Fair Work Amendment Bill 2014

It gives me great pleasure to stand up here tonight to talk to the Fair Work Amendment Bill 2014 and support this very important piece of government legislation, particularly as this bill, like many of the actions that this government is undertaking, delivers on key aspects of our election policy, in particular in relation to industrial relations reform. This particular bill does not go any further than what we took to the people at the last federal election, back in 2013. Indeed, on union workplace access, individual flexibility arrangements and the removal of the ability to strike first and talk later, we are actually delivering on specific policy promises made by the Labor Party prior to the 2007 election but which Labor deliberately broke. So we are delivering on Labor's policies before 2007 and our policies before 2013, which is a fun fact for people at home.

Through our Fair Work Amendment Bill 2014 we are giving effect to a number of commitments in our policy and further restoring balance to the system. We will do this by improving the process for the negotiation of greenfields agreements to ensure that unions can no longer frustrate bargaining for these agreements through unsustainable claims and delays which can threaten investment and delay the commencement of major new projects that are crucial to our prosperity. We are going to restore union workplace access rules reflecting those in place prior to Labor's unbalanced amendments in dealing with excessive right of entry visits by union officials. We will improve workplace productivity and flexibility by enhancing the scope for employees to make individual flexibility arrangements that meet their genuine needs as determined by those employees. We are closing the strike first, talk later loophole in the good faith bargaining rules which Labor refused to address and will also maintain the value of unclaimed wages recovered for workers by the Commonwealth. The bill also enacts a number of recommendations from the Fair Work Act review panel in its 2012 report, which was commissioned by the now Leader of the Opposition, Mr Shorten.

The Fair Work Amendment Bill 2014 will address the current imbalance in union workplace access rules. Our changes will fairly and sensibly balance the right of employees to be represented in the workplace if they wish to be with the right of employers to go about their business without unnecessary disruption. The government and the coalition see right of entry as a specific statutory privilege to which conditions ought to apply. Regrettably, some union bosses do not see it this way.

In 2007 the Labor Party promised on multiple occasions that there would be no changes to the union right of entry laws. Indeed, in a press conference on 28 August 2007, then Deputy Leader of the Opposition Julia Gillard said:

We will make sure that current right of entry provisions stay. We understand that entering on the premises of an employer needs to happen in an orderly way. We will keep the right of entry provisions.

Like many of Ms Gillard's promises, this promise was not kept, and unions were given much easier access to workplaces under Fair Work Act provisions which were then exploited by union bosses. This has meant many businesses across Australia face excessive workplace visits from unions even when their employees are not union members. And we should remember that only 13 per cent of the private sector workforce are union members. Eighty-seven per cent of the private sector workforce in Australia are not members of any union and actually have no desire to be a member of any union, if you look at the rate of union membership and how it has decreased over the recent decades.

The problem has been exacerbated in some workplaces by unions competing, which is nice that they believe in the market sometimes, to represent employees at the workplace. The problem was actually highlighted by the former government's Fair Work review panel, which noted that the Pluto LNG project received over 200 right of entry visits in only three months. BHP's Worsley alumina plant faced 676 right of entry visits in a single year. Our changes will reduce the capacity of unions to deliberately harass and disrupt businesses in this way.

A recent case featuring the ever-charming CFMEU president Joe McDonald has underlined the urgent need for these reforms. In the recent case where Mr McDonald and the CFMEU were fined $193,600, Mr McDonald ignored specific requests to leave a site owned by Citic Pacific's Sino iron ore project in Western Australia. When asked to leave the site because he did not have a right of entry permit, Mr McDonald replied, 'I haven't had one for seven years and that has not'—and he used a really rude word—'stopped me'. Mr McDonald's attitude reflects the very regrettable, dark underbelly of the union movement that should have no place in modern and fair workplaces.

To be clear, these amendments will enact Labor's publicly stated promise prior to the 2007 election, a promise that was not honoured. Given that the Labor Party in opposition, with the strong support of the union movement, supported this 2007 policy platform, we expect that these amendments will not be contentious. Most union officials will find these changes are not impacting their sensible approach to their right of entry activities. Currently, right of entry for discussion purposes can occur when the relevant union is entitled to represent the industrial interests of the employees at the workplace. This means unions can enter and hold discussions even if they have no actual members at that workplace and no-one has sought their presence.

