australia.
Wage fixation is a most important issue. We have enjoyed in this country a quite unique wage-fixing system—which, I might add, the unions have not always been happy with. National and State wage case decisions have not always produced the wage increases that the unions desired. In fact, I cannot think of too many occasions when the Australian Council of Trade Unions or UnionsNSW secured the full amount of the claims that they put before their respective tribunals. The fact is that the tribunal system in Australia through the wage-case mechanisms has enabled workers—skilled, semi-skilled and unskilled—who are covered by awards to get a fair shake when wage increases are considered. Why is the Federal Coalition Government—with the full support of its counterparts in New South Wales—supporting so strongly the new Australian Fair Pay Commission? The reason must be that it will create a new arrangement that will produce wage increases that are lower than those that employees received under the tribunal system.
Let us examine the facts to identify the difference between reality and the Howard Government's rhetoric. If the Federal Government's claims in national wage case hearings in the past nine years had been successful Australian workers would be $50 worse off than they are at present. Fortunately, the commission decided ultimately in favour of the increases and against the Federal Government's claims. That simple analysis gives us the full picture. That is why the Howard Government stripped the commission of its wage-fixing powers—which it simply did not like—and created a new body called the Australian Fair Pay Commission, which it expects will deliver lower wage outcomes.
We can speculate for a long time about what the increase from the Australian Fair Pay Commission is going to be. Of course, to be fair, the Australian Fair Pay Commission has not heard the first set of arguments and presentations to determine what the increase will be. Up until now the national wage case has been an annual event when workers have been assured of receiving wage increases. if not every 12 months, very close to it. The new Australian Fair Pay Commission will not be required to conduct an annual review. In fact, quite specifically the Australian Fair Pay Commission will only from time to time—I emphasise from time to time—consider making adjustments to minimum rates of pay. Honourable members can understand what that means.
We know that the Australian Fair Pay Commission, on the very best case scenario, will only produce its first decision at the back-end of this year or, indeed, early next year, which will lead to some increase in minimum rates of pay. Under the old system, from about May or June this year, workers would have expected an annual increase through the national wage case—because that is when it was heard and the outcome was determined last year. But we will have a slippage of approximately six months or more. We all know that that slippage means a reduction in people's pay because of the ongoing incremental increase of inflation. We know that if the next wage increase is pushed further into the future, there will be a reduction in the real take-home pay of people.
That is the precise reason why the Howard Government, fully supported by the Coalition in New South Wales, decided to strip away from the commission its wage fixing powers and put them into a new body, essentially a bureaucratic body, which will only from time to time look at making adjustments to minimum rates of pay. Even though the pernicious "NoChoices" legislation has not yet got under way, we know there is a slippage of at least six months for ordinary workers, on the very best scenario in getting a wage increase.
In relation to gutting the role of the Australian Industrial Relations Commission, which is the only way I can describe what has happened, it is worth reflecting on what happened in 1996. The stripping away of the power and jurisdiction of that institution has not just happened under the current legislation; it goes right back to 1996 and to the introduction of the Workplace Relations Act. We well and clearly remember the damage Mr Peter Reith did through that legislation.
The Hon. Patricia Forsythe: There have been three elections since then. The people of Australia support what—
The Hon. GREG DONNELLY: No; industrial relations reform was not put to the people in the lead-up to the last Federal election. In fact, a deliberate silence was visited on the whole issue and it was only when it secured a majority in the Senate that the Government moved so quickly to introduce these industrial relation changes. In relation to the 1996 legislation, the then commission's power to require an employer to negotiate with a union in good faith, and vice versa, was removed. One wonders why. It seems sensible that if parties are having difficulty resolving an issue both the employer and the employee should seek some direction in terms of requiring the other party to deal with acting in good faith, but that was removed.
At that time a very comprehensive number of entitlements in Federal awards was stripped back to 20. We also had the so-called paid rates award, and the power of the commission to deal with rates of pay above the minimum, also removed. I could provide a long list of other matters that were taken away from the commission, but the above points are an indication of what was removed at that time. It would take me all afternoon to examine and systematically address all the matters that have been removed under the new "NoChoices" legislation. However, I will touch on a small number.
