Second Reading: Fair Work Legislation Amendment (Closing Loopholes) Bill 2023

I rise to speak on the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023, and I move:

That all words after "That" be omitted with a view to substituting the following words:

"the House declines to give this bill a second reading until a Senate inquiry into the bill has reported, and notes that:

(1) the Government's industrial relations changes will make life tougher for Australian businesses by increasing costs, complexity and red tape and as businesses say will likely lead to job losses;

(2) the Minister has admitted in his own public comments that this bill will add complexity to an already complex workplace relations system, and increase prices for consumers for everyday services they have come to rely on;

(3) this bill does nothing to address Australia's weakening economy and falling productivity;

(4) the bill does not assist Australian businesses to hire more people, and just ticks off even more items on the unions wish list including new right of entry laws and new union delegate rights;

(5) despite the Minister promising 'carve-out' for small business, all the Government has done is add more complexity and made it harder for small and medium businesses to navigate the industrial relations system;

(6) the Government has failed to outline how this legislation will enhance productivity, lift wages, or generate more jobs; and

(7) at a time of a cost-of-living crisis, high inflation, businesses struggling with staff shortages and rapidly increasing power costs, the Government is making a bad situation worse".

This bill is intended to deliver a radical systemwide shake-up of Australia's workplace laws. The modest-sounding description of closing loopholes is entirely misleading. This should be called the 'pleasing paymasters bill' because that's what its purpose is—to please this government's paymasters in the union movement who fund Labor's campaigns and who are now demanding their payback. This bill seeks to implement a long list of items which have been on the wish list of the union movement for many years. In the course of doing so, it will do enormous damage to economic growth, to productivity and to the rights of Australians to live, work and engage in the economy as they choose.

The minister has openly admitted that the changes in this bill will see an increase in prices for consumers. We all want Australians to have safe, high-wage, sustainable jobs and to be rewarded for their hard work and experience, but these laws will result in fewer jobs, more cost to Australian businesses and a weaker economy. The measures in this bill will tie up Australian businesses in more red tape and make it more difficult to hire Australian workers. This bill is an attack on labour hire, the digital economy and casual employment and gives unions unprecedented rights of entry into businesses. It's about eroding the independence and autonomy of individuals who want to work in their own time and on their own terms. It's about putting significant constraints on businesses and employers wanting to innovate and manage their operations in a modern, efficient way. The coalition will not be supporting this bill.

In the time available to me today I want to speak firstly about the appalling process being followed by this government with this bill; secondly about the very damaging economic consequences which will flow from this bill; and thirdly

about the attack on the digital economy which this bill represents. And, finally, I want to address a series of deeply problematic changes that this bill aims to make, including the union right of entry into workplaces, the extraordinary restrictions proposed on labour hire businesses, the attack on casual employment contained in this bill and the expansion of the Fair Work Commission's jurisdiction to cover the road transport industry.

I want to start by highlighting the appalling process this government has followed with this bill. The opposition is deeply concerned that this minister is yet again attempting to ram radical changes to Australia's industrial relations system through the parliament. This voluminous bill was introduced yesterday. It is 278 pages long. Yet, less than 24 hours later, the government is bringing on debate on this bill. There are well-established conventions in this place so that parliament can do its work properly. It is normal to allow a period of time after a bill is introduced so that non-government MPs are able to properly consider the bill and formulate a response. It is normal to allow a period of time for the opposition to properly examine and consider the bill via its party room and shadow cabinet processes.

Equally troubling is the minister's very sharp practice over the past few months in relation to this bill. There has been no exposure draft as would ordinarily be good practice. Consultation has been highly selective. Those who have been consulted have been forced to sign non-disclosure agreements, barring them from discussing publicly what they have been told. This is a disgraceful way in which to take forward extremely wide-ranging changes to Australia's industrial relations system. Australians should rightly be very suspicious about what the government is doing here. This is a smash-and-grab legislative raid. There's only one reason why the government is doing everything it can to make it difficult for members to properly consider the terms of the bill and to prepare for debate, because this is a truly dreadful bill and the government is doing everything it can to minimise the scrutiny this bill receives.

