Ms McKENZIE (Flinders) (18:38): Payday for the Australian union movement has finally come, and what a golden pot of power this bill, the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023, bestows on them. This bill has been called radical, extreme, interventionist, heavy-handed, costly, complex and economically damaging, and rightly so. The recently departed CEO of the Business Council of Australia, Jennifer Westacott, said it:
… represents one of the most radical overhauls of Australia’s system in decades and will impact every worker, contractor and business at a time of rising economic uncertainty and a cost of living crisis
The head of the Minerals Council of Australia, Tania Constable, described its context thus:
The nation’s ongoing prosperity is under assault.
So why now would it be wise to place even greater restraints on the Australian economy? Why would it be prudent, at this very time, to increase the burden on Australia’s productive workplaces and threaten investment and job creation?
The Australian Chamber of Commerce and Industry calls it as they see it, as the greatest invasion of the place and progress of business by the union movement. Their CEO, Andrew McKellar, said:
The government is seeking to deputise union delegates, establishing them in proxy law enforcement roles
But more important to me than the views of ACCI, BCA and the Minerals Council are the views of my constituents in Flinders. Two weeks ago today, Senator Michaelia Cash, our shadow minister for industrial relations, came down to my electorate and met with around 30 local Flinders businesses, ranging from the local Bakers Delight franchise to the global-leading industrial enterprises located on the Mornington Peninsula. Over a couple of hours we talked through the proposed reforms contained in this bill, many of which those who gathered had heard absolutely nothing about. Others were already in the trenches, trying to navigate the vast damage that this bill will do to their business model and employment practices—mostly to meet their employees’ needs and preferences but also to meet customers’ demands, to stay globally competitive and to sustain Australia’s manufacturing base.
Others had no idea of what was coming their way, so busy are they meeting the day-to-day demands of running their businesses. The Mornington Peninsula economy survives on seasonal, casual and contractor employment. The offer of casual rates is often the only way to get young people to work through the peak summer season. The use of contractors is how we sustain our services sector in aged care, retirement living, health, education and child care. Each and every day, hundreds of workers are being bussed from the northern suburbs to meet the demands of our local businesses.
If you ask any employer already, they will tell you that wages are already unaffordable, worker accommodation is impossible to find and there is next to no public transport so both travel and travel time must be funded by the boss. Business loan interest payments are soaring and their home mortgage, against which the business is often guaranteed, is also soaring. They are drowning in red tape and, now, this. At a tourism round table I held last week, I heard that many are just trying to get through the summer season to see if they can make it through to the end of the financial year. But at our IR round table two weeks ago, as we sat in the modest, but magnificent, Westernport Yacht Club looking out to a grey ocean, I watched as my constituents’ faces turned similarly pale. Quietly, afterwards, someone said to me, as many others have said in other contexts, ‘Has anyone in this Albanese government ever run a business?’
The head of the Master Builders Association came to see me yesterday; I always welcome them with open arms of course because Flinders, in any given year, is more likely than not to hold the enviable crown as the tradie capital of the nation. That means the highest number of people employed in the construction industry. We were pipped by Casey last year, and I’m sure the member for Casey will come in to remind me of that, but I’m sure we will resume that crown at the next count. Either way, some 15 per cent of total employment in my electorate relates to the construction industry, with some 10,000 people engaged and almost 2½ thousand small businesses in the building and construction industry across Flinders. You can see them every morning, lined up at the Tuck Shop in the Rosebud Industrial Estate or the Koonya General Store in Sorrento, the Lil Tuckshop in Dromana—an endless procession of youths grabbing the nation’s best egg-and-bacon rolls at dawn. The lucky ones have already had a surf in the morning before a long day on the tools.
The Master Builders Association represents so much of the trading community in my electorate and they have been clear about the impact of this bill on them. Denita Wawn, the CEO, said:
The majority of the amendments will negatively impact the over 440,000 businesses that operate in building and construction and the 1.3 million people they employ.
In Wawn’s words, it:
… represents a fundamental upheaval of many tried and tested components of Australian workplace laws … and is simply bad law and policy.
It is complex, complicated, costly and unnecessary. It will hurt small business and undermines people’s rights to be their own boss.
It will be a lawyers picnic and despite comments suggesting it won’t impact building and construction, the Bill as introduced very clearly opens the door by taking a general approach of ‘you are in, unless you can argue your way out.’
When I started my professional career I was an IR lawyer. In addition to private practice with Corrs as an articled clerk and then with Freehills as a senior associate, I spent a number of months seconded to the former Department of Workplace Relations and Small Business in the city, working on the second iteration of Howard-era workplace reform under the late, great Peter Reith as our minister. Today, just the explanatory memorandum of this bill is larger than the entire Workplace Relations Act 1996, which I worked on at the time.
This bill, if implemented, will cripple Australian businesses, small to large alike—smashed by heavy-handed red tape, backbreaking complexity and immeasurable cost. The bill offers no improvements in terms of productivity, and adds to the cost-of-living pressures already felt by Australian businesses, families and workers. It will unquestionably add billions to the wage bills of small to large businesses alike, while offering little in terms of uplift and flexibility for workers, who will find themselves stuffed into one-size-fits-all suiting with union overlords looking over their shoulder.
Modest estimates to the cost to business by the Department of Employment and Workplace Relations suggest it will add $510 million a year if just 66,000 labour hire workers fall under the new Fair Work Commission orders. The additional cost for digital platform workers will be $4 billion over a decade. Conservative maths says this bill will cost employers more than $9 billion over a decade and lead to scores of job losses.
