Fair Work Legislation Amendment (Closing Loopholes) Bill 2023

Zali Steggall

I move amendments (1) to (11), as circulated in my name, together:

(1) Clause 2, page 4 (table item 21), omit the table item.

(2) Schedule 1, item 1, page 5 (line 4) to page 7 (line 26), omit the item.

(3) Schedule 1, item 6, page 8 (lines 17 to 20), omit paragraph 66AAB(a).

(4) Schedule 1, item 6, page 9 (line 1), omit "6 months", substitute "12 months".

(5) Schedule 1, item 6, page 9 (line 3), omit "6 months", substitute "12 months".

(6) Schedule 1, item 6, page 9 (lines 23 to 25), omit the note.

(7) Schedule 1, item 6, page 10 (lines 30 to 33), omit paragraph 66AAC(4)(a).

(8) Schedule 1, item 6, page 11 (line 7), at the end of subsection 66AAC(4) (before the note), add:

; (d) it is probable that the employee's position will cease to exist in the period of 12 months after the day the notification is given;

(e) it is probable that there will be a significant change in the employee's hours, or patterns, of work in the period of 12 months after the day the notification is given.

(9) Schedule 1, item 18, page 18 (lines 6 to 11), omit paragraph 125A(2)(aa).

(10) Schedule 1, item 308, page 216 (lines 9 to 17), omit paragraph 92(2)(a), substitute:

(a) to resolve an uncertainty or difficulty relating to the interaction between the instrument and the provisions of Division 4A of Part 2-2 of the amended Act; or

(11) Schedule 1, item 308, page 216 (line 27) to page 217 (line 20), omit subclauses 93(1) to (4).

These amendments are important, because, after extensive consultation with businesses in Warringah and broader organisations such as COSBOA and the Business Council, briefings with the unions and liaising with small businesses and local chambers of commerce, I know there is an incredibly high level of concern at the overreach of this legislation. No-one has disputed, throughout the course of this debate around all the amendments, that some of the intent is genuine. But, in relation to much of these amendments, I feel that it's a sledgehammer being taken to a whole area rather than being more specific, in particular in relation to the definition and the issue of casual employment. I'm sure the minister would be aware of this, but it came as quite a surprise to me just how many different definitions of small business we have in Commonwealth legislation. He's nodding his head, so I'm sure he knows. We currently have 12 different definitions of small businesses across Commonwealth legislation. So it's very important to know that, when we start to think of provisions such as those in this legislation that apply differently for small business and big business, some businesses won't even know under which piece of legislation they are considered a small business and under which they are considered a larger business. That becomes incredibly important when we have questions of compliance and serious consequences.

The amendments that I have moved reverse some of the changes proposed in relation to casual employment, in particular because, under this legislation, the proposal is that there will be a conversion after 12 months for a small business but six months for a larger business. The amendment that I have moved restores the conversion to 12 months for all businesses instead of six months for some because of the very problem of so many different definitions of small businesses. Another amendment removes this new definition of casual. Another amendment removes the firm advancement commitment of continuing or ongoing work as a grounds of conversion and introduces the right for conversion to be refused where the role will not be necessary and/or will be significantly changed within the following 12 months. This is incredibly important. Where, for example, retail stores may be intended to be shut or there might be a restructure planned, the loss of that flexibility for businesses will be incredibly important, and it's important that businesses are able to argue against conversion of a casual employee to a permanent employee on the basis that there are likely to be significant changes within the next 12 months.

As I noted in my speech on this bill several weeks ago, the change to the definition of 'casual' and the related provisions cause a lot of uncertainty for business in the government's original bill. It will introduce a degree of rigidity into the employment environment, which is highly likely to have unintended consequences and see businesses more reluctant to hire additional casuals when we are already facing significant headwinds in our economy, and they are likely to carry through to 2024. I note the comments of the minister in relation to different views on these issues, but I think it is important to note that, whilst there has been consultation on this bill, there hasn't really been an assessment as to its likely impact or real workshopping to iron out those unintended consequences. So I'm concerned that the government's original bill, without these amendments, doesn't contain a sufficient degree of flexibility for employers and employees, and accordingly some businesses will suffer. It is a sledgehammer approach.

In particular, casual work is key for many workers, including students and parents who want flexibility, some regularly. It provides for higher take-home pay, with an average of 25 per cent loading. For so many young Australians getting their first job, learning to work and gaining key employability skills—I really want to emphasise that point—casual work is an entry point and is incredibly important, particularly for small businesses in hospitality and retail navigating uncertainty and changing conditions. (Extension of time granted)

It's incredibly important that small businesses be able to continue having that flexibility of casuals, but with that flexibility is often a regular agreement as to what days and hours a person will work. If I take the example of a parent, they do want to know that they are going to work on a casual basis of Monday, Wednesday and Friday because those are the days they have child care organised, for example. But, if there are changes to their provisions or child care, they want to also be able to change those agreements of days of work, and so losing that flexibility is incredibly difficult and, I think, dangerous for small businesses but also for the people looking to work in an environment that works for them. I would argue the current definition works. It's clear and reliable for both employees and employers. Complicating the definition as the government proposes will only cause confusion.