I want to turn to the very damaging economic consequences this bill will have. The focus of any industrial relations reform should be to make us more productive and to create more jobs. The link with productivity is the key. The more productive our economy is, the more businesses can prosper and grow and create well-paid sustainable jobs for Australians. Any change to our industrial relations system must be designed to improve productivity, to grow wages, to enhance competition. These are the ingredients of a successful economy, and this is precisely the opposite of what we see with this bill.

There is no reason to attack existing arrangements that are working effectively, and the government has made no case for doing so. On the contrary, the changes proposed in this bill will have very damaging economic consequences for our nation. Australians are facing a cost-of-living crisis, but the measures in this bill will make things much worse. And why would the government be doing this? Because this government will do anything to implement the wishes of their union paymasters, and in this bill this government is fulfilling a long list of union demands.

These measures are designed to grow not just union membership but union power and control of the economy. These measures are not designed to improve productivity, to grow wages or to enhance competition. Indeed, many of them are designed to do the exact opposite. Why would the government attack, in this bill, those who work in the digital economy? Why would the government attack, in this bill, labour hire companies? Why would the government attack, in this bill, tradies? Why would the government attack owner-drivers of trucks? Why would the government attack independent contractors in a whole range of sectors? The answer is that, commonly, none of the people in these groups have any particular interest in joining a union. This bill is nothing less than payback by the current Labor government for the donations it has received from the union movement.

Let's look at what a range of industry participants and business groups have had to say about this bill. The Australian Chamber of Commerce and Industry said:

The only winners in this are union chiefs. The only loophole this bad legislation is looking to close is that of plummeting union membership …

This is a continuation of a radical industrial relations agenda, and we are again bracing ourselves for further risky changes to our workplace system.

The government has not made a case for these changes. It has not been able to outline how this legislation will enhance productivity, lift wages, or make it easier to generate more jobs.

If you're in labour hire or want a casual job, prepare for unemployment. If you are a service provider and want to advertise online, prepare for unemployment.

The Council of Small Business Organisations has said this:

The small business community reject the intrusion of so much more complex regulation into the ability to be productive and flexible, let alone just getting on with being in business and employing more people. The Governments announced changes in the next tranche of what has been labelled "IR Reform" and "Closing the loopholes" will cause business to restrict their operations and employ less people. … The complexity and breadth of impact doesn't solve problems. It will confuse everyone …

The proposed changes will also increase the costs of all impacted businesses, leading to an increased cost of living.

The Australian Industry Group said this:

There is nothing in the Federal Government's latest workplace relations proposals that would create a single job, add to job security, drive sustainable wage growth, raise productivity, encourage a person to start a business, encourage an employer to grow their business or would simplify our complex workplace relations system …

The proposals … are the antithesis of what is needed to build a 21st century competitive economy.

The workplace relations changes will add uncertainty and complexity to the employment of millions of casuals, contractors and labour hire workers.

Let me turn to the extraordinary attack that this bill represents on the digital economy. Over the past 20 years, millions of Australians have chosen to organise aspects of their life and work around the use of convenient and efficient digital platforms. This is true for those who use those platforms to sell services and goods. It's also true for those who use those platforms to consume services and goods. With the changes in this bill, the Albanese Labor government is saying to those Australians, 'We are going to stop you exercising those choices you have freely made.' As the Australian Chamber of Commerce and Industry observed, 'With little regard for the millions of Australians who go online for rideshare, food delivery and myriad other services, this legislation proposed by the government puts at risk the easy access that consumers want. Your food delivery or your lift home on a Friday night will be more expensive and less accessible because of these changes.' The additional cost burdens this bill imposes will be passed through to consumers,and these changes are a serious threat to the future of Australia's digital economy and many digital platforms. That, of course, is the precise agenda of this minister. He has notoriously described the gig economy as a cancer.

