CHAPTER 2

CHAPTER 2

Key issues

2.1        The bill has received a mixed response from submitters and witnesses. Employee and worker advocacy groups generally supported the bill, and many have made recommendations to improve the current proposals.[1] In contrast, employer groups strongly objected to the bill, submitting that other more important reforms had been overlooked and that the amendments proposed by the bill would impose red-tape on businesses and be costly to implement.[2] The key issues discussed in submissions and during the hearing in Melbourne related to the family friendly provisions, protections for pregnant workers, the anti-bullying measures and the changes to right of entry.

Family friendly provisions

2.2        The family friendly measures proposed by Schedule 1 of the bill are targeted at providing increased flexibility in working arrangements for workers. The changes include more flexible parental leave, increased rostering protections, and expanded rights to request flexible working hours.

Expansion of the right to request access to flexible working hours

2.3        The bill proposes to expand the circumstances where an employee may request a change in their working arrangements. The amendment extends this right to an employee who: is a parent or has responsibility to care for a child who is of school age or younger; is a carer; has a disability; is 55 years of age or older; is experiencing domestic violence, or provides care and support for a family member who is.[3] The employer may refuse any request on the basis of reasonable business grounds, and the right to request may only be exercised by employees with 12 months of service.

2.4        The committee heard that the majority of requests made by employees are minor and a typical request would be to adjust commencement or finishing time by 15 minutes.[4] Both employer and employee groups acknowledged that every day in Australia employers receive requests from workers for flexible hours and, in most instances, requests are carefully considered and employers make accommodations where possible.  Employer groups submitted that for this reason, the amendments proposed should not proceed because they are not needed and would only serve to burden 'the vast majority of employers, who do the right thing, with over regulation'.[5] In contrast, the Australian Council of Trade Unions (ACTU) and others submitted that the reforms proposed are required because of the very small number of employers that are not engaged in best practice.[6]

2.5        Access to flexible work arrangements is very important to Australian workers and the Australian economy. DEEWR cited research conducted in the United Kingdom that increased rights to request flexible working hours could improve productivity and that only 12 per cent of employers reported a negative effect, and the remainder reporting no impact.[7] During the Melbourne hearing Ms Therese Bryant, National Women's Officer, Shop, Distributive and Allied Employees Association (SDA) submitted that:

Many Australians quite rightly have the attitude that families come first. If families cannot get the flexibility at work which they need to balance their work and family responsibilities, then they will reduce their labour force participation with negative financial and wellbeing consequences for that family and for Australian society at large. If we want to increase the level of labour force participation other than by temporary migrant visas, an important measure will be to increase the practical availability of flexible working arrangements to employees while at the same time providing some security around rosters, with the knowledge that at least the impact on an employee's family will be considered in the event of the need to change.[8] 

2.6        The committee heard that in order to make these amendments meaningful, employees need to have a right to request review of the process the employer took to consider the application. Mr Tim Lyons, ACTU, contended that review rights are necessary to make explicit that the employer is required to carefully consider the request, weigh up the advantages and disadvantages, and make reasonable efforts to accommodate the employee.[9] The SDA described the right to request as a 'hollow right' without a review right.[10] The Australian Human Rights Commission, and a number of other submitters, also supported a right to review.[11]

2.7        The Law Institute of Victoria cautioned that the expansion of the right to request may create 'an incorrect impression in the mind of the employee that employees are entitled to flexible work' and also called for review rights for employees where a request is refused for reasons other than reasonable business grounds.[12]

2.8        The Department of Education, Employment and Workplace Relations (DEEWR) advised that the decision was made not to include an appeal mechanism because the Review Panel found that 'employers are taking requests for flexible work arrangements seriously and that in the majority of cases employees can negotiate flexible arrangements despite the absence of an appeal mechanism'.[13]

2.9        Some witnesses and submitters recommended changes to the definitions of the class of people who may request flexible working arrangements. A number of submitters contended that the proposed description of the type of worker who can request flexible working hours is too narrow, and some workers who need to request flexible hours may be excluded, particularly those who have not served the qualifying period.[14]  Some submitters called for the provision to be amended to grant all workers the right to request flexible working hours.[15] DEEWR explained that the terms in the proposed provision are not defined, because the provision is about 'facilitating a conversation'.[16]