The first is the wholesale removal of the commission's power to certify either union or non-union negotiated agreements. The issue is that even if parties genuinely enter into agreements, that is, the union and the employer, or an employer directly with his/her employees, the commission will have no scrutiny power over those agreements. In other words, those agreements will not come before a tribunal and be objectively scrutinised to see that they are okay, that they meet minimum requirements under the legislation, and that they have been freely entered into.
No, that now disappears completely and like the pernicious individual Australian Workplace Agreements, both non-union and union agreements will be simply pushed off to the Office of the Employment Advocate [OEA], where they will not even be scrutinised but merely filed electronically. They will simply be emailed to the OEA, ticked off as having been received by pressing a key on the keyboard on a computer, and filed into cyberspace.
There can be no doubt about the effect the legislation will have on individual workers. I invite honourable members to look closely at the survey conducted by the University of Sydney on the Court Liberal Government laws passed in Western Australia. I do not intend to go through that research in detail but it is well worth honourable members' doing so because the survey examined 200 Workplace Agreements entered into at that time.
The analysis of the Western Australia experience showed that in 1994 to 1996 about 5 per cent of employees were on agreements that provided ordinary rates of pay below the award. By 1998 that figure had increased considerably to 25 per cent. Of those agreements, 75.5 per cent contained no pay increases, 67 per cent did not contain overtime provisions, 74 per cent contained no penalty rates for working on weekends, 78 per cent had hours of work as Monday to Sunday, meaning that people could be worked seven consecutive days, and only 3 per cent contained annual leave loading.
I conclude by noting that we will not have to wait to see the effects of this vicious Federal legislation—which still has not commenced because the Commonwealth Government is deliberately refusing to gazette the regulations, in order to spike the High Court case that is to get under way in May—because it has already been tried in another State, in the 1990s. That State had a Coalition government, and the impact of such legislation on ordinary workers is there for all to see.
The Hon. IAN WEST [4.20 p.m.]: I am pleased to support the Public Sector Employment Legislation Amendment Bill and the cognate bill. I support the comments of my colleagues the Hon. Greg Donnelly, the Hon. Dr Arthur Chesterfield-Evans and others who have spoken in support of the legislation and in Opposition to the WorkChoices—no choices for workers—legislation that has been put through the Federal Parliament and is the subject of a High Court challenge. That Federal legislation is currently being rolled out in the community by employers who are conscious of the fact that its impact on the Australian work force will be draconian and will have a serious effect on their morale, their tenure and their security, and will undermine social cohesion in the community at large.
The Federal legislation has highlighted the need in New South Wales for a safety net to protect as many workers and employees as possible. The Federal Act has destroyed the social fabric of our community. It is not a matter of sitting around and waiting to see the serious and adverse effects of that Federal legislation; those effects are already being felt, and even more so day by day by tens of thousand if not millions of workers. The tenets of a fair go, of equality between employees and employers in the workplace, and of some semblance of equality in the bargaining process have been absolutely decimated by the Federal legislation. I congratulate the State Minister and the New South Wales Labor Government on introducing the legislation in an effort to redress the effects of that cruel Federal legislation.
The ability of people to exercise their right to freedom of association, to collective bargaining, and to access an independent umpire, and the entitlement of the work force generally to engage in collective bargaining with a view to a common rule award, an industry award, and an award that ensures fairness and equity for not only the workers but the whole of the industry in which they work, has been a tenet of our industrial relations system and part of our social fabric for many, many decades—indeed, since the passing of the Federal Conciliation and Arbitration Act of 1904 and the corresponding legislation establishing State jurisdictions.
The Federal WorkChoices—no choices for workers—legislation has pitted individual worker against individual worker but, more insidiously, the individual worker against their employer. Loyalty is out the window, and employment relationships will have no more import than buying a packet of chips at the local shop. That will lead to employers and employees losing out badly. Those most affected by the Federal legislation are the marginalised, the young, and females, who, in the main, are in the most vulnerable of occupations. Their ability to bargain is further diminished and will be utterly decimated when they are required to bargain individually. So the wages and conditions of the female work force are falling further and further behind. WorkChoices is affecting our skills base, and it is absolutely decimating apprenticeships.
What about the immigrants, those who come from lands afar to this great southern land in pursuit of a better life? What do they find? They are pitted against an employer who has access to every conceivable resource and professional body for advice: lawyers and others professionals who understand how the industrial relations system works and how the Federal WorkChoices—no choices for workers—legislation works. It has some 700-odd pages, together with another 700-odd pages of regulation.