Under this bill, the government proposes to give the Fair Work Commission new powers to set work rules for digital economy workers as well as for independent contractors if they are assessed to be 'employee-like' in their working arrangements. But, despite the minister's rhetoric, this will not just be limited to people who are delivering food ordered over digital platforms. The sweeping new laws are going to capture huge swathes of industry, from the care sector to the rideshare industry, with needlessly complicated and productivity-killing rules. But it goes further. These laws will impact tradespeople, like builders, electricians, plumbers and other professionals, who advertise their services online, and, ultimately, consumers who go online to find those services.

The most significant risk with the proposed 'employee-like' reforms is the broad range of independent contracting arrangements which may be captured by this new jurisdiction in the Fair Work Act. The reality is that a significant number of independent contractors advertise their services through so-called digital labour platforms, and this is a good and desirable thing. The number will only grow as technology advances. For example, most traditional tradespeople don't just advertise their services through the white pages anymore; they use apps and websites like hipages, Oneflare and Airtasker, just to name a few. Similarly, professionals may use Expert360 and freelancer.com. Tutors and sporting coaches may use platforms such as Learnmate, Playbook.coach and Superprof. Pet sitters and walkers may use platforms such as Mad Paws and Pawshake. Disability support workers may use platforms such as Mable. These proposed changes will hinder the choices made by millions of Australians who use platforms like these, and Australians who use them to allow them to be their own boss.

The economy-wide innovation-killing implications of this bill are very bad news. The minister himself has said that Australians will pay more and lose the convenience of many services which are delivered today through the use of digital platforms. Australian consumers will no longer be able to access the services they have become used to obtaining quickly, conveniently and affordably. Australians who wish to provide their services through a digital platform, connecting them quickly and efficiently to customers, will be blocked from doing so. Innovative businesses will be penalised and forced to turn back the clock to old ways of working, leaving them less able to meet consumer demands. By burdening innovative businesses who are using technology to better meet customer needs, this government is holding up a stop sign to potential technology innovators and investors. What Australia needs to stay competitive globally and to maintain and grow our prosperity is more businesses which are using innovative technology to serve customers more quickly, efficiently and responsibly. But this bill is saying to Australia's technology sector: 'Back off. You are not wanted.' Instead, the government is trying to return Australia to a rigid 1950s-style economy, with all kinds of restrictions on how and when people can work.

Let me turn to some of the other deeply problematic changes this bill seeks to make. The bill will amend the Fair Work Act to enable unions to exercise right-of-entry powers without any notice whenever it relates to so-called wage underpayment. To gain immediate entry, union officials need only assert to the Fair Work Commission that they suspect a case of wage underpayment. No evidence is required to make their case. So, if you're in a workplace and a gentleman with tattoos and a baseball bat turns up, somebody with a significant criminal record, as so many members of the CFMMEU have, you will now be in a country where that person has the right to enter, effectively without notice. That is the change that this government is proposing in this bill.

Under this legislation, union delegates will have a new workplace right to protect them against employers that refuse to deal with them, mislead them or hinder or obstruct their rights as a delegate. A mandatory term would be included in awards or enterprise agreements giving effect to primary and ancillary delegates' rights. That, of course, is all about protecting the interests of the union bosses. The ancillary rights include so-called reasonable access to communicate with members and potential members. 'Potential members' may be people who have zero interest in joining a union, but they're going to be exposed now because the legislation requires the so-called protection of an ancillary right to communicate with potential members about matters of industrial concern, workplace facilities, paid time, training as well as delegates having paid time to undertake these functions.

