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Doorstop – Parliament House Canberra



Subjects: Casual employment and IR omnibus Bill

ATTORNEY-GENERAL: I wanted to speak a little bit about the casual component of the Government's workplace reform bill, our omnibus Bill on industrial relations. So we've announced some of the central features of the way in which we're going to fix this problem that has developed around what is or is not a casual employee and how they should be paid. At the centre of what we're trying to achieve here is certainty, choice, inside a reasonable framework. So in May of this year. As we were dealing with the pandemic, a Federal Court decision was handed down, which means that for six years going backwards, there is massive uncertainty as to whether or not people were actually employed as casuals, which most of them would have thought, and their employers would have thought at the time, and whether they're employed in some other way. And that uncertainty now exists going forward. And after 150 hours of consultation, it's clear that that uncertainty is a major barrier to business confidence to employ people into casual positions which are very important part of the overall employment landscape in Australia. In fact of the 800,000 jobs to be first lost, 500,000 of those were casual employees and we want to bring those employees back into the workplace as quickly as possible and give them a significantly enhanced and stronger ability after six months' worth of regular casual work to convert, if they wish, to permanent part time or permanent full time employment.

So listening to the debate, and there'll be much of it as there was this morning - and I've heard much of it - and there'll be debate that goes on as the bill is introduced this week and no doubt goes into a committee. But people who are paid as casuals should always receive their loading, 25 per cent loading, which compensates them for other things, such as sick leave or annual leave, long service leave. If people aren't being paid that loading, that's a compliance issue, and this bill will also deal in a very substantive way with compliance, but you should always receive that 25 per cent loading. The fairness principle in this bill around double payments, is that, if you've been paid that 25 per cent loading to compensate you for other things, you shouldn't be paid for those other things as well. And if you were mischaracterized in your employment, and you make a claim and you're successful, that will be acknowledged. But that if you are paid that 25 per cent, that should be used to offset your other claims, which we just think is a basic issue of fairness. The business community estimates amongst others that if you don't have that common sense fair offset provision that the financial impost on the business community going back six years could be upwards of $39 billion, which could cripple a whole range of businesses at precisely the time that those businesses are struggling and need government's assistance to grow out of the COVID 19 pandemic. So this is about fairness, it's about creating a clear distinction so that an employer knows, an employee knows, are they being employed as a casual and thereby receiving their 25 per cent loading, or are they being employed in some other way, as a permanent part time or permanent full time employee.

With respect to choice, what we've done in this bill is create the strongest ever regime for employees to transfer out of casual employment and convert into full time, whether that's, sorry permanent employment full time or part time. This is the strongest ever ability to convert from casual to permanent employment, and there is fair arbitration around any disputes that might exist, with respect to that. At first instance, we want those to be dealt with cooperatively in the workplace. Secondarily they can go to the Fair Work Commission for conciliation or by consent arbitration in the Fair Work Commission. Very importantly, it will be businesses who will be required to tell people that they have this offer to move from casual to permanent employee. That won't be something that the employee has to do, that is an impost put on business. And in fact, inside the 12 month period where the last six months need to be worked regularly, we will count back, count back before the bill has actually been assented to. So, actually passed through Parliament. So we want to create certainty, we want to create a very strong choice for people. Some people may avail themselves of that choice and give up the loading and become permanent employees and some may choose not to do that. So the third thing is the system has to be fair, and it doesn't meet any fairness test to receive a loading in compensation for certain entitlements but also receive those entitlements, and that could cripple business. So we want to create certainty. We want to make sure there's a very, very strong right to convert - choice. And we want to create a fair system where everyone knows how people are being employed, what their rights to convert are and how they should be paid.

QUESTION: With that double dipping issue. So what you're saying in the case with Rossato is that it is a compliance issue that will be separately addressed individually. And secondly, could I ask, [indistinct], will you be extending beyond the end of March the provisions [inaudible]…

ATTORNEY-GENERAL: The bill will be introduced this week and we'll deal with that issue about some of those flexibilities, I won't go into those details before we actually announce those details, but it will deal with that issue.