What about the immigrant workers who come to this country, have language difficulties, and do not know abut or cannot understand the Federal legislation they are supposed to be working under? Are they expected to bargain individually with an employer regarding wages and conditions? Anyone who believes for one moment that that person is in an equal bargaining position with their employer believes in the tooth fairy at the bottom of the garden and Santa Claus. Apparently some in this place believe in fairies at the bottom of the garden and Santa Claus.
Leaving them aside, I would say that the vast majority of members of this House would appreciate that the Federal Government's assertions about so-called equality in the bargaining process is nothing but a con job. It knows that. Everyone knows it. We all know that the only way to ensure any semblance of equality in a bargaining process is by allowing workers to collectively bargain. You do not have to be a Rhodes scholar to work that out; anyone with half a brain can comprehend how the Federal legislation works.
The impact of the Federal legislation on the family is absolutely draconian. John Howard, the battler's friend, is now showing his true colours. Who is his target? It is workers who rely on the safety net, workers without sufficient bargaining power in the labour market to secure an enterprise bargain. In the main they are women trying to balance paid work with family responsibilities, and young people trying to gain a financial foothold. Currently the safety net, which is presided over by the State and Federal industrial relations commissions, is that piece of the jigsaw and that democratic part of the wage system that maintains the country's ethos of fairness and equity
As I said, WorkChoices—no choices for workers—does not provide for collective bargaining. It pits individuals against bosses. But for many women, young people and casual employees the absence of collective bargaining, or a national minimum determination via a proper process, inevitably means a fall in their real wages and more hours worked for less money. The Federal Government is putting the boot into Australian workers and their families.
Over the years the State and Federal industrial relations commissions have played a crucial role as independent umpires in establishing important protections for working parents. The right to 52 weeks unpaid maternity leave, which was granted in 1979, and the right to five days paid carers leave to care for a family or household member, which was granted in 1995, are now the established standard in the community. Recently the Australia Industrial Relations Commission continued along this socially responsible path with its decision to provide women with the right to request part-time work when they returned from maternity leave, or to request an additional 12-months parental leave. Unfortunately, it may be the last decision of its kind, with commission test cases becoming a thing of the past under Federal Government changes.
It will be up to disempowered workers to negotiate new family-friendly provisions, and we know what an uphill battle that will be without a collective organisation representing them before an independent umpire. The Federal Government has decided not to include the new award standard for parental leave in the new legislated minimum standards. The provisions that have been allowed are so skeletal that most of them probably are not even worth worrying about. The 38-hour week is an example. It is an insult to the intelligence of the Australian work force to tell them that they have a 38-hour week averaged over 52 weeks. It is no wonder that day by day people are becoming more and more disillusioned with the lies and deceit coming from the Federal arena.
The provisions of WorkChoices, especially those that promote individual contracts based on minimum conditions at the expense of collective bargaining, will have an absolutely devastating impact on families. A Parliamentary Library research paper on work and family policies as industrial employment entitlements published in 2004 confirms that Australian workplace agreements [AWA] are likely to result in increased working hours. The paper concluded by claiming that the idea that AWAs enhance work and family policies is based on patchy evidence, and that, instead, AWAs are more likely to be used to extend work hours than to reduce them. That is being polite and diplomatic.
Since the legislation has come into existence I have not been able to find a workplace agreement that has reduced working hours. I challenge anyone to provide me with a copy of a workplace agreement that has reduced working hours. I would be extremely pleased to see one. When you add the additional pressure that will be experienced under the fire-at-will unfair dismissal exemptions, the capacity to balance work and family responsibilities recedes rapidly. Research conducted by the Department of Employment and Workplace Relations showed that Australian workplace agreements do little to assist workers to balance their work and family responsibilities. The research showed that in 2004, 93 per cent of private sector employees on AWAs had no additional family-friendly rights in their individual agreements. I would love to see the 7 per cent who supposedly are enjoying additional family-friendly rights.
In a family impact statement produced to fill in the void left by the Federal Government when it introduced the legislation Don Edgar, a noted academic in the field of family studies, said that in the nexus between family needs and appropriate wage rates the proposed changes are a recipe for a more savage workplace, a less caring society, and an individualistic, competitive, auction room with no collective spirit.