These are all costs on businesses which will make it harder to employ people. And all costs are imposed regardless of whether workers in that workplace have shown any interest at all in joining a union. Of course there is a place for unions in our economy. The coalition doesn't question that for a second. But let's also respect the choices of Australians. But that's not something that the government are interested in doing. They're not interested in doing that because the unions, as we know, are their paymasters. The unions control the preselections of the Labor members of this parliament, and those Labor members are responding to the wish list of their union paymasters. I make the point that the provisions regarding union rights of entry, and particularly the provisions in relation to ancillary rights and so on, were unexpected and unannounced. They were not included in the government's 2022 election policies. They were not foreshadowed in any of the public consultation papers it released in April 2023.

Let me turn to the restrictions proposed to be imposed on labour hire businesses under the misleading description of 'same job, same pay'. This bill constitutes an unfair and unjustified attack on labour hire employers as well as the businesses and the workers that depend upon the labour hire sector. The union movement has for a long time been hostile to the labour hire sector, but it is very clear—there can be no doubt—that labour hire businesses today are required to comply with exactly the same employment laws as all other employers. The labour hire sector has an important role to play in Australia's economy. At the moment, there are material constraints on the labour market flowing from shortages of both skilled and unskilled labour, and those constraints are operating as a brake on our economy. In those circumstances, it is extraordinarily reckless for this government to implement a measure that will make it harder for businesses to secure the labour that they need.

On this side of the House, we recognise and respect the fact that the Australian labour market is diverse. It provides a range of different forms of work for people in different circumstances and with different needs. That respect for the diversity of the workforce is not shared by those on the other side of the House, and it's certainly not shared by the union movement. They respect only forms of work which are controlled by unions. The opposition recognise the diversity of our labour market. We believe strongly that those who choose particular forms of work, such as casual work or working for a labour hire business, are making an entirely legitimate and appropriate choice, and it's important that those options are available to people in the workforce. What the Labor Party, the government, is seeking to do with this bill is to discourage the diversity of forms of employment that are in the Australian economy. The consequence of this legislation, should it pass, is that, at a time when businesses across Australia are crying out for staff, they will be faced with an increase in red tape and extra difficulties in hiring workers.

It's very clear that the provisions in this bill in their operation go well beyond labour hire, and, despite the soothing language of 'closing labour hire loopholes', the troubling reality is that the measures in this bill extend a long way beyond the labour hire sector. In turn that will have a potentially very extensive and disruptive impact on Australia's economy because of the block it will place in front of businesses who are seeking to access services they need in the course of operating their own business. Key to this is the fact that the government's proposal in the legislation does not define labour hire as a business that provides workers to another business who then work under the supervision of that business and as part of that business. This is the standard definition that is used in the labour hire licensing legislation. Instead, the approach in this bill is very different. Under the operation of this bill these provisions will also cover service contractors, so contractors who are engaged by a business to provide a service, often using their own plant and equipment, their own expertise and their own management as well as their own workforce. Any business which engages service contractors—not just labour hire contractors but service contractors—will be captured under these ill-conceived provisions.

One of the other implications of what this bill will do is that labour hire businesses will not be able to negotiate the terms and conditions on which they employ workers, and those who work for labour hire businesses similarly will not be allowed to sit down and have those negotiations. Under the provisions that are contained in this bill, labour hire employees will find themselves in a remarkable position. They will be denied any role in negotiating their own wages, and that would place them in a remarkable circumstance compared to the rights which are made available to workers in every other industry.

We know that labour hire workers today represent around 2.3 per cent of employed people in Australia. We also know that those who work for labour hire firms choose to do so for a range of reasons. It may provide them with additional flexibility, it may give them tailored working conditions, it may give them an increase in the variety of the work they do and it may heighten the independence with which they can consider their own work options. Labour hire can be a source of flexible and varied labour solutions for a range of businesses and can provide surge capacity, including assisting businesses to handle peak periods. Regrettably—and it is deeply regrettable—the Labor Party and their union paymasters have decided to demonise those Australians who choose to work in this mode, a mode which provides options for people in a range of different circumstances and with a range of different needs. According to the rhetoric from this government, the objective in this part of the bill is to stop businesses from 'deliberately undercutting bargain pay and conditions' and to 'avoid bargaining for an enterprise agreement'. But the reality is the provisions in this bill go a very long way beyond giving effect to that particular objective.