QUESTION: When you say deal with…

ATTORNEY-GENERAL: Well, there's been a range of extra flexibilities that have saved hundreds of thousands of businesses. Now, we have to find a way to try and sensibly transition businesses out of the COVID JobKeeper flexibilities back into something that approaches business as usual. But I think I can summarise without going into the details that we don't want to have that as a, as a cold flip from lots of flexibilities to none. We want to make sure that those flexibilities are tapered off, and that businesses could enjoy the benefit of them in a reasonable way and keep growing as we grow out of the COVID. And the Rossato decision, of course, made a decision with respect to a very small number of employees, and that decision stands. And if employees previously had been the subject of a court decision which determined their status as casual or full time, this bill does nothing to overturn that court decision. But where people have been paid 25 per cent as compensation for other things. What we say is that if they successfully claim for those other things, that 25 per cent monetary amount should be used to offset any claim that they might have. And that's not dissimilar from a motion that we've put into the Senate, and if you don't do that, the potential impact on business, of having to double pay people going back six years is $38 billion. So, what is the alternative to allow Australian business during the time that it most needs assistance to face a potential back liability of double payments because of confusion caused by a court decision of up to $38 billion? I mean that would be economically ruinous and destroy job growth so I don't think that anyone was rationally expecting that the Government wouldn't take moves to try and make clear how this system of offsetting would work,

QUESTION: Mr Porter just on double dipping, Labor claims that in that case, casuals, even with the loading were getting less than their full time counterparts because of the contractual arrangement. How can it be double dipping if they - even with the loading, they're still getting less than a full time counterpart?

ATTORNEY-GENERAL: Well, that's, that's what this bill deals with. If you are not receiving the loading. There's nothing to offset. So it's a mistaken description by the union movement this morning. What this bill does is says that if you are receiving the loading end you have a successful claim, then that loading has to be offset against that claim. If you're never receiving the loading then there's nothing to offset.

QUESTION: Mr. Porter. You said that there's conciliation by the Fair Work Commission. And if by consent arbitration, does that mean that the Fair Work Commission has no actual power to force a business to offer casual conversion if it doesn't want to and it believes it's got reasonable grounds not to?

ATTORNEY-GENERAL: Well, that's the situation that exists with the present casual conversion scheme. So many awards have casual conversion. What the casual conversion regime in this bill does is greatly strengthen the process of casual conversion. Instead of making it a process where an employee has to ask or request an employer, this becomes a process where the employer is required to make the offer to the employee, and then even after that offer is made the employee has a residual right every six months to make a request, and it extends that greatly enhanced ability to convert across all the sectors, including black coal where there's no present ability to have any form of conversion. But also the Bill, because it's not radical, it adopts the same dispute mechanism resolution mechanisms that presently exists, which is the businesses and their employees to at first instance work these things out themselves. Otherwise they can be conciliated. Otherwise there's arbitration by consent. The reality is that overwhelmingly these matters are resolved by conciliation. Now ultimately if people are dissatisfied with the outcomes of agreement conciliation or consent arbitration, they can take other action of their own volition.

QUESTION: What is the action?

ATTORNEY-GENERAL: Well that action ends up being in court, just as it has been in Rossato. We would always hope that that's a last resort, because what we're trying to do is adopt the best parts of the present system, which are cooperative, which involve conciliation, arbitration by agreement. And as I say, under the present conversion system, almost all disputes are resolved by conciliation. This makes no change that mechanism, but what we do do is greatly strengthen the employee's rights in the process of conversion.

QUESTION: Mr Porter when you say that employers are required to offer their employees permanent employment after they have been there for certain amount of time, how are you actually going to enforce that?