The Federal Government's bill has—not will—adversely affected women, who, as a group, are more likely to be award dependent and less likely to have bargaining power to achieve fair and decent outcomes. I know that to balance the debate we say that individuals who supposedly have more bargaining power will be in a position to achieve fair and decent outcomes. I would be interested to hear from women who are in a position to bargain individually for increased wages and conditions in their workplace. I would be interested to hear how they went about it and the unique bargaining powers that enabled them to increase their wages and conditions.
It would be interesting to hear what unique abilities these women—these individuals working in a workplace in which they have little or no bargaining power—have that put them in such a strong bargaining position. Women still carry a disproportionate responsibility for caring for families and household responsibilities. When women are forced to bargain from the reduced position of the Australian Fair Pay and Conditions Standard [AFPCS] they will face the prospect of being forced to trade away pay and other conditions to obtain conditions such as leave for family purposes and flexible hours. In this brave new world of so-called freedoms and choices people have to bargain away what they already have in order to achieve something else. Usually they bargain away something that is more valuable than what they get.
For example, if I am asked to bargain away a week's annual leave in return for a pay increase, a week's annual leave that I receive every year at my current rate of pay, anyone who thinks about it for a moment will know that what I am bargaining away is worth a hell of a lot more than a monetary increase in my hourly rate of pay, which is completely and utterly eroded by inflation over time. But what is not eroded is the fact that I will lose one week's pay forever, every year, at whatever the current rate of pay might be. The so-called bargaining arrangements have invaded and colonised the industrial relations process to such an extent that employers must be smiling from ear to ear about the gains they are making. I have great pleasure in supporting these bills, which I commend to the House.
The Hon. HENRY TSANG (Parliamentary Secretary) [4.40 p.m.], in reply: On behalf of the Government I thank all honourable members for their contributions to the debate. The Howard Government's WorkChoices legislation compels all incorporated employers in New South Wales and their employees into the Federal industrial relations system—without their consent. This legislation is complex and prescriptive, being up to five times larger than the State Industrial Relations Act. The legislation dictates to employers and employees the types of matters that they can, and cannot, agree on in agreements, while at the same time cuts important conditions from the industrial awards underpinning such arrangements.
Under WorkChoices, incorporated employers with fewer than 100 employees will be able to sack their employees unfairly and employees will have no recourse to the Industrial Relations Commission. Further, unscrupulous employers will be in a position to foist on their employees workplace agreements that remove hard-won conditions, including weekend penalty rates and uniform allowances. This legislation is an attack on the right of working Australians to a fair go. It is a blatant power shift in favour of employers and will result in a more acrimonious and divisive industrial relations environment. The losers in this new WorkChoices environment are likely to be decent, ordinary hardworking Australians and their families. The New South Wales Government opposes WorkChoices as an inflammatory system of regulation that will restrict the choices available to employers and employees, and remove important protections from employees from all walks of life.
With respect to the urgency for the bill, the short time frames have been dictated by the Federal Government. Without any clarity about the commencement of WorkChoices or the content or timing of the WorkChoices regulations, we have been placed in a situation where this might be our last opportunity to provide a legislative response to WorkChoices to the extent that we can. Our preference would have been for a more measured and considered approach after seeing the regulations.
With respect to the public sector, the Government is legislating now to ensure that those public sector employees who could be covered by the WorkChoices legislation will remain within the State industrial relations system. By having the bill passed prior to the commencement of WorkChoices the Government is seeking to avoid any potential confusion or complexities. The passing of this legislation will ensure that these workers are not transferred to the Federal industrial relations system. With regard to the industrial relations amendments, identifying consent awards as agreements for constitutional corporations is particularly time critical. For these provisions to have effect they must be enacted before WorkChoices commences. If they are not, there are potentially hundreds of agreements for future wage increases that have been reached between parties at the enterprise level that will be lost.
As has been explained, the Industrial Relations Amendment Bill proposes three amendments to the Industrial Relations Act 1996. The first of these is that if the industrial parties, employers and unions, negotiate a common law agreement or arrangement, and they agree to give the New South Wales Industrial Relations Commission a role in resolving disputes about the application of the agreement or arrangement, then the commission will be empowered to have that role. It should be emphasised that the source of the commission's power in these sorts of cases will be the agreement or arrangement, and the agreement or arrangement alone. The commission will not be deploying its conciliation and arbitration powers under the Industrial Relations Act 1996 at large but will exercise those powers that the industrial parties confer on it by means of the agreement or arrangement. What the commission will be doing is providing its vast expertise and experience in resolving and settling disputes.