Any defensible same job, same pay policy would need to do the following things. It would need to be targeted to a clearly defined labour market problem backed by evidence of where the problem lies. It would need to apply only to labour hire rather than other forms of commercial contracting. It would need to allow workers to be rewarded for their hard work and paid more in recognition of higher levels of skill or higher levels of experience. And it would need to be practical and workable. On any analysis this bill fails to do any of those four things.

Let me turn next to the attack on casual employment which this bill represents. The Albanese government has conspicuously failed to explain exactly which so-called loophole it is trying to close. This bill will introduce a new definition of casual employment that would replace the existing definition that was inserted in the Fair Work Act in 2021 by the previous coalition government. The measure is unnecessary. To the extent that there was a problem with people who wanted to transfer from casual to permanent employment not having the opportunity to do that, that problem was fixed with the changes we made in 2021. All casuals already have the right to convert to permanent status after 12 months if they work regular hours. This bill would add a new right after six months, in addition to the existing system allowing conversion after 12 months.

The new definition of a casual employee is three pages long. It includes 15 factors to determine if an employee is a casual. The 15 factors 'must all be considered but do not necessarily need to be satisfied'. An employee will be a casual only if they meet these factors. If not then the business is breaking the law if they tell the employee that they are casual, even if the employee wants to be casual. The new conversion process is eight pages long. The new conversion regime for employees to convert after six months is separate to the existing regime providing for conversion after 12 months, so there will be two streams regulating the same thing.

The new six-month conversion right has a test with 11 factors, four sections and seven subsections in the legislation. Employers must provide 'detailed reasons' to employees in response to conversion requests. Employers can be exposed to involuntary arbitration by the Fair Work Commission if a worker or union disputes their decision or their interpretation of the definition. This is nothing short of a comprehensive attack on casual employment, even though many Australians freely choose casual employment and prefer that mode of work, not least for the casual loading they receive but also because it allows them to combine work with other responsibilities such as study or family.

Another item from the unions' wish list contained in this bill is the renewed attack on owner-drivers in the road transport industry. Through this bill, the government is effectively reviving the failed Road Safety Remuneration Tribunal. This body was a policy failure which did profound harm to the lives and livelihoods of hardworking owner-drivers. This new body within the Fair Work Commission will have the same profound impact on the road transport industry. Owner-drivers will again lose the flexibility to set their rates and conditions. Australians will ultimately feel the pinch at the supermarket check-out. Parliament should not bend to the demands of the Transport Workers Union and should reject these changes.

Also included within these hundreds of pages of legislation is a provision which gives the minister the power to make regulations for 'supply chain participants'. The effect of this provision would be to hand over control of Australia's supply chains to the Fair Work Commission. This will impact everyone from ship to supermarket and road to restaurant. It is a disastrous overreach.

Let me conclude where I began. This is a truly dreadful bill. It does the very opposite of what Australia needs now. Rather than boosting economic growth and improving productivity, it will impose new costs and burdens on businesses, workers and consumers. This bill is brought forward not to advance the interests of our nation but to advance the interests of the union bosses, who are the paymasters of the Albanese Labor government. I could quote many, many people about what a bad bill this is, but let me quote from the chief executive of the Business Council of Australia:

"Any government that's serious about cost of living would not do this.

"They should not add cost and complexity at a time when people are struggling to pay their bills.

"We need a system that drives productivity, not stifles it, because that will stifle wages growth.

"The case has not been made for this radical shake-up.

I conclude by making it very clear to the House that this is a truly bad bill, and the Liberal and National parties are entirely opposed to it.