ATTORNEY-GENERAL: Well, there are very strict rules as you'll see in the Bill as to when that has to occur. And this is how it works. If someone's been employed with you for 12 months and over the last six months that employment has been regular, then you are required, the business, to offer that person, the opportunity to convert to full time employment, whether that's part time or full time, you are required to do that. That's not a right they have to request, that's an obligation on the business to make that offer. Now in certain, in certain circumstances, that will be not able to occur because it will be unreasonable and they are defined. And there may from time to time be disagreements about what is reasonable or unreasonable in those circumstances, and the dispute resolution mechanisms are exactly the same as they are at present, which is that first, you try and work out that dispute amongst yourselves. Secondly, it goes to conciliation, where overwhelmingly they our resolved. Thirdly, you can have consent arbitration, and if all else fails, everyone has the ability to take any matter that they wish to the courts for an ultimate judgment. But we're not doing anything different on the front of how you resolve disagreement about what's reasonable or unreasonable.

QUESTION: Would you be open to limiting the de-merger bill more specifically to the circumstances of the CFMEU. And is there anything else that you can do to satisfy the union movement that this isn't an attempt to divide and conquer more broadly.

ATTORNEY-GENERAL: Well, I mean the principle is this, is that if you represent members of a union in one sector like mining and you think that overall the organisation and behaviour of the union is not serving the best interest of your members, you should be able to leave. But I don't know why that principle would only be a fair and reasonable principle for the mining division of the CFMEU. I mean from time to time, things might go wrong in a union and a part of that union might think that they can do better by leaving the union and representing their members in a sectorial basis, why shouldn't they be able to do that? So we think that if the principle is right, then it should be applied across the spectrum of the union movement. I think it is fair to say that the likely candidate for de-merger would be the mining component of the CFMEU and I think that's fair to say. But it's not impossible that in the future the criteria in the Bill that I'll introduce to the parliament might be met. But the principle should just be one a freedom of association. But once you get into a mega union, if the mega union goes off the rails, should you be locked in forever? I mean that's just ridiculous. So why would you ever have an inability for good, decent hard working people who don't think that the union management executive is serving the interests of their members, why wouldn't you allow them the ability to leave? And I might say with respect to mining particularly, I had had obviously discussions with people in the mining industry on both sides, mining is critical to Australia's recovery, has been so critical to our, our ability to maintain employment during the COVID-19 pandemic. Imagine the idea of a sector specific mining union where the executive is full of decent hard working people trying to represent their members, who don't abuse workers at construction sites or engage in all this terrible unlawful behaviour we've seen in other parts of the union. Imagine the good that that union can do on a cooperative basis with employers in the mining industry in one of the key industries, for our job growth coming out of the COVID-19 pandemic. There's a good economic reason to do it but the principle is about freedom of choice and freedom of association. If you don't like the way the mega union is representing your members, you should be able to have a ballot, which is democratic and leave. And that shouldn't just be for the next three months, or for only one union, that principle should be applied across the board.

QUESTION: When will the government … [inaudible]… There are dozens of definitions of occupations, wages, pays, how many breaks you can have, how long the breaks are. Is government still committed to that and at what end?

ATTORNEY-GENERAL: We are. There are rational limits to how much simplification you can engage in. We are speaking today about the ability to leave a union and have de-mergers. We're speaking about how we're going to fix this terrible problem that has arisen with there being no definition of casual employment. The next thing no doubt we'll be discussing is how this Omnibus deals with some of the complications in awards. I can anticipate what we'll be talking about in the next couple of days there by saying we've tried to find the middle ground. So we want to simplify awards, we don't want people being paid less, but we do want to make sure that the classifications are simpler, that there are ways in which businesses have less regulatory costs because of the confusion in some of the awards. And we'll also be dealing with some of the issues that arise by virtue of the fact that small business particularly find the award system sometimes so confusing, that they fall into genuine errors with underpayment. So those announcements are to come, but they're certainly things that we've been trying to deal with.

QUESTION: Can you explain why the Foreign Relations Consequential Amendments Bill is required to pass in order for the substandard bill to work properly?

ATTORNEY-GENERAL: Well, quite often with consequential bills, the two things just don't work if they're passed separately. My recollection that is a very technical question, but my recollection is that there are other bills that require amendments by virtue of the head amendments and without those consequential amendments the two things don't work together but I'd probably have to take that one on notice because it's quite technical and go back and have a second look

QUESTION: [Inaudible] … Can we safely assume that if there is an extension it will allow businesses currently receiving that exemption?