This is a useful tool in two main ways. Firstly, it gives the parties another option for making agreements if the State system is no longer available and they do not want to use the WorkChoices system. Secondly, it gives the parties ready access to an expert tribunal as a means of supporting a co-operative industrial relationship. These arrangements will be governed by a new section 146A of the Act, and it will be observed that the scheme involves: industrial parties agreeing in writing that a dispute concerning conditions of employment or engagement may be referred by either contracting party for resolution by the New South Wales Industrial Relations Commission; the commission's exercise of powers in resolution of the dispute being only as specified in that referral agreement; the commission's powers encompassing conciliation and arbitration of a dispute and the granting of specific unfair dismissal or unfair contracts relief; and any resultant commission decision being binding on the parties only in so far as the referral agreement operates to make it so binding.
Proposed new section 146A does not in any way concern itself with the mechanics, practicalities and Industrial Relations Act enforcement of a drafted referral agreement. Certainly it is envisaged that a typical referral agreement to which proposed section 146A will apply may contain the following features: copying of the terms of existing applicable New South Wales industrial instruments within the agreement as enforceable provisions, notwithstanding that the WorkChoices legislation has acted to render such an instrument inoperative for the parties in the New South Wales industrial relations scheme, including conferral upon the commission of all the dispute resolution functions found in the relevant State award or agreement; conferring jurisdiction on the New South Wales commission, upon reference by a party, to conciliate, arbitrate or otherwise hear and determine proceedings in respect of a dispute; providing that a party is not to take objection to the conferred jurisdiction of the New South Wales commission; incorporating resultant New South Wales commission decisions as a provision of the contract and enforceable thereunder; and empowering a union to commence proceedings on behalf of a worker relating to an alleged breach of the contract.
The second amendment to the Act proposed by this bill is that those enterprise consent awards in the New South Wales system that will be affected by WorkChoices are to be deemed enterprise agreements. This is aimed at ensuring that they transfer into the WorkChoices system with the maximum advantage to the employees and employers subject to them. By way of background, a State award transferring to the Federal system does so as a Nominal Agreement Preserving a State Award [NAPSA]. Amongst other things, this means that any future pay rises agreed by the parties as parts of the award are specifically prohibited by the WorkChoices legislation. Given that agreed future pay rises are a common feature of such consent arrangements, this nasty legislation will deprive employees of pay rises genuinely and legitimately agreed to, and will deprive employers of the certainty of knowing what pay rises they are committed to, safe in the knowledge that no extra claim will be made.
By contrast, future pay rises in a State agreement transferring to the Federal system remain untouched, so there is an obvious advantage in being subject to a State agreement rather than an award. Given that enterprise consent awards are made with, and cannot be made without, the consent of the parties, in substance they are no different from an enterprise agreement, and so should be treated as such. The bill, therefore, contains a provision deeming awards of this nature to be State enterprise agreements. The bill allows also the nominal expiry date to be the date already agreed to by the parties, so that, in contrast to WorkChoices, their wishes are not simply ignored and overridden. The third and final set of amendments propose some minor administrative amendments to the Industrial Relations Act 1996 to make it easier for the New South Wales commission to respond to the needs of the industrial parties.
That will be done firstly by amending section 159 of the Industrial Relations Act 1996 to clarify that the general power in that section includes a specific power to determine the way in which a matter or a class of matters is listed before the commission and to determine the allocation of matters or the way in which such matters are to be included. Secondly, it is proposed to amend section 156 (2) of the Act to require that a full bench of the commission must include at least one presidential member and at least one member who is a commissioner or, if no commissioner is available, one non-judicial presidential member. That would open up the membership of full benches so that non-judicial deputy presidents may be used to fill the non-judicial role on a full bench.
In the immediate term, those proposals will allow the president to prioritise matters likely to be affected by the commencement of WorkChoices. In the longer term, the commission's capacity to deal with emerging industrial relations issues will be improved. The paramount concern of this bill is simple and straightforward: to address what we think are the most critical issues that need to be dealt with before WorkChoices starts. Above and beyond that, there are many issues that may well require a legislative response after WorkChoices starts, and that is something that the Government will think about very carefully over the next few months. We are doing this not because we want to but because we have been forced to. We can see no other way of protecting workers in New South Wales from the worst excesses of the Federal Government's WorkChoices legislation.
