COALITION SENATORS' DISSENTING REPORT
Introduction
1.1
Faced with convincing evidence of endemic and inappropriate conduct in
workplaces in a specific industry, Coalition Senators are willing to consider
industry-specific legislation to address that inappropriate conduct. It was on
this basis that the Coalition maintained protections for outworkers in the
textile, clothing and footwear industry in the various iterations of workplace
relations legislation between 1996 and 2007. It was on this same basis that
the Coalition implemented workplace legislation specific to the building and
construction industry.
1.2
We note that there continues to be specific provisions in the Fair Work
Act to protect outworkers, as well as varying equivalent provisions in state
and territory legislation.
Inquiry processes
1.3
This inquiry has not been assisted by the fact that a key stakeholder
and representative body – the Council of Textile & Fashion Industries of
Australia – was refused permission to appear at the Committee's public hearing.
Evidence
1.4
The majority report suggests that the Committee was ‘struck’ by comments
made in 1987 by a Deputy President of the Australian Conciliation and
Arbitration Commission. Coalition Senators consider this suggestion is
disingenuous given that these comments were made 25 years ago.
1.5
The Government's justification for this Bill in 2011, as proposed by
then Minister Chris Evans[1]
was based on a reference to a 2007 report by the Brotherhood of St Lawrence and
a 1996 Senate Economics References Committee inquiry.
1.6
Coalition Senators note that both reports had been completed prior to
the passage of the Fair Work Bill. If these reports constitute such a strong
case for this proposed Bill, then why has the Government waited until now to
act? Why didn’t the Government address those concerns as soon as it had the
first legislative opportunity to do so, namely the introduction and subsequent
passage of the Fair Work Act?
1.7
Coalition Senators note concerns expressed by industry participants
throughout the TCF supply chain in relation to the proposed Bill:
1.8
The Australian Chamber of Commerce and Industry in its submission
expressed concern about the evidence supporting this legislation:
Apart from references in the Minister’s second reading speech
to a November 2011 Channel 9 story in a Melbourne TCF "sweatshop" and
a July 2011 Sunday Herald Sun report on "sweatshops and outworkers
producing school uniforms for Victorian families for as little as $7 an
hour", there are no examples provided in the extraneous materials as to
the precise deficiencies of the existing legal framework, what recommendations
these proposals are based on (such as from the Productivity Commission or a
dedicated independent inquiry by the Federal Government) and how the proposed
measures will reduce possible exploitation of workers in the TCF industry.[2]
1.9
The Council of Textile and Fashion Industries of Australia expressed
similar concern:
The arguments for introducing the legislation are based on
research conducted nearly 5 years ago, not current evidence, and fail to
acknowledge the gains made in the 10 years of existing legislation and the 4
years of investment by the Federal Government in Ethical Clothing Australia.[3]
1.10
Indeed, the then Minister for Education, Employment and Workplace Relations,
and now Prime Minister Julia Gillard, said at the time 'I believe the Fair Work
system is right...We worked hard to get the balance right and I believe the
Fair Work Act is right.'[4]
1.11
If there is such a strong case for change, clearly the balance was not
right and Ms Gillard's comments were not accurate.
1.12
Coalition Senators received advice from textile suppliers expressing
concern at the loss of business and jobs if garment construction continues to
disappear offshore and textiles and accessories are sourced in the locations
where the work is undertaken.
1.13
Coalition Senators suspect that the Government's motivation for this
amendment is more about appeasing the trade union movement in the lead-up to
the next federal election. In any event, Coalition Senators note that a review
of the Fair Work Act is currently underway. The provisions of this Bill should
only be considered as part of that review, and along with any other changes
proposed in any final and publicly available report resulting from that review.
Recommendation 1
1.14
Coalition senators recommend that this bill not be considered by the
Senate before the release of the final report of the 2012 Review of the Fair
Work Act.
Scope and status of workers
1.15
Coalition Senators are concerned by evidence that the definition of
'outworker' and 'TCF work' in this Bill will have far broader reach than
current provisions, to cover many more workers, including designers with
university degrees.
1.16
The Council of Textile and Fashion Industries of Australia have made
this point in their submission:
Because of the broad definitions of an ‘outworker’ and ‘TCF
work’ those that are not vulnerable i.e. those with qualifications, knowledge
and skills are also treated in the same way. For example a designer with a
University degree wanting to set up a home based business would be treated the
same as a person with poor English language skills and little knowledge of the
Australian legal system.[5]
1.17
Coalition Senators are concerned that genuine independent contractors or
others, such as those in the TFIA’s example, could be unjustifiably covered and
disadvantaged by this Bill.
1.18
Coalition Senators have received representation from many young and
upcoming designers concerned about this Bill. The following communication is
from just one student who wrote to Coalition Senators:
I am an emerging Australian Fashion Designer starting a label
from home. I would like to draw your attention to the Fair Work Act and the
Textile, Clothing, Footwear and Associated Industries 2010 (the TCFAI Award)
Modern Award regime which defines me as an outworker, despite my 4 year degree
in fashion from Ultimo TAFE. The current TCFAI Modern Award definition has a”
catch all” definition where anyone working from home in the fashion industry is
an OUTWORKER ...yes, I can be considered an OUTWORKER if I sell to a boutique or
department store, because of the deeming provisions of the award.
