HANSARD EXTRACT
| Workplace Relations Amendment
(Small Business Employment Protection) Bill 2004: Second
Reading |
| 23 June 2005 |
Mr HAYES
(Werriwa)
(11.41
p.m.)—I
strongly oppose the
Workplace Relations Amendment (Small Business
Employment Protection) Bill 2004. That does not mean I am
supporting the views of the union movement over the views of small
business owners or operators and it does not mean I am blindly
supporting employees over employers. I am a supporter of both small
business and employees. Contrary to the view of members opposite,
there is no conflict in that position. The provisions of this bill
go to the integrity of this government. Once again, this government
has clearly demonstrated its disdain not only for the rights of
Australian workers but also for the decisions made by the
independent umpire, the Australian Industrial Relations Commission.
Because the government did not like a decision made by the body
charged with making such decisions, it has decided to overturn that
decision by legislating against it. This approach is a matter of
serious concern not just for members on this side of the House but
for the community at large. The essence of this bill is to negate
the redundancy test case decision of March and June 2004. According
to the Minister for Employment and Workplace Relations, this bill is
necessary to rectify a flawed decision by the AIRC.
I take this opportunity to take a closer look at the so-called
flawed decision. In 1984 the Australian Industrial Relations
Commission—then known as the Australian Conciliation and Arbitration
Commission—inserted redundancy pay provisions into federal awards.
The decision was known at the time as the termination, change and
redundancy test case. The decision determined that longer serving
employees would be entitled to longer periods of notice of
termination and it established a basic scale for severance pay,
capped at eight weeks pay. In the commission’s first decision,
businesses with fewer than 15 employees were excluded from the
notification and consultation provisions but not from the
requirement to make redundancy payments. As I said earlier, there
were two decisions relating to redundancy payments. The commission’s
second decision—and this is the part that should not be
forgotten—overturned an important provision of the first decision,
resulting in businesses with fewer than 15 employees being exempted
from redundancy payments.
In 2002 the ACTU sought to have the standard of redundancy payments
of eight weeks reviewed. The ACTU was of the view that the then
current scale of payment did not adequately compensate redundant
employees. As a consequence, a broad case which was known as the
redundancy test case was run. In similar circumstances to those in
1984 the AIRC made two decisions on this matter, the first decisions
the AIRC had granted to extensions for redundancy payments in almost
20 years. For medium sized and large businesses the payment was
capped at 16 weeks for between nine and 10 years service. That
figure reduced to 12 weeks after 10 years, after taking into account
the provisions of long service leave. The decision handed down in
March 2004 also extended redundancy payments to small business but
capped them at a maximum of eight weeks pay. Obviously such a
provision was poorly received by business groups, and it was
certainly poorly received by the
Howard government, as it gave some measure of redundancy entitlement
to employees of small business who hitherto had been entitled to
zero.
In similar circumstances to the 1984 decision the AIRC reviewed its
decision and amended its position in June 2004, and it issued a
supplementary decision. In that supplementary decision the
commission accepted the views presented by employer groups and the
Commonwealth—yes, this government was represented. As a consequence,
the operative date for small business redundancy provisions would
only apply from
8 June 2004,
irrespective of the actual commencement date of the employee. This
was in recognition of the fact that many small businesses may not
have made the necessary provisions to fund redundancy payments as
there would have been a need to make ongoing provisions for
redundancy. In other words, as a consequence of this decision, the
commission eliminated the prospect of retrospective application for
redundancy entitlements or the accrual of redundancy entitlements to
employees of small business.
The parallel between the 1984 and 2004 decisions is interesting
because, just as it had in its earlier consideration on this issue,
the AIRC reconsidered its initial decision in light of further
submissions from various stakeholders, including the government.
After considering the decisions, amendments were made to accommodate
some of those more serious concerns brought forward by employers.
Reserving my personal comment on the content of that decision, I
would strongly argue that the fact that it was reviewed is clear
proof that the independent umpire in this system did its job well.
It applied its jurisdiction appropriately. It took the merits of the
arguments of the employers and the unions, and indeed the
Commonwealth government, weighed them up and made a decision
accordingly.
This is probably the most interesting aspect of the operation of the
AIRC. In fact, I would go further and say that, in my experience,
this sort of decision making and this approach to decision making
has been the hallmark of the Australian Industrial Relations
Commission. Members of the commission, both judicial and nonjudicial,
all take an oath of office to act without fear or favour and all
members of the commission, whether deputy presidents or
commissioners, take that oath very seriously. However, it would seem
to the government that things are not quite that way. I find it
interesting that this bill is before us at all given the provisions
of the
June 2004 AIRC decision. It would seem that the government is not
willing to acknowledge that the June decision even exists. The June
2004 decision supported the submissions of the Commonwealth
government. I find it interesting that, given the primary objections
that the government had to the March decision—namely, that the
financial aspects of the impact of redundancy payments on small
business were reassessed in accordance with the June decision—even
in its re-election documents of last year the government did not
acknowledge the existence of the June decision or the role it had in
making the submissions that eventuated in that decision. In its
workplace relations policy document the coalition stated:
A
re-elected Coalition will continue to pursue changes to take the
unfair dismissal laws burden off the back of small business and
protect small business from redundancy payments.
In this case the government seems to have ignored the fact that the
latter decision had already been made by the independent umpire.