I refer now to the Public Sector Employment Legislation Amendment Bill. The Leader of the Opposition spent some time addressing the position of police, particularly why the Police Association of New South Wales had not been consulted. I make it clear that the Public Sector Employment Legislation Amendment Bill does not cover police. Police officers are employed by the Government of New South Wales in the service of the Crown. Police officers work for NSW Police, and NSW Police is not a corporation. Only employees of statutory corporations need to be protected from WorkChoices. New South Wales police will not be covered by the Federal industrial relations system. New South Wales police will continue to be part of the New South Wales public sector and have rights to mobility and recognition of service for leave entitlements. I am pleased to be in a position to assure the Leader of the Opposition that the New South Wales police service and the Police Association of New South Wales not only had every opportunity to be consulted about the bill but also have lent their full support to the proposals.
I now address the concern of Reverend the Hon. Fred Nile with reference to Crown employment. The Government has used the phrase "the Government of New South Wales in the service of the Crown". That wording is currently used in section 5 of the Public Sector Employment and Management Act and has an established meaning in case law. The Government has used the existing wording of the Act so as not to affect the application and interpretation of the existing legislation. There is nothing inconsistent in the use of that wording, nor is the Government being opportunistic in relying on "Crown employment" as a means of protecting New South Wales workers. The key to having New South Wales public sector employees outside WorkChoices is to not have staff employed by constitutional corporations. The legislation could have quite easily specified instead that staff were employed "by the Government of New South Wales in the service of the State" and probably would have the same meaning, and would have achieved the primary effect of insulating workers from WorkChoices.
I refer now to schedule 3 hospitals. Comparisons have been drawn between prescribed affiliated health organisations, State-owned corporations and local councils. The bill already proposes to cover prescribed affiliated health organisations that are religious and charitable institutions that deliver health services as part of the public health system. Those bodies are currently part of the New South Wales Health Service. Further, a Crown body—the Health Administration Corporation—is currently responsible for certain employment-related functions in relation to those staff. Inclusion of those entities is largely seeking to maintain the status quo. It is also important to point out that the bill does not automatically cover those institutions. They need to be prescribed in the bill with the agreement of the institution. That approach has been adopted in recognition of the private status of these institutions each organisation will need to make a decision based on its own circumstances.
The bill does not currently cover State-owned corporations. Unlike the public sector corporations covered by the bill, State-owned corporations have unique structural arrangements and the legislation establishing State-owned corporations do not represent the Crown. They are intended to operate as commercial entities, and they largely operate at arm's length from government. One effect of transferring the employees of State-owned corporations to Crown employment is that it will also transfer various employment related liabilities to the Crown—possibly having an impact on the budget. Therefore, the implications of transferring State-owned corporation employees to Crown employment will need to be carefully considered. The Government considers that there may be other, and possibly more suitable, arrangements that recognise the unique structural arrangements of State-owned corporations.
The Government is committed to exploring all reasonable means to protect the employees of State-owned corporations from exposure to WorkChoices. I expect to be in a position to make an announcement with regard to that shortly. I should point out that employees of State-owned corporations can avail themselves of the common law agreement proposals contained in the Industrial Relations Bill in order to preserve many of their entitlements and access to the New South Wales Industrial Relations Commission. The bill does not cover local government employees because they are not part of the State Government public sector. There is established case law that makes it clear that they are not Crown employees. If local government were to be included in this bill the State Government would become the employer. As a consequence it would also become liable for various matters including occupational health and safety, workers compensation and superannuation. It would also become legally liable for actions of the staff of local councils.
As the Minister said in the House last week he has had discussions with local government unions including the United Services Union and Unions New South Wales in a genuine attempt to protect local government employees, councils and shires and the public who rely upon their services from the impacts of WorkChoices. Discussions are continuing as late as today, involving also the Minister for Local Government, in an attempt to find ways, without taking any liability for the State Government or overly complicating the employment arrangements for local government and the employees themselves, to underline some protection for them from the Howard Government's WorkChoices legislation. I would also remind the House of the access to the common law agreement proposal that was referred to in debate today. I commend the bills to the House.
Motion agreed to.
Bills read a second time.
Consideration in Committee ordered to stand as an order of the day.
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