Most graduating & emerging Australian Fashion Designers
starting out, establish a trading relationship with a fashion boutiques on
“indent”. In the eyes of the law, MA000017- Schedule F that would mean
boutique owners are required to pay me as an employee, including all benefits
and entitlements under the National Employment Standards and unfair dismissal
laws. This is unfair and an unworkable regime that disadvantages me and other
graduating & emerging Australian Fashion Designers, and is making it very
difficult starting up a new business, as no boutique owner will agree to employ
me, and I don’t want to be employed by them either.
Beyond that as a fashion student/designer, if I hand out work
to a “maker/outworker” to sample a design I am obligated by law to employ them
with full benefits and entitlements, and that is against the law for me to
employ them casually. Further I am aware that in the final form of the Fair
Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011 (the Bill)
currently before parliament, deems all outworkers to be employees for most
purposes of the Fair Work Act 2009 (Clth) (the FW Act) including the National
Employment Standards, Superannuation and unfair dismissal laws. As a start-up
business, in the beginning it will be challenging to pay myself, never mind
employ a ‘maker/outworker’ on a regular basis, and pay all these entitlements.
Again this is unworkable and in trading in such an environment, I face
prosecution in breach of the TCFAI Modern Award 2010. The risks are too great.
I would like you and your government to consider this letter
and make the necessary changes to allow me and other graduating & emerging
Australian Fashion Designers making samples and small orders (with business
turning over less than $100,000 per year) to apply for exemption to this
onerous and impractical regime, as part of the Modern Awards Review 2012.
Recommendation 2
1.19
Coalition senators recommend that the Bill be amended to ensure that
genuine independent contractors – those who have traditionally worked as
independent contractors – are neither covered by, nor disadvantaged as a result
of this legislation.
1.20
The Fair Work Act allows for Individual Flexibility Arrangements (IFA)
to be made which 'meet the genuine needs of the employee and employer'[6],
subject to complying with certain requirements. These include that the
employee must be better off overall under the IFA.
1.21
This Bill appears to deny access to IFAs for outworkers, whether they be
in the TCF industry or not as 'the flexibility term must not allow the effect
of those outworker terms to be varied'.
1.22
This is also despite the ‘better off overall test’ which ensures that
IFAs cannot undercut outworker terms.
1.23
The TFIA points out in its submission:
On its face, therefore, employees may be able to benefit from
individual flexibility terms that would be denied to outworkers even though TCF
contract outworkers are treated as employees in the new Part 6–4A, which
extends the operation of most provisions of the FWA (including sections 202 and
203) to contract outworkers in the TCF industry.
If this proves to be the case, the intention to provide
“nationally consistent rights...for those outworkers, regardless of whether
they are employees or contractors” (see paragraph 44 of the Explanatory
Memorandum) may not be achieved.[7]
1.24
Coalition Senators are concerned that this could leave many workers
worse off, absent any need or justification for coverage by the Bill.
Recommendation 3
1.25
Coalition senators recommend that the Bill be amended to incorporate the
‘No disadvantage Test’ and ensure that no worker will be worse off as a result
of its implementation.
The State Systems
1.26
This Bill will replicate in the Fair Work Act many provisions in current
state and territory legislation as well as the relevant Federal Modern Award.
1.27
This is despite the absence of adequate evidence as to whether these
protections have worked at a state or territory level, or in the relevant
modern award. Coalition Senators have yet to see any evidence that showed these
provisions worked where they have been in place for some time.
1.28
It defies good policy sense for the government at a federal level to, in
effect, harmonise these laws in the absence of proof that they have delivered
results at a state and/or territory level.
1.29
There is a confusing message. It is asserted that problems still exist
in the textile, clothing and footwear industry, despite already having very
similar protections in various states and territories. How replicating these
provisions which are apparently ineffective will assist has not been adequately
explained.
Conclusion
1.30
The Coalition in Government recognised the need for additional
protections in the TCF industry and provided additional protections and
safeguards – including additional powers to the union movement. At the same
time, the Coalition also recognised the need for protections in the building
and construction sector leading to the establishment of the Australian Building
and Construction Commission.
1.31
At present, one of the core arguments of the Government in abolishing
the ABCC is that it discriminates against certain workers and that the
industrial relations regime should take a 'one size fits all' approach. This
Bill clearly defies Labor's view in relation to the ABCC.
1.32
The Government has failed to identify and present sufficient evidence
and justification let alone consistency for this Bill. Without that, this Bill
should not be passed.
Recommendation 4
1.33
Coalition senators recommend that notwithstanding earlier
recommendations, this Bill should be opposed until adequate evidence and
justification is presented by the Government.
Senator Chris Back Senator
the Hon Eric Abetz
Deputy Chair
Senator Bridget McKenzie Senator
Sue Boyce
Senator Mary Jo Fisher
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