The bill will amend the provisions so that the ability for unions to enter a workplace is either tied to a union's recognised representative role at the workplace or employees at the workplace have requested the union's presence. A union will only be entitled to enter a workplace for discussion purposes if (1) they are covered by an enterprise agreement or (2) they have been invited by a member or employee they are entitled to represent. If the employee who would like the union to come to their workplace wishes to remain anonymous, a union will be able to apply to the Fair Work Commission for an invitation certificate.

The Fair Work Commission must issue a certificate if it is satisfied that a worker who performs work on the premises and whom the union is entitled to represent has invited the union to the workplace to hold discussions. The certificate will not identify the employee who has made the request. This will restore the balance in the right of entry regime, so that is it similar to prior to the commencement of the Fair Work Act, consistent with the bipartisan consensus at the time of the 2007 election in relation to this issue.

The bill will also provide an effective mechanism for the Fair Work Commission to deal with disputes about excessive right of entry visits for discussion purposes. The previous Labor government's amendments to the Fair Work Act in this area were drafted in a way that renders them largely ineffective and only able to be used in extreme circumstances, where there has been an 'unreasonable diversion of the occupier's critical resources'. These amendments will remove this restriction to ensure the commission has the power to properly deal with excessive right of entry visits—for example, by suspending, revoking or imposing conditions on an entry permit. Additionally, the amendments provide that the Fair Work Commission can take into account the combined impact of visits by all unions to the workplace, reflecting that in some circumstances an employer will be subject to visits by multiple unions.

The bill will also repeal the previous government's amendments made in 2013 that expanded union right of entry rights even further by allowing for uninvited lunch-room invasions and requiring employers to pay for the cost of union-boss joyrides to remote worksites. Those amendments gave unions the right to insist on addressing workers in their lunch room, even when the workers have not requested their presence and are not union members. This is unfair to the 87 per cent of private sector workers, who are not union members and for all workers who just want to eat their lunch in peace without being hassled by union officials. This bill will restore the sensible arrangements that were previously in place, whereby union officials must comply with a reasonable request by the employer to hold discussions in a particular room. Employers will continue to be prevented from nominating locations with the intention of intimidating, discouraging or hindering employees from participating in discussions.

The former Labor government also introduced obligations on employers at remote worksites to provide union officials with transport and accommodation to enable them to access those sites. We will repeal this costly and onerous piece of regulation and, instead, reinstate the previous approach where unions and employers can reach their own arrangements in those circumstances.

The bill will remove the effective union veto power over greenfields agreements, which have enabled the unions to frustrate the making of these agreements by seeking exorbitant wages and conditions or refusing to agree at all. As the former government's Fair Work review noted, in somewhat understated language, these practices 'potentially threaten future investment in major projects in Australia'. They have already delayed major resources projects worth billions of dollars This is bad for jobs and bad for the economy. This bill will extend good faith bargaining rules to the negotiation of greenfields agreements to improve standards of bargaining conduct. This will mean that employers and unions will be required to, for example, attend and participate in meetings with each other and consider and respond to proposals in a timely manner.

To ensure that greenfields agreements can be made in a timely manner, the bill will establish a new, optional three-month negotiation time frame. The three-month time frame will apply where appropriate notice is provided by an employer to the relevant union or unions. If agreement cannot be reached in this time frame, the employer will be able to take its proposed agreement to the Fair Work Commission for approval. The agreement will have to satisfy the existing approval requirements under the Fair Work Act, including the better-off-overall test. The agreement will also have to satisfy a new requirement that it provides for pay and conditions that are consistent with the prevailing standards within the relevant industry for equivalent work. Consistent with the existing framework, the Fair Work Commission must also be satisfied that the union or unions to be covered by the agreement are able to represent the majority of future employees.

The amendments to the greenfields provisions will help to unlock new investment and prevent needless delays to new projects. This will provide confidence and certainty to investors and ensure that Australia and Australians benefit from the prosperity generated by these new projects. These amendments will also send a strong message to overseas investors that Australia is open for business and that projects can get underway quickly.

The bill will remove the 'strike first, talk later' loophole under the Fair Work Act, consistent with the promises of the Labor Party prior to the 2007 election and the recommendation of the Fair Work Review Panel. In his speech to the National Press Club in April 2007, the then Labor leader, Mr Kevin Rudd, said:

... industrial disputes are serious. They hurt workers, they hurt businesses, they can hurt families and communities, and they certainly hurt the economy … They—

employees—

will not be able to strike unless there has been genuine good faith bargaining.

