Speaker I am pleased to present the Fair Work Amendment (Terminating Enterprise Agreements) Bill 2017, and the explanatory memorandum.
Speaker this bill seeks to amend the Fair Work Act 2009 to narrow the circumstances under which an enterprise agreement can be terminated when it has passed its nominal expiry date. Under the current Act, an expired agreement that is still in force can be terminated unilaterally by the employer if the Fair Work Commission considers it appropriate and not contrary to the public interest. This bill would simply prevent the Commission from terminating any agreement if it would result in less favourable terms and conditions for any employee covered by the agreement. It would also invalidate any decision of the Fair Work Commission to terminate an agreement since 22 April 2015 if the decision would not have met the new requirements in the bill.
Speaker, this bill responds to significant concern about expired agreements being terminated by employers in order to force employees on to lower wages and conditions. It’s necessary because the practice has become more common in recent years, particularly since the Fair Work Commission decision in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd on 22 April 2015.
Speaker the Aurizon decision more than two years ago is credited with creating a troubling precedent that has led to some employers resorting to what has been described as the “nuclear option” of industrial tactics. In short, employers threaten to, and indeed do, go to the Fair Work Commission to terminate expired workplace agreements and return workers to less generous awards rates. Faced with this, workers are forced onto less favourable enterprise agreements, thereby losing the wages and conditions they and others had fought for over many decades. As far as negotiating tactics go Speaker, they don’t come any stronger or more potent.
Regrettably Speaker, transport, power and mining businesses have whole-heartedly embraced the nuclear option. And in the fallout workers have lost thousands of dollars in pay and had their leave cut, and in some cases regional communities and towns have been left devastated.
Speaker in the 2015 Aurizon decision the full bench of the Fair Work Commission ordered that a number of expired enterprise agreements covering Aurizon and its employees would terminate the following month. The Commission found that the termination of the agreements was not contrary to the public interest and said that, ‘the bargaining parties needed to set their attention on appropriate terms and conditions of employment that focussed, not on the past, but on the circumstances that prevail in 2015 and those which are foreseeable beyond’.
In essence, this decision significantly shifted the Commission’s approach to the termination of agreements that have reached their nominal expiry date but are still in force. As a result, a string of cases have followed where employers have successfully applied to the Fair Work Commission to rip up expired enterprise agreements despite justified protests from unions and workers. These include the high profile case of Griffin Coal. In that instance, wages were slashed by 43 per cent, 43 per cent Speaker, and this cut retrospectively applied to accrued annual leave and long-service leave. As you can imagine, the impact of this decision on the town of Collie in Western Australia has been devastating. It’s not just individuals Speaker, but whole communities, who are suffering due to this loophole which must be closed.
Today, sadly, the termination of agreements in the Fair Work Commission is commonplace. Hard-won wages and conditions are being driven down and employers enjoy a massive unfair advantage in negotiations for new agreements. Indeed the Aurizon precedent has been blamed for a reported explosion of enterprise agreement terminations from 156 in 2014, to 517 in 2016.
These are obviously troubling statistics Speaker in a time of record low wages growth, particularly when you consider that each of the hundreds of terminated agreements potentially represent entire workforces, or communities as in the case of Collie, driven onto lower wages and conditions. Speaker we can’t allow this to go on. We can’t have workers going backwards. We don’t want nuclear warfare in our enterprise bargaining. This is not the path to productivity. This is not the path to fairness.
Which brings me back to the bill I present today, because the simplest approach to stopping employers from using the nuclear option, is for this parliament to change the law as it applies to termination of expired enterprise bargaining agreements.
Speaker this bill would create a level playing field for employees and employers because it would prevent the Fair Work Commission from terminating an agreement if it would result in employees going backwards. It would also invalidate any decision of the Fair Work Commission to terminate an agreement since the Aurizon decision in 2015 if the decision would not have met the new requirements in this bill.
Speaker just last month, in a landmark decision that sent shockwaves across the country, Murdoch University became the first public institution to use the nuclear option when the Fair Work Commission ended the enterprise agreement covering staff at that Western Australian university. Of course this was a devastating and shocking move by Murdoch University for the individual workers who now face the real possibility of lessened conditions including significant cuts to salaries, super contributions and leave.
But it is also a decision with wider ramifications and one that will send a shiver down the spine of staff at universities around the country – including at the University of Tasmania where staff are working under the shadow of an expired enterprise agreement. Yes, Murdoch University has agreed to maintain some workplace conditions for six months, but the National Tertiary Education Union is predicting dire consequences for staff including cuts to salaries of between 20 and 39 per cent; cuts to superannuation contributions of up to 17 per cent; reductions of redundancy payments of up to 80 per cent; the withdrawal of paid parental leave; and the loss of two days of personal leave.
Speaker, how is staff at Murdoch University supposed to negotiate a new enterprise agreement in this situation when the employer has its finger ready at the trigger? Frankly it’s a terrible power imbalance that gives employers a most formidable weapon and puts staff between a rock and a hard place. Of course there will be enormous pressure on workers, trying to bargain in this unfair environment, to sign onto new agreements with lesser conditions than they would have accepted had they being negotiating on a level playing field. No wonder the National Tertiary Education Union has been inundated with emails from concerned staff from Murdoch since the decision a few weeks ago. No wonder staff at other universities, including at Utas in my electorate, are watching on in fear. What a terrible situation to put workers in Speaker.
Shamefully, sitting on the sidelines cheering on Murdoch University is Education Minister Simon Birmingham, who is cutting the teaching budgets of universities nationally. He would be relishing the prospect of up to 30 universities across the country cutting staff costs using the threat of terminated enterprise agreements.
Surely Speaker this is an unintended consequence of the Fair Work Act, one that is being used as a weapon against employees. The rules of fair play have been broken and it’s just too easy at the moment for employers to undercut their workers’ wages and conditions. Frankly the Aurizon precedent has opened a door that must be shut.
Speaker the aim of the Fair Work Act is to achieve productivity, and fairness, through an emphasis on enterprise bargaining. The bill I present to the Parliament this morning would help achieve that because it would simply return us to the original aim of the Act. In other words it would help recreate a more level playing field for workers, and their employers, by returning the emphasis to fairness and productivity.
There’s nothing complicated about any of this Speaker. The bill would simply prevent the Fair Work Commission from terminating an agreement if it would result in less favourable terms and conditions for any employee covered by the agreement. It would also invalidate any decision of the Fair Work Commission to terminate an agreement since 22 April 2015 if the decision would not have met the new requirements in the bill.
Speaker in closing I thank the Australian Council of Trade Unions, and the National Tertiary Education Union, for their advice on this bill as well their support and advocacy on behalf of workers. It’s my hope now that the Government, and the Opposition, will put their political self-interest aside and focus on the public interest and get behind this bill that we have before the Parliament today.
I also thank the Member for Melbourne for seconding this bill, and for his enduring efforts fighting for workers’ rights. Once again Speaker it’s left to the crossbench to stand up for sensible reform.
Speaker it’s time the Fair Work Act lived up to its name, and intent, and I urge the Parliament to support this bill.
Thank you, Speaker.