Parliament Updates

Zali Steggall MP speaks on the Fair Work Amendment (Industrial Relations Bill)

23 February, 2021


So today we debate the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020. To start off, I should say to the people of Warringah that I've had briefings with all sides of the discussion, including the Business Council of Australia, the Australian Council of Trade Unions, the Council of Small Business Organisations Australia, the Labor Party and the coalition. So I don't take this debate lightly. We must be considerate of the downstream effects of these proposals and ensure that the benefits and costs are shared widely amongst all stakeholders. I've also sought feedback, of course, from the Warringah community. I have, however, felt overall that this debate has been vexed by partisan polarisation. Both sides have sought to scare voters with rhetoric, claiming either that small businesses will be slugged or that workers will take massive pay cuts. I didn't find the examples provided in support of claims to be compelling.

I believe we should be able to have a reasonable discussion about what a 21st-century industrial relations system looks like as we recover from this pandemic. Australia must not simply recover but also design an economy that is dynamic, is innovative and allows business to pivot and adapt and workers to flourish. That's why I urge that we go further in pursuit of those aims. We must look at every way that we can to unlock productivity, wage gains and efficiencies, whether that is tax reform, industrial relations or energy. Now is the time for boldness, not lethargy.

This bill has several schedules which address discrepancies in the classification of casual workers. It simplifies the enterprise bargaining process and combats wage theft. In this speech, I want to focus on the changes to the enterprise bargaining process and provisions addressing part-time and casual workers, as they are very much the changes that affect Warringah constituents. Australia's industrial relations system is needlessly complex and inflexible, to the detriment of employers, particularly small business, and that does ultimately impact workers as well. Warringah is an electorate with many small businesses—just over 20,000 small businesses—so this is an issue that is frequently raised with me.

In relation to enterprise bargaining agreements, this bill seeks to make modest changes, but there are some flaws. It is attempting to reboot the enterprise bargaining system to make it more accessible and streamlined. It's vital that we do this, as the number of enterprise bargaining agreements in the last decade has fallen significantly. The number of people employed under an EBA fell from 2.6 million in 2014 to 1.8 million in 2017. So we need the system to work. EBAs are important, as they drive productivity, better wage outcomes and fairness. But clearly those numbers and the reduction in EBAs show the system isn't working as it should.

The current system leaves business with little option but to exit and rely on awards, give up on making new agreements or settle for a suboptimal EBA. That's because EBAs can be shot down over technicalities or the negotiations hijacked by third parties. This bill seeks to address this. In some cases, the process is just so complicated and time-consuming that businesses simply give up. EBAs should be pushed through the process a lot faster than currently occurs. Even after the parties have agreed, some take more than 120 days to pass through the Fair Work Commission process. I agree that many provisions in the Fair Work Act relating to EBAs can be streamlined to make them less time-consuming, and I support the parts of the bill which seek to do this.

Although this is not covered in this bill, the government should consider provisions for the making of a small business EBA. The constant feedback I get from small to medium-sized businesses is that that is needed, as many have multiple employees and don't fit neatly under one award but need a number. That can make navigating the system an administrative nightmare for small business. The workload attached to the paperwork is simply a deterrent to putting on more staff and takes away from business proactivity. A small business EBA, or better provision for small businesses, could make business owners' and operators' lives easier through simplification, as well as boosting workers' wages.

In relation to part-time workers, this bill includes amendments that will vary 12 identified awards in distressed sectors, including retail, hospitality, fast food and related sectors. Many of those are incredibly relevant in Warringah. These changes will allow part-time employees to pick up extra shifts and days. Currently, part-time employees are passed over in certain circumstances in favour of casual employees when it comes to additional shifts. Appropriately, there are protections for a minimum 16-hour week. However, extra shifts will not result in overtime payments to part-time staff under these changes. But it should be clear, despite the scare campaigns that occur, that these additional hours will still qualify for penalty rates on weekends. I believe this flexibility will support businesses and part-time employees.

The government should consider the concerns of the business community about the paperwork required to agree to additional hours. We hear a lot in this place, especially from coalition ranks, about cutting red tape. I would argue that there is red tape that could be cut here, and there is actually some being created. The bill as written requires a written agreement every time more hours are sought by or offered to a part-time employee. There should be a standing consent clause whereby an agreement is not needed every time but instead an employee gives their written consent once, which will include details of ongoing availability.

This bill will introduce a definition of 'casual employee'. This definition is intended to provide certainty to both employers and employees at the beginning of employment. I would argue that this is helpful, given the legal uncertainty facing small businesses, following the WorkPac Pty Ltd v Rossato litigation, which established that an objectively justified expectation of continual work means workers are eligible for the benefits of a full-time worker, regardless of the casual loading already paid. This leaves wide open the potential of double dipping and workers receiving both full-time entitlements and casual loading. This can't be in the best interests of small business. I recognise that there are instances of large companies doing the wrong thing in underpaying casual loading. Sadly, they do hit the front pages. But I do believe that by and large most business owners, especially in small businesses, set out to do the right thing. There is a relationship between small businesses and their workers. There is a closeness in their intention to prosper and thrive together. These are business owners who have a small number of employees, and they are close to them. They are looking for solutions on how to work together.

I do believe it's the complexity of the system which is leading to mistakes. Many are paying the loading, but now they have a situation which is out of their control and they will have to pay damages above the scope of what is reasonable. I do, however, acknowledge that several submissions to the Senate Education and Employment Legislation Committee, including the Law Council of Australia, have made the point that the definition should be rebalanced. The definition of 'casual employee' proposed in the bill may be open to manipulation, since it is affected by how the offer of employment is phrased.

Regarding the casual-to-permanent conversion mechanism, it will universally enact the conversion rights that exist under various awards and agreements. I support this measure. Employees should be offered the opportunity to become permanent. However, the government should tighten up the language in the provisions which allow employers to object to the granting of a full-time position to casuals. The clause allowing for reasonable grounds to oppose conversion leaves too much discretion to business owners and could allow any excuse for not granting full-time employment.

I am concerned about the lack of right to arbitration, which could disadvantage workers and employers that are seeking a resolution. The rights should be guaranteed where mediation or conciliation through the Fair Work Commission has failed. Finally, the government should remove the requirement to notify employees who do not qualify for conversion. It seems an unnecessary burden for small businesses to have to notify staff of something that does not even apply to them.

In conclusion, although the debate has been incredibly polarised, on balance I'm not swayed that the issues with this bill outweigh the benefits. The bill will introduce modest measures to improve the functioning of the industrial relations system. I urge the government to consider sensible amendments in the Senate, proposed by the Law Council of Australia and the Business Council of Australia, that will improve the bill. These changes will benefit many small businesses in Warringah in particular, from my point of view, making the system streamlined and more efficient. However, I do ask that the government also look at further changes. We must design a 21st-century economy. It is time, and I would urge all members in this place to come together to try and do that.