2.10      For the purposes of the bill, a person is a carer if they meet the definition of 'carer' in the Carers Recognition Act 2010 (Cth). Carers Victoria acknowledged that some workers would benefit from a more expansive definition of carer. But in their submission stated that, on balance, the definition used in the bill was the right one for two reasons:

2.11      Carers Victoria expressed concern that carers may be unduly impacted by the 12 month qualifying period before they can request flexible work arrangements. The bill as it stands only supports workers with new caring responsibilities who have worked with the same employer for more than 12 months. Long term carers however, 'require flexibility from their first day of work'.[18] The ACTU agreed, and suggested that the definition of carer should be expanded to include workers who are yet to take on caring responsibilities.[19]

2.12      An employer may refuse any request on the basis of reasonable business grounds. The bill provides a non-exhaustive list of the types of circumstances that may be captured by this term, including: excessive cost, lack of capacity, impracticality, significant loss of efficiency or productivity, and negative impact on customer service.[20]

2.13      Some submitters argued that the reasonable business grounds exemption is too broad. For example, the ACTU observed that the 'reasonable business grounds' is a catch all provision and any cost implications for granting the flexible hours would meet the threshold.[21] Dr Anna Chapman submitted that the proposed list of examples of reasonable business grounds is unhelpful, and suggested that the provision should 'be amended to ensure that the employer goes through a process of weighing up various factors, including the harm to the employee of not being accommodated, good management practices...[and] the employer's own interests'.[22]

2.14      DEEWR advised that the Review Panel 'rejected arguments that a definition of "reasonable business grounds" should be included in the legislation'.[23] DEEWR submits that the addition of examples of grounds that constitute reasonable business grounds will assist:

...both employers and employees by providing guidance on sorts of situations where it is reasonable for an employer not to agree to a request. As is made clear in the Explanatory Memorandum the list is not exhaustive and reasonable business grounds will always be determined having regard to the particular circumstances of each workplace and the nature of the request made.[24]

2.15      DEEWR submitted that articulating the right to request in the Fair Work Act can benefit employees because more formal requests for flexible hours are likely to be made, and agreed to.[25] The committee trusts that further consideration will be given to expanding and clarifying the right to request flexible working hours when the bill is amended again in the future.

Consultation on changes to rosters

2.16      Part 4 of Schedule 1 of the bill proposes new requirements for employers to genuinely consult employees about changes to regular rosters or hours of work, and to consider the impact of the new work schedule on employees before making the change. Particular regard is to be given to the impact on the employee's family and caring arrangements.

2.17      Employer groups strongly objected to this proposal, submitting that this amendment reduces flexibility and is problematic where businesses need to quickly respond to changing circumstances.[26] During the Melbourne hearing Mr Cairney, Business SA, submitted that the proposed changes would make consultation unworkable, particularly for small business. Indeed, Mr Cairney argued that the proposed requirement to consult would result in a loss of the grape harvest:

The consultation regarding losses et cetera takes no consideration of what impost that puts on employers, because our reading of it says that for almost every change to an employee's roster—and we are talking about individual employees—there has to be consultation. If I am in the wine industry and we are at vintage, to give you an example, once the sugar levels reach a certain level the grapes have to be picked. And they have to be picked quickly; otherwise, the sugar levels become too high and the quality of those grapes deteriorate rapidly. People working in that industry know that that is part of the industry, but if we are going to go through what is proposed in these amendments then, frankly, those grapes will not be picked.[27]

2.18      The committee asked DEEWR to respond to Mr Cairney's evidence. Mr O'Sullivan, Chief Counsel, disagreed that the consultation provisions are burdensome on businesses, and advised that the example provided about the sugar levels in the grapes increasing would not require roster consultation:

I think there was a bit of a misunderstanding as to what these provisions relate to. They apply to terms that will be included in modern awards and enterprise agreements, and these provisions will only apply to changes to an employee's regular roster or ordinary hours of work...the example that the witness gave, which is that an unanticipated rise in sugar levels—or whatever—would not require a change to a regular roster or ordinary business hours. It would be a change to the hours to do with a particular emergency, and that would not require such consultation under these provisions. [28]