In relation to the firm advance commitment aspect of continuing or ongoing work as grounds for conversion, it makes no real difference, as you cannot provide an advance commitment, which means you cannot give a casual worker a roster. Again, it's more uncertainty and more confusion from the rules that are already there. It's that complexity that so many businesses are really objecting to. In difficult economic times, the government should be focusing on making things simpler to really assist when it comes to the cost-of-living crisis and giving businesses that certainty. The key message I hear from businesses in Warringah and around the country is that more red tape, more confusion and more complicated legislative changes are just making it harder for them. So I would urge the government to consider these amendments—if not in this place, then in the other place—to make things much simpler for small businesses and keep flexibility in the system.

Tony Burke

I thank the member for Warringah. As I've acknowledged with the other crossbench members, there's no doubt the member for Warringah has always been very closely engaged with the businesses in her electorate. If there were ever evidence of that, it was the confidence when the member for Warringah first arrived here and a whole lot of people not from my party said, 'Oh, she'll only be here for one term.' So the engagement is strong, and what that brings to the chamber is respected.

I want to explain briefly one reason and in a bit more detail another two reasons why the government's voting against these amendments. The examples that were given with respect to the six- to 12-month change are examples the government believes would already be covered by the fact that you would have to have a firm advance commitment and the requirement of 'fair and reasonable', both of which are contained in the definitions. The government doesn't believe—and I certainly don't believe—that the sorts of examples the member for Warringah has given would in fact end up being problems. I think those sorts of examples of flexibility and surge would be covered by the provisions I just referred to.

But one of the other very significant things these amendments do is delete the definition of a casual and the definition of employment. And while I respect that, in terms of legislation, what we are doing on these definitions is new, in terms of Australian law it's not. We had massive change in very recent years as to the accepted legal definition of a casual and the accepted legal definition of employment. Effectively the court went to a position where, on both, it effectively said: 'We're no longer looking objectively at what's going on. Whatever your contract says, that's the end of the story.' These amendments effectively are attempting—as close as you can with legislation, because obviously you can never do it identically, because the common law is not like that, as the member for Warringah knows better than most people in this room—to reflect what was believed to be the definition of casual and the definition of employment prior to those court cases.

I think the best examples I can give would be to refer to the facts of those court cases, to explain the problem we are wanting to solve. The Rossato case was a case about a casual who, under common law, normally would have been regarded as being permanent but was found by the court to be a casual. What were the circumstances of that worker? They worked for a labour hire company called WorkPac. On commencement the worker was given a 12-month full-time roster, from the start, and told they were a casual. Objectively, being given a 12-month full-time roster would have been seen as having the security of permanent employment. Up until the Rossato case, most people would have presumed that that was where the law rested. The court found otherwise. This legislation is attempting to return to an objective definition of a casual, which we made a specific election commitment on.

Similarly, the cases of Jamsek and Personnel Contracting changed the definition of employment such that, where it had previously been a much more practical common law definition, it became effectively whatever the contract says. That now determines whether you're an employee. The best example I can give of this is the example that was in Personnel Contracting. A backpacker turned up to a construction site and all they had in terms of their equipment or skills that they brought were 'a hard hat, boots, and a strong constitution'. They were told to get an ABN, because they were actually being told they were a small business; they weren't an employee. On every objective definition, that backpacker was not running a small business. So, the definition of employment which is there in the act, while it's new—it wasn't previously in the act; previously it didn't need to be, because the common law had presumed a practical objective definition of employment—the High Court has now decided that that's not the case and the parliament basically has to make a decision on casuals and on employment as to whether we want to allow the High Court's ruling there to be how we want the govern employment law.

The view of the government is that the person turning up whose only equipment is a hard hat and boots and whose only skill that they're bringing to it is a strong constitution was not a small business. We believe it was the fudging of an employment relationship. (Extension of time granted) Similarly, regarding the labour hire worker who was given a 12-month full-time roster and wanted to be seen to be a permanent worker, we don't believe that they should be found to be a casual simply because that was the contract that the employer signed on day one. That's the problem we're trying to solve, and they're the reasons we don't support the amendment that is being moved.

Zali Steggall

I thank the minister for those clarifications in response, but I would argue that you've actually just proved the very point that I was making—that you're taking a sledgehammer to particular problems by making it so far-reaching in relation to many, many more businesses. You're taking a couple of instances that had broad reach, but, because of where your definition of 'small business' lies and because of the broad application of the change that you're making, the only real defence you're providing is that there will be an interpretation around the reasonableness and 'advanced roster' that would be sufficient to prevent this legislation impacting a much greater number of businesses than you appear to intend. That's where the argument is—this is not fine-tuned enough for the very particular cases of bad actors that you are attempting to deal with. But, ultimately, the court interpreted the legalities and stood by the terms of the contract by which that employment was governed. I think there is merit in that interpretation, even though it was not the one that, maybe, this side of government would have preferred. At the end of the day, the problem I have—and, I think, many of my colleagues have with this legislation—is that, in attempting to deal with a particular issue, this is going to have a much broader impact.

Long debate text truncated.