This decision agreed with the Commonwealth and the employers and it
clearly took into account the financial position of small
businesses. The more suspicious amongst us might suggest that the
government did not want to admit that the AIRC had overturned its
earlier decision, because it might have ruined the planned scare
campaign to be waged in the small business community based on
statements such as those the minister made in his second reading
speech that, in the government’s view, the AIRC decision seriously
underestimated the impact that redundancy pay would have on small
businesses. For instance, a retail small business with seven
employees, each with four years continuous employment, would now
face a contingent liability for redundancy pay of nearly $30,000. I
am not a suspicious person, but I am deeply concerned both about
what this bill means for small business employees and about how the
government intends to reshape the industrial relations system as we
know it.
Often we hear how important the small business sector is to our
community and certainly our economy. That is quite true. We hear
that it is the lifeblood of the Australian economy—it is a
significant driver of growth, a significant exporter and, of course,
a significant and growing employer. As at June 2004, there were
nearly 1.3 million non-agricultural small businesses throughout
Australia. Of those businesses, more than 400,000 employed between
one and four employees and nearly 140,000 employed between five and
19 employees. With more than half a million small businesses
employing at least one person, a considerable number of people will
be impacted by these measures.
Small business is a growing sector—it is growing in most parts of
Australia and it is certainly growing in my electorate of Werriwa.
Under the provisions of this bill, employees of this significant
growing sector will not have access to redundancy payments—not even
small ones—unless they can negotiate them themselves, which I
suggest is a very remote possibility given the fact that one’s
bargaining position will be infinitely weakened once one is
redundant and out of a job. Whilst this might not sound like much
for those employed by small business without access to minimal
redundancy, I think you will find it is significant. It is certainly
significant for those that this government purports to be the
champion of—the workers and employees of small business.
People regularly turn on their televisions at night and hear how
senior executives of major corporations—corporations that they use
daily, like banks, insurance companies and telephone companies—are
receiving massive redundancy payouts. I refer to the $50 million
payout made to the former chief executive of BHP Billiton, the $2.5
million payout made to the former chief executive of Goodman Fielder
and the $1.4 million termination cheque handed to the former chief
executive of AMP. Yet, according to the
Howard government, employees of a small business, regardless of
circumstance, should not be entitled to one cent. So much for the
government being the friend of the battler. Given a chance, this
government is more than willing to cut them adrift. That is why the
Labor amendment must be supported.
If the members opposite got out of their electorates and spoke to
employees and not just the bosses, they would actually hear that
people out there are concerned. Their concern stems from the greater
uncertainty that they face in the modern workplace, and the
provisions of this bill do nothing to help them—not one bit. Under
Labor’s amendment at least one of their concerns would be
alleviated. Under Labor’s amendment there would at least be an
opportunity to receive redundancy payouts should the situation arise
and should the small business in question have the financial
capacity to make the payment. This is an interesting point, because
the evidence that was presented to the Australian Industrial
Relations Commission before its March 2004 decision did not support
the view that small businesses, taken as a whole, were unable to
afford redundancy payments. The commission noted:
For those businesses which are unable to meet their redundancy pay
obligations the incapacity to pay provision, as amended by this
decision, provides an avenue for relief.
So it is not the case that small businesses, taken as a whole, are
simply unable to make contributions to redundancy payments. The
commission accepted that, while in most circumstances small
businesses could afford to pay redundancies, in some circumstances
they might not and provision was specifically made to cover those
circumstances. This situation is reflected in Labor’s amendments. If
these amendments are adopted, the more than one million people
employed by small business will at least be able to rest a little
easier at night.
Given the radical agenda announced by the Prime Minister in late
May, it is likely that at some point in the not too distant future
the government will attempt to redefine the term ‘small business’,
as it has done with respect to unfair dismissals, to provide that
‘small business’ will cover any organisation that employs 100
persons or fewer. Like most things to do with this government, it
seems that the definition of small business is very flexible—an
approach that seems to be more about bending to the government’s
will than any practical concept. However, of greater concern than
overcoming the two-tiered system that this government seems to be
committed to creating is the fact that the government is more than
willing to legislate to overturn the decisions of the independent
umpire. As I noted earlier, in his second reading speech to the bill
the minister said that this legislation is necessary because:
... it is the only option available to rectify a flawed decision of
the AIRC.
Since 1904
Australia has had a federal tribunal with arbitral powers that could
make decisions to establish awards specifying wages and conditions
under the power to prevent and settle industrial disputes. Of
course, over the last century the commission has gone through many
changes in both its structure and its powers, but it has always
maintained its central role as the independent umpire. The inclusion
of an independent umpire has been an important and central element
of our system of industrial relations. It is one that is critical to
the transparency of our industrial relations system—an approach that
recognises fairness and decency in protecting the rights of
employees.
However, under this government it seems that the views of the umpire
are to be listened to but only complied with as it suits. The
decisions of the Industrial Relations Commission are to be
considered but, if they are not liked, they can be legislated
against. Under this government the commission can just be neutered,
as the Prime Minister recently announced. So much for the concept of
judicial independence.
I am sure that it will be claimed that the provisions of this bill
were clearly presented by the coalition in its industrial relations
policy documents, but one wonders just how many people at the time
would have taken note of what this government was intending in
relation to employees of small business. On 26 May this year, the
Prime Minister announced the new world order for industrial
relations. The role of the independent umpire, the Australian
Industrial Relations Commission, is going to be significantly
reduced and the Australian Fair Pay Commission will be introduced.
Having seen the way the government has treated the AIRC, I wonder if
it is worth asking members of the new Fair Pay Commission to act
without fear or favour. (Time expired)
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