2.19      DEEWR explained that obligation to consult consists of three simple steps: to explain the changes to the employees, to hear the views of employees and then to consider these views and make a decision. There is no prescriptive process that must be followed beyond this and consultation must not occur within a particular time frame.[29] The SDA called for the bill to be amended to add the word 'genuine' to remind employers that they must genuinely consider any views about the impact of the proposed change on workers.[30]

Committee view

2.20      Given that these changes are targeted at encouraging conversations between employees and employers, and there is no obligation to agree to requests and there is no review by the Fair Work Commission, it is difficult to accept arguments presented to the committee that these changes will impose an unfair administrative burden on businesses. Every day in workplaces across Australia employers are negotiating flexible working arrangements with employees and consulting about roster changes. The vast majority of employers are already accommodating the responsibilities of workers where it is practicable. Therefore, in large part, the amendments in the bill represent a codification of existing practice.

Protections for pregnant workers

2.21      Schedule one also contains amendments to ensure the safety and wellbeing of pregnant workers. The proposed amendments clarify the operation of special maternity leave provisions, and provide pregnant employees with less than 12 months service with the right to transfer to a safe job. If no safe job can be found, the employee is entitled to unpaid no safe job leave.[31]

2.22      Employer groups rejected these proposed amendments, submitting that employers should not be required to find safe work or grant no safe job leave for an employee who has served less than 12 months. The Ai Group explained that extending the right to request safe work provision, coupled with a no minimum period of service, impacts particular industries such as the lead industry where there is no safe work.[32] The SDA explained that lead is dealt with in a very specific way and labelled the example provided as 'extreme'. [33]

2.23      The Ai Group also suggested that the balance is not right if a woman could commence a new job and 'the day after they start could say, 'well, I am pregnant and I now want a safe job'.[34] Ms Therese Bryant, SDA, responded saying that the suggestion that a woman would do this was 'absolutely ludicrous' and advised that she had never had an employer complain to her about behaviour of this kind.[35]

2.24      The committee heard that these proposed amendments should be viewed as technical amendments to address an oversight, as similar provisions to provide safe work have been in Australian legislation for 27 years.[36]

2.25      The ACTU observed that the decision by an employer to provide a safe job for a pregnant worker is usually an excellent investment for the company and usually only requires minor adjustments to work practice. The SDA advised that employers commonly adjust work duties to accommodate worker needs, most often for injured workers:

The subjective decision around light work and suitable duties is something that employers are well versed in. They do it every day with an injured worker. They have to understand safe weights, lifting requirements, traffic management, climbing ladders, pulling loads, pushing loads, prolonged standing at checkouts. These are all issues that employers deal with every day with injured workers. A pregnant employee will present with some issues generally in our industry regarding lifting and that would not be an uncommon issue for a retailer to deal with at all. Also, there is the provision of seating where appropriate for a worker who is engaged in long-term standing, which is the nature of retail work. It is not a subjective thing. They have risk assessments done on it; it is the language that they speak every day in retail. So it would not be a foreign concept.[37]

2.26      DEEWR submits that these changes will ensure that all pregnant employees are safe at work and are not disadvantaged as a result of their pregnancy. The changes also protect the employers from having to pay no safe job leave for workers who have served for less than 12 months.[38]

2.27      The bill also seeks to enable a female employee of an organisation to take leave instead of taking unpaid special maternity leave if that employee is entitled to paid personal leave.[39] This amendment implements the Review Panel's recommendation that taking special maternity leave should not reduce an employee's entitlement to unpaid parental leave. The amendment is proposed on the basis of fairness, DEEWR explains that:

The Review Panel formed the view that there is little justification for reducing an employee’s overall unpaid parental leave entitlement on the basis that the employee is required (for reasons beyond her control) to access the special maternity leave entitlement.[40]

2.28      The ACTU described this reform as a 'sensible approach, given that leave is provided for a different purpose'.[41] The Australian Industry Group noted that 'this provision would appear to have few adverse impacts upon employers'.[42]

Committee view

2.29      Employers have a long established duty to ensure that workplaces are safe environments for all workers. The committee agrees that the proposed enhanced protections for pregnant workers are sensible, and in large part consist of technical amendments to correct a previous oversight.