This is not the case under the Fair Work Act, where employees are allowed to strike before bargaining has even commenced. The bill will amend the Fair Work Act to provide that protected industrial action can only be taken if bargaining for a proposed agreement has commenced. This amendment will mean that industrial action cannot be the first step in the bargaining process, restoring a balanced and harmonious approach to enterprise bargaining. The coalition will fix this loophole. In doing so, Labor's 2007 promise will finally be implemented.

The bill also introduces amendments to provide clarity and certainty for employees in the use of individual flexibility arrangements, or IFAs. IFAs are an important tool introduced by Labor. They are intended to enable workers and their employers to mutually agree on conditions that suit their needs while ensuring that employees are better off overall compared to their underpinning employment instrument. IFAs ought to be an important option to enable employees to, for instance, manage their childcare or other caring arrangements, to spend time with family or for other commitments. They are specific to the individual and not designed as a management tool for a business.

The amendments about IFAs in this bill are based on the Fair Work Review Panel recommendations. They also include further new safeguards to ensure that employees are better off. To be clear, the current IFA framework in the Fair Work Act will stay—with additional protections put in place. This means that an employer cannot force an employee to sign an IFA or make it a condition of employment; the employee must be better off overall than they would have been under the applicable modern award or enterprise agreement; and a worker must provide a statement to the employer saying that the IFA meets their genuine needs and that they are better off overall.

Under the current system, unions can restrict the scope of flexibility terms under enterprise agreements through the bargaining process to only cover a single matter, for instance the taking of leave. This means that workers may be denied the chance to have IFAs on other matters, even if they and their employer want to agree to more suitable arrangements. The amendments will deliver on promises made by Labor in 2007 and provide that IFAs may be made in relation to all of the matters currently prescribed in the model flexibility term to the extent that those matters are covered in the agreement. This will ensure that workers have access to fair flexibility without a veto by union bosses.

The bill also implements the Fair Work Review Panel recommendation that employers should, in limited circumstances, have a legal defence if they enter into an IFA in good faith, believing it meets all the requirements of the legislation, when it turns out later that it does not. The defence will only apply where the employer believed on reasonable grounds that all statutory requirements had been met in relation to the IFA. The bill will also strengthen protections for employees by requiring a statement setting out that the arrangement meets their genuine needs and results in them being better off overall. This will make the position absolutely clear: employees will only make IFAs that provide for non-monetary benefits when the employees themselves make a clear statement in writing why they are better off overall.

Two further amendments recommended by the Fair Work Review Panel will be made to provide clarity and certainty to both employers and employees. First, the unilateral termination period for IFAs made under enterprise agreements will be extended from 28 days to 13 weeks, consistent with the position for awards. In addition, the 13-week unilateral termination period for both modern awards and enterprise agreements will be placed in the legislation. The second amendment will confirm the existing position that the better-off-overall test for IFAs can be satisfied by exchanging monetary benefits for benefits that are not monetary. This is already the case under the legislation introduced by the Labor Party that operated while the Leader of the Opposition was the workplace relations minister. This position has been confirmed by the independent Fair Work Ombudsman. The amendment, combined with the government's new requirement for a statement in writing from the employee, will provide greater protection and certainty for all parties. All other rules relating to an IFA will be retained, including that they cannot be made a condition of employment, must leave the employee better off overall and must be genuinely agreed to. Anyone who opposes these amendments needs to explain to Australian workers why they should not have the opportunity to be better off overall if the arrangement genuinely meets their own needs—as assessed by themselves.

This bill will also implement a number of other common-sense recommendations that were made by the now Leader of the Opposition's Fair Work Review Panel in 2012 but were not implemented by the previous government. The bill will clarify the interaction between leave and workers compensation by removing an exception that allows employees in a few jurisdictions to accrue or take leave while absent from work receiving workers compensation. This will remove the inconsistency and confusion that currently exist for employees and employers, and ensure that employees on workers compensation across the country are treated consistently.

In line with the fair work review panel's recommendation, the bill will clarify the circumstances where annual leave loading is payable when a person leaves their job. The change will restore the longstanding position that employees are only entitled to annual leave loading when their employment ends if it is expressly provided for in their award or workplace agreement. This will address the confusion that currently exists as a result of the legislation and numerous awards adopting different positions. It will still allow for annual leave loading to be paid, including after employment has ended, if it is in the employee's modern award or enterprise bargaining agreement.

In conclusion, I reiterate that this bill does deliver on key aspects of our election policy and does not go any further. Indeed, the bill actually delivers on key aspects of the promises that the Labor Party took to the election in 2007. I encourage all members, especially those opposite, to consider the consistency of their position in 2007 with the position that they are taking now.