Labor Senators acknowledge that the intent of this bill is to address energy market misconduct to improve competition and ensure that Australians have access to affordable and reliable energy.
Labor Senators welcome the government's agreement to Labor's amendments on 23 October 2019.
These amendments addressed significant oversights in the original bill presented by the government and ensure divestment does not lead to the privatisation of government owned electricity assets, and that basic workers’ rights will not be impinged by divestment orders.
Evidence provided to the inquiry in written submissions and by hearing witnesses is detailed in the committee's report.
Labor Senators know that Australians demand careful management of essential services.
With this in mind, Labor Senators remain concerned that the policy analysis undertaken to support the government’s legislative intent was incomplete.
One major issue for Labor Senators is matters relating to non-registered worker agreements.
In particular, this bill is being progressed at a time when the energy sector in Australia is undergoing significant change due to the deployment of new technologies and the inevitable closure of legacy generation assets as they reach the end of their design life.
The Australian Energy Market Operator (AEMO) has stated twelve legacy coal fired power stations are expected to close in the next ten years, as plants reach the end of their design life.
The Electrical Trades Union of Australia (ETU) and the Construction Forestry Maritime Mining Energy Union (CFMMEU) have raised as a significant issue for workers, the overlap between the functioning of this bill and the process of plant closures.
The ETU stated a divestiture order applied to an ageing generator scheduled to close:
…puts at risk all of the good work that may have been done in planning to minimise the impacts of the closure and the disruption to the community.
…a business such as a power station that is closing is often a massive part of the community. Often, the community is built around the power station. The supply chain and the local businesses in the community are all heavily tied into that bit of industry. Often what happens, not always willingly, is that community pressure or political pressure brought to bear on the company results in a range agreements being struck around what is going to happen to the workforce, how the community will transition, and what the site might be used for in the future, for example. In this current draft of the bill, if all of those agreements have been struck and a whole plan has been put in place and a divestment occurs, there is nothing binding on those agreements transferring through to the new owner of the asset. Effectively, the community may have to start again, trying to negotiate with the new asset owner to try to re-establish all of those plans.
Similar concerns were raised by the CFMMEU in a written submission to the committee, with the specific example of the Liddell power station being raised. The CFMMEU stated:
[there exists a] commitment made by AGL Energy Ltd to 'no forced retrenchments' with respect to the retirement of the Liddell power station. This means the company will, inter alia, rely on employee retirements, voluntary redundancies, redeployment to the nearby Bayswater power station and redeployment to other activities at the Liddell site.
This agreement between AGL, the owners of the Liddell power station, and the CFMMEU, the union which represents Liddell workers, is not a registered agreement under the Fair Work Act. As such, it is not captured by the transfer of business provisions that apply to registered agreements in the case of divestiture.
…if a forced divestiture was made with respect to Liddell, the existing commitment by AGL to its Liddell workforce would NOT transfer to whatever business took over the power station, and the employment rights of the workforce would be considerably diminished.
In the view of Labor Senators, it is important that non-registered agreements between workers, their representatives, and asset owners are honoured in the event of a divestment order, and it is appropriate for protections to be included in the bill to this effect.
In addition, due to the changing nature of the electricity sector, and the expected retirement of ageing generation assets in coming years, collaborative efforts between workers and asset owners around managing closures to minimise impacts on workers and communities should be encouraged.
Recommendation
That the bill be amended to ensure non-registered agreements between workers, their representatives, and asset owners, should be protected in the case of forced divestiture.
Senator Alex GallacherSenator Jenny McAllister
Deputy ChairSenator for New South Wales
Senator for South Australia