Modern Awards Objective

2.30      Schedule 2 amends the modern awards objective set out in section 134 of the Fair Work Act. The amendment proposes that the Fair Work Commission, when making or varying a modern award, takes into account the need to provide additional remuneration for employees working overtime, unsocial, irregular or unpredictable hours, working on weekends or public holidays, or working shifts.

2.31      Employer groups opposed this reform, arguing that these considerations should be dealt with by the Fair Work Commission in its normal arbitration processes.[43] Employer groups also suggested that the amendment would require every award to 'include overtime and penalty rates'[44] and would result in 'hamstringing the Fair Work Commission in dealing fairly with penalty rates'.[45]

2.32      Employee groups supported this reform, noting that the proposed change largely 'reflects the status quo' that prevails in relation to awards and provides additional support for workers given 'the frequency and severity of attacks on penalty rates in proceedings before the Fair Work Commission'.[46]

2.33      DEEWR explained that the amendment introduces an explicit obligation on the Fair Work Commission to take into account penalty rates. However, the decisions as to what, if any, penalty rates should apply, still rests with the Fair Work Commission.[47] Mr John Kovacic advised that the Fair Work Commission may still decide that additional remuneration is not appropriate, and indeed, some modern awards do not have 'provision for additional remuneration' because 'of the nature of work in that particular industry'.[48]

Committee view

2.34      The proposed amendment to the modern award objectives explicitly requires the Fair Work Commission to consider the need to provide additional remuneration for workers who are working unpopular hours. The proposed amendment does not purport to dictate to the Fair Work Commission the decision it must make in a particular case, and each case will be decided on its merits in the usual arbitration process. Neither does the amendment require additional remuneration to be paid in all circumstances, as some businesses fear it does.

Anti-bullying provisions

2.35      Schedule 3 of the bill contains anti-bullying amendments to enable a worker who is bullied at work to apply to the Fair Work Commission for an order to stop the bullying. These amendments are part of the government's response to the House of Representatives Standing Committee on Education and Employment report Workplace bullying "We just want it to stop".[49]

2.36      The SDA reported a significant increase of bullying in workplaces in recent years. The committee heard that raising claims of bullying often leads to further bullying. Vulnerable groups include injured workers, pregnant women and workers with caring responsibilities.[50]

2.37      All submitters and witnesses to this inquiry were united in opposition to bullying in the workplace.[51] Disagreement focused on the best way to protect workers and provide an adequate means of redress.

2.38      Employer groups submitted that the proposed expansion of the Fair Work Commission's jurisdiction may interfere with internal workplace investigations and remedies, and the Fair Work Commission may not be equipped to promptly and adequately deal with complaints.[52] Employers were concerned that employees who have experienced discipline will bring vexatious actions.[53] Finally, the Ai Group, AMMA and others submitted that bullying should be dealt with as a work health and safety issue, and managed in that jurisdiction.[54]

2.39      AMMA explained that its members usually engage the services of an independent investigator to assess bullying claims promptly.[55] The SDA advised that this was not the usual practice in the Retail Sector, where investigations are usually conducted by an internal person and are not always thorough or independent.[56]

2.40      The ACTU and the SDA view the proposed changes as an important first step and have also made some recommendations for how the provisions could be improved. The ACTU and the SDA recommended that the definitions used by the bill should ensure that all bullying behaviour is captured by the definition; particularly group bullying over a period of time. According to their recommendations, these changes are necessary to allow the Tribunal to deal with bullying complaints where they would otherwise be frustrated on a point of technical jurisdiction.[57]

2.41      The ACTU submitted that bullying is a workplace relations issue as well as a work health and safety issue. During the Melbourne hearing Mr Tim Lyons explained to the committee:

I genuinely think that it is both. There is clearly an occupational health and safety dimension to bullying, but I think it is a general issue on behaviour and workplace relations. Therefore we think that these provisions are a sensible response. If the nation has a specialist workplace relations tribunal, this is an appropriate jurisdiction for it to have, given that there is significant evidence before the parliament in the form of that House of Reps inquiry that this is a very significant problem.[58]

2.42      The Department explained that these provisions are designed to work with rather than replace work health and safety legislation, and, further, that the reforms are necessary to help prevent bullying. Mr Jon Kovacic explained during the Melbourne hearing:

The first point I would make in respect of the bullying provisions in the bill is that they are designed to complement not to supplant work health and safety legislation. The second point that I would make is that, in the context of the House of Representatives committee inquiry, which received in the order of 300 submissions, a constant theme in those submissions was the absence of a mechanism where a worker who was being bullied could seek quick redress to try and have the bullying stopped. It is against that background that that particular committee made a recommendation, one of the 23 recommendations, that the government should put in place a mechanism to give access to a speedy resolution or a mechanism to deal with allegations of bullying. That is what the provisions here do.[59]

2.43      DEEWR is working with the Fair Work Commission to provide advice about how the provisions in the bill will work in practice.[60]

Committee view

2.44      Employers and employees realise the damage that bullying wreaks upon workers, their families and on their productivity. All workplaces should be free from bullying and, where bullying complaints arise, it is imperative that prompt, independent attention is given to resolve complaints.  The reforms do not prevent employers from resolving bullying complaints internally and the committee notes the evidence that this occurs in many instances. The amendments proposed by these provisions provide a safety net for employees when prompt and appropriate action is not taken by the employer.

Right of entry

2.45      Schedule 4 contains a number of amendments to the Fair Work Act in relation to right of entry. The amendments relate to the location of discussions and interviews, and the facilitation of entry to premises in remote areas by permit holders. These amendments also change the Fair Work Commission's dispute settlement powers in relation to transport and accommodation arrangements, and the frequency of entry to hold discussions.[61] Most of the proposed changes to right of entry received qualified support from workers and strong criticism from employer groups.

The importance of access

2.46      The Australian Mines and Metals Association (AMMA) submitted that union officials have no need to access remote workplaces because meeting off-site would be safer and more convenient. Alternatively, union workers could communicate with workers via Skype or email.[62]

2.47      The Maritime Union of Australia (MUA) explained that access to remote sites is important as it enables union officials to provide support to workers after a tragedy. The committee heard that the intention of union officials in tragic circumstances is to offer support to workers – not to interfere with any investigation.[63] The committee was provided with one example where access was not facilitated and workers did not receive support for ten days, and only after the intervention of the industrial regulator. Mr Michael Doleman, MUA, contrasted that experience with the response when tragedy struck on the Karratha Spirit. In this example, the employer promptly facilitated union access and this ensured that workers received appropriate support in the aftermath of the tragedy:

On 24 December 2008 there was a tragic event on board that vessel when it was trying to disengage from the wellhead while a cyclone was bearing down on the vessel. A young man, a father of two beautiful children, was tragically killed when disengaging on the bow of that vessel... Half a dozen of his colleagues were on the focsle head, the front of the ship, when that incident occurred. It was a messy, messy site. They had to carry that man's body into the accommodation. They endeavoured to resuscitate which, unfortunately, they could not. Those guys were traumatised to the max. The company, Teekay Shipping, had a union official out there that day, Christmas Eve, without any question. They engaged with us. They knew the importance of having a friendly face, an official who looked after that vessel and who knew the crew intimately, go out to that ship and comfort those crew who were in a traumatised state.[64]

2.48      The MUA explained that if employers do not facilitate access to remote locations then it is impossible to access that site – even if the MUA chartered its own helicopter. This is because 'it is physically impossible, if you could find one, to then land on a helicopter pad attached to the floating production facility without the right of entry.[65]

Concerns about facilitation of access

2.49      AMMA and a number of other employer groups expressed strong concern about the practical and cost implications of facilitating access to remote sites. AMMA advised that in many instances it will simply be too expensive and that the practical considerations are great.[66] AMMA also suggested that the proposed changes would mean that at times employers would have to specially charter aircraft for permit holders, and there would not always be accommodation available. AMMA also expressed concern about cost recovery, submitting that a single helicopter ride could cost $30 000 and accommodation is limited.[67]

2.50      The MUA submitted that these claims need to be subjected to close scrutiny. The MUA acknowledged that at times there will be 'genuine circumstances' at the site that mean that the employer is unable to facilitate access. In these cases the MUA is happy to discuss alternative arrangements with the employer to determine the most suitable time for access to be facilitated, taking into account available transport and the work program.[68] However, in many cases it is convenient for the employer to fly officers in and out on the same day. For example, divers and certain contractors are routinely flown in at 6am and flown home at 6pm.[69]