This bill is yet another, but perhaps the most egregious, aspect of this government’s war on all Australian business. Even the government’s favourite, Qantas, hates this bill, recently saying to the Senate inquiry on it that it would ‘compromise the viability of services, particularly regional ones, undermine job security and create market distortions by way of an unlevel playing field in circumstances where competitors will not be captured by the proposed reforms’, according to Nathan Safe, who gave evidence to the Senate.
Let us look at some of the most concerning provisions of this bill in closer detail. Let me start with union entry rights, because it’s clear from those provisions alone who exactly the Albanese government is putting at the centre of the Australian workplace. In providing advice to business, my former firm of Freehills described it thus:
The Bill forms part of a specific policy framework which seeks to reinvigorate participation in both trade unions … and the enterprise bargaining regime …
Their colleagues at Ashurst were blunter, stating the bill:
builds on the already significant changes made in December 2022 to further entrench the role of unions in Australian workplaces …
Union organisers will get reasonable access to the workplace and paid union training. Going forward, all awards and agreements must enshrine these rights. Yet, ‘reasonable access’ is nowhere clearly defined, no doubt leading to endless disputation between workers and unions over exactly what is allowed. Moreover, unions are given extraordinary powers to enter workplaces without any notice whatsoever if it has a reasonable suspicion that a union member is being underpaid and to inspect employment records, including those of non-union members.
The provisions once known as ‘same job, same pay’ will act as a handbrake to productivity and flexibility in the workplace, and demonstrate just how out of touch Labor is. The AI Group has indicated that the ambit of this new provision potentially interferes with a raft of other commercial arrangements between businesses that haven’t traditionally been considered labour hire. Again, my old firm, Freehills, warned that the new provisions are not necessarily confined to traditional labour hire. For example, they could ‘potentially extend to service contractors and internal group entities’ that supply labour within a corporate group. Furthermore, the scope of the regulated labour hire regime is also not limited to employers who are based in Australia and applies regardless whether or not the host employers are themselves currently subject to the Fair Work Act.
The exemption for three-month surge or seasonal workforces falls far short of the more realistic and flexible 12 months sought by business groups and certainly far short of any seasonal work done in my electorate. It also requires the employer to convince the Fair Work Commission that exceptional circumstances exist to justify the order.
I now turn to Labor’s war on casual employment. The provisions of this bill are designed to complicate and disincentivise casual employment, even though we know that the vast majority of casuals choose casual employment to suit their life circumstances, especially for the 25 per cent uplift on their hourly rates. The bill sets out a conga line of criteria that is three pages long, with 15 factors, to work out whether a relationship is truly casual or not. It is largely characterised by an absence of a firm advanced commitment to continuing and indefinite work. Even then, when the test for casual is met, in a much more complicated way than is currently the case, the casual is a casual until a casual is not a casual when a specified event occurs. What does the lucky dip selection of special events look like? ‘By election of the employee’: that’s straightforward enough and available now. Then there’s ‘converted by order of the Fair Work Commission’ or ‘converted by an industrial agreement’ or, better still, especially for the union movement, both the employee and the employer throw their hands up in frustration and convert the employee to ongoing for lack of a better alternative.
My old former colleagues Chris Gardner and Henry Skene recently wrote in the AFR:
This bill proposes extensive changes to all casual employment from commencement. Changes unnecessary to address the “permanent casual” loophole the minister aims to close.
… … …
Unless what the government really wants is to stamp out casual employment more widely. And this is an old-school bait and switch: using the example of the “casual” truck driver with a 12-month roster … to substantially restrict something the government and unions dislike …
These measures, however well-intentioned, risk having precisely the opposite effect. Driving uncertainty and insecurity for those people who actually want, and feel well-served by, casual employment.
Finally, the bill’s provisions will stifle the ever-growing and diversifying gig economy. With the changes this bill makes to gig economy work, you can say goodbye to an affordable Friday night. Uber Eats, Deliveroo, Menulog, DoorDash, Uber, Shebah and Ola will all be more expensive. Today, young people, students, part-time workers and, indeed, retirees in my electorate are making some extra money working the hours they want, when they want, through app enabled work. They’re on multiple apps simultaneously. Labor hate them. A year ago, in August 2022, the Minister for Employment and Workplace Relations told the job summit:
Gig work drives down wages and has been spreading like a cancer through the economy …
Well, gig economy, here comes the chemotherapy for the cancer you supposedly caused.
Under the bill, the Fair Work Commission will be given new jurisdiction to set minimum standards via minimum standard orders and guidelines for those working on digital labour platforms with low bargaining power. A new digital labour platform deactivation code will be developed. I know it sounds like ‘Ministry of Love’ speak, but it will dictate the circumstances in which a gig worker can be exited from a digital platform, sort of like unfair dismissal from a workplace into which the gig worker never actually walks. The department has a document called Minimum standards and increased access to dispute resolution for independent contractors Annexure A—supplementary analysis to impact analysis equivalent process. I kid you not. That is actually a thing. It says:
If the Fair Work Commission determines that a ‘deactivation’ is unfair, it will be able to order reinstatement to a digital labour platform and where appropriate, make an order to restore lost pay.
To say there is massive uncertainty about the provisions and their impact is an even greater understatement. In a world in which technology and specifically generative AI will change every iota of every activity with which this place concerns itself, including nowhere more so than the world of work, this war on the future is just madness. The legislation is confounding, confusing, cumbersome and chaotic. How on earth are normal business operators like those who work in my electorate, run off their feet as it is trying to make ends meet, to understand what they are meant to do next? My old friends at Freehills were blunt: ‘Make friends with a good IR lawyer; you will need them.’ This is nothing but a Christmas stocking stuffed to the brim for the Australian union movement and a Christmas nightmare for all Australian businesses.