ATTORNEY-GENERAL: Well, I'm not going to pre-announce it, but you know you have to resolve questions as to which businesses it applies to, which of the flexibilities might continue, what are the protections and tests and reasonableness tests that you would apply to whatever protections and whatever flexibilities you want to sustain and for what period. So we'll have to address all of those issues which this Bill does.

QUESTION: The ACTU seems to be squaring off for a potential fight over the, what we're seeing from the industrial relations omnibus bill. Are you prepared for a potential drawn out battle with the union going into next year and potentially, while the recovery continues to struggle.

ATTORNEY-GENERAL: Yeah, well I've learnt through 150 hours of this process that not every tear is a waterfall and not every disagreement's a war. And there will be disagreements, and we've had a very long period of discussion, consultation, give and take to develop this Bill. There are things in this Bill that the unions won't particularly love, there are things in this bill that business groups are not going to particularly love as well. And no doubt what we will go into now is a second stage of consultation. This Bill will be introduced into Parliament, it will go off to committee, we will still have our eyes and ears open, we'll still be listening. We're obviously trying to find a way for the bill to have a passage through Parliament because we think that it's critical for job growth. So we will still be listening, and I accept that there'll be disagreement on how something should be done. But what's most important is that there's still a clear agreement that you can't go on in Australia when you've got 2.6 million people who are employed as casuals, and that that percentage level of the Australian economy has been basically constant for decades, but you don't have a definition of what a casual employee is. And that creates massive confusion and stops people from hiring during the time that we most need job growth. So there's huge agreement that these are problems that need to be fixed. There is sometimes disagreement on how you structure the processes, and the finer points of the fixing, we'll still be talking and listening, I've listened all morning, but I did want to clear up some of those issues that were raised this morning.

QUESTION: If you, if an employee has to offer, sorry, an employer has to offer a full time contract or a part time contract, but there are some circumstances where they wouldn't have to if it's not applicable for the business, what are some of the reasons that might skirt that.

ATTORNEY-GENERAL: Yeah, I mean that there, you'll see the Bill obviously in due course, but there are obvious ones like if that if the position was no longer going to be available in three months' time. If offering that full time position could cause the business to go under, so many of these things aren't novel. They have been seen before, there was a casual conversion clause which was subject to disallowance in the Senate, and if you go and have a look at that it's based on that structural model which everyone's seen before, and which is kind of common sense and the reasonable things. Effectively what the bill says is that the employer must offer this right to convert to permanent employment full time or part time unless there are very, very good reasons why the business just can't do that,

QUESTION: Given that so many businesses are so unstable, couldn't most businesses probably fall into that category of it's potentially not viable?

ATTORNEY-GENERAL: Well, some businesses are growing. Some businesses are still struggling. We want them to grow, but the major problem here is that there is a significant barrier on employment, because if you're a small business person you are confused because of the situation that has developed because of a court decision as to how you actually employ someone as a casual. And once you employ them as a casual how do you pay them and make sure that you're paying the loading, and then don't also have to pay them for things that the loading is meant to compensate for. So we've got to fix the primary problem which is to create certainty in the Australian economy which actually gives people the confidence to employ. So I'll just take one more.

QUESTION: Are there any protections to ensure that this bill doesn't incentivise employers to deliberately put variability into the hours that fall into that structure?

ATTORNEY-GENERAL: Yep, so we don't want businesses doing anything artificial so that people don't fall into that category where they have a right to be offered and the Bill deals with that.

QUESTION: Would you describe the Bill as more tinkering around the edges of the system rather than a wholesale change like a WorkChoices?

ATTORNEY-GENERAL: It is a good question to end on. So the ideological IR brigade will write that it's, you know, just tinkering around the edges and it's too modest. Some people will describe it as radical. It's clearly neither of those two things. It's very consequential change, but it's clearly not revolutionary change to the system. It's incremental consequential change that can possibly - in fact we think hopefully - have a passage through Parliament, create jobs by removing barriers to job growth. Thank you.