Lunch room as a default option when agreement cannot be reached

2.51      Employer groups were universal in their criticism of the proposal to specify the lunchroom as the default meeting space for unions and interested employees, when no other space can be agreed to (as the law stands, if an agreement cannot be reached then a request for review must be lodged with the Fair Work Commission). The chief reasons offered were that non-union employees should be able to have a meal break without union officials present and that the law already provides that if union officials are dissatisfied with the room available, a request for review can be lodged with the Fair Work Commission.[70]

2.52      A number of submitters provided examples where employers have made it quite difficult for permit holders to meet with employees. The committee heard that in some workplaces inappropriate rooms are provided, at times to discourage employees from participating in discussions.[71] The examples noted by the Review Panel included:

2.53      The committee also heard that union officials prefer to meet with interested workers somewhere private. For example, the MUA submitted that as union workers are usually a small proportion of workers on the rig, union officials will seek an agreed location that gives employees privacy and 'does not disturb other workers either in their meal breaks or in their recreation and down time'.[73] The committee asked if the MUA ever had to meet in lunchrooms, and was told that this does not occur as 'there is always somewhere you can go'.[74]

2.54      The Department advised that these amendments will encourage parties to agree to a location for interviews or discussions and 'should assist to reduce the incidence of conflict between occupiers and permit holders'.[75]

Expansion of the Fair Work Commission's jurisdiction

2.55      Employer groups supported the proposed change to empower the Fair Work Commission to review complaints about the frequency of union visits to a site.[76] The MUA rejected this proposed change, submitting that there may be very legitimate reasons why officials may need to visit a particular workplace frequently. Where frequency is questioned the MUA would rather 'sit down with the employer concerned and with the officials who are frequently visiting the workplace and identify what the circumstances are'.[77] During the Melbourne hearing Mr Doleman elaborated on this point:

We just do not think one size fits all. We think that there needs to be an appropriate consideration of what the need is for visitations, and if there needs to be a modification or a reduction of those visitations then so be it. Or it may well be that the employer has not been briefed well enough as to why those visitations are taking place. We think a more conciliatory approach to that element is a better way to go because, quite frankly, if an arbitrated decision is taken and that union official or officials can no longer visit that workplace, the first thing that is going to happen is that the workers in that workplace are going to be dirty on their boss or their employer for reducing the right of entry to their officials. So what you can do is agitate—and create a worse circumstance than that which may already exist. In our view, Senator, the order of the day is, let's sit down and talk about what the rationale and the reasons are for those frequencies.[78]

2.56      The Department advised that the Review Panel observed that some permit holders were visiting workplaces too often, and this was having an adverse impact on employers. The Department noted that if the bill proceeds, the Fair Work Commission would still be required to determine each case on its merits and take into account the particular circumstances of the workplace and its workers:

FWC will determine in each case, based on the particular circumstances, what is an unreasonable diversion of an occupier’s critical resources. This will ensure that FWC takes into consideration, for example, the relative size of the workplace and capacity for the employer to manage right of entry visits and mean that a permit holder’s legitimate entry rights are not restricted without due cause. In line with the Object of the right of entry part of the FW Act the provisions are designed to balance the right of permit holders to have discussions with employees in the workplace with the right of occupiers of premises and employers to go about their business without undue inconvenience.[79]

Committee view

2.57      The proposed changes to facilitate access by permit holders to remote sites are reasonable and in large part represent current arrangements between unions and employers. The proposal to establish the meal room as the default meeting place when no other place can be agreed is sensible, and will promote negotiation between parties. The expansion of the Fair Work Commission's jurisdiction will also promote discussion between parties and promote informal resolution of disagreements.

Conclusion

2.58      While offering general support, employee groups and a number of other submitters have made recommendations to expand protections for employees. In contrast, the bill has received strident criticism amongst employer groups. Having carefully considered the evidence provided, the committee is supportive of the bill. Certainly there are areas where further amendments should be made in the future, however the bill itself represents a good balance between the interests of employers and employees at this time.

2.59      The committee notes that the Minister for Workplace Relations intends to introduce further amendments to the Fair Work Act in the winter sittings. The committee trusts that these further amendments will address the areas of reform identified by employer groups as areas in need of attention.  

Recommendation 1

2.60      The committee recommends that the bill be passed.

 

Senator Gavin Marshall
Chair, Legislation

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