The Australian Labor Party (the Labor Party) has several concerns with the bill, as proposed by the government.
It was notable that these concerns were shared by numerous stakeholders. Indeed, the hearing of the committee revealed widespread opposition to the bill, as proposed, from groups as diverse as the Australian Council of Trade Unions (ACTU), to the Australian Industry Group (Ai Group), to the National Retail Association, to the Australian Chamber of Commerce and Industry. Each of these groups submitted proposed amendments, indicating the depth of concern about the bill, in its current form.
Dishonest statements by government MPs and Senators
During the committee’s hearing, it emerged that a number of government MPs and Senators had misrepresented the effect of the bill to their constituents. The problem mostly involved MPs and Senators in Central Queensland, where casualisation has been a major problem, unaddressed by the government in recent years.
For example, Liberal National Party (LNP) Senator Matt Canavan and Mr George Christensen MP, the LNP Member for Dawson, have both posted misleading claims on Facebook that they have legislated to protect casual workers and that workers can now convert to permanent employment after 12 months’ of work with the same employer.
The first claim is patently untrue, because nothing has passed the Parliament. Second, at the committee’s hearing in Melbourne, officers of the Department of Jobs and Small Business exposed Mr Christensen’s claim that workers can automatically convert to permanent employment as completely wrong. Those officers conceded that the bill only confers the right to request conversion to permanent employment, and even then, only confers that right on certain eligible casual employees.
This type of reckless behaviour is not only dishonest, it also offers casual employees false hope that their problems will be automatically solved by the passage of this bill. It will not.
Designated as a casual employee
The bill sets out a number of criteria which must be met in order for a casual employee to have the right to request conversion to permanent employment.
These criteria include a requirement that the employee be a 'designated casual'. Both the bill and the Explanatory Memorandum make clear that the decision as to whether an employee is a 'designated casual' is one for that person’s employer to make—see paragraph 3.11 of the majority report. This is a significant departure from the common law definition, which has established various indicia to determine whether an employee is properly characterised as a casual worker.
The problem created by the bill is that it effectively ousts the common law test, leaving it open to an employer to determine, unilaterally, whether a particular employee is a casual or not.
As set out in paragraph 3.13 of the majority report, the ACTU and other stakeholders also raised the concern that this new concept of 'designated casual' could spread to other provisions of the Fair Work Act, in a manner that would downgrade the rights of casual employees. Put another way, it is possible that courts and tribunals could hold that the mere decision of an employer to engage an employee as a casual was decisive, notwithstanding the fact that an employee otherwise met the common law test to be considered a permanent employee. The ACTU pointed out that there have been other occasions when courts and tribunals have used terms defined in legislation to interpret other terms, for which that definition was not intended. For this reason, there remains a significant risk that the bill’s new concept of 'designated casual' could be applied more broadly to inappropriately characterise employees as casual workers.
Legal officers from the Department of Jobs and Small Business advised the committee that this problem had been overcome by 'ring fencing' the concept of 'designated casual' to the right to request conversion. It is of concern, however, that this 'ring fencing' is only set out in the Explanatory Memorandum, rather than the bill itself. This approach provides little confidence to the Labor Party that this so-called 'ring fencing' provides the appropriate safeguards in the bill.
It is evident in the submissions provided by Professor Andrew Stewart, as well as representatives from employer groups and unions, that a preferred solution to the so-called 'ring fencing' of a worker who is designated as a casual employee, for other NES purposes or the Fair Work Act, is to legislatively deal with the definition of what is a casual employee. In fact, the committee’s inquiry has merely highlighted the reality that this government does not wish to effectively address known problems with how casual workers are defined through common law. Professor Stewart’s concerns are more fully set out in paragraph 3.12 of the majority report.
The government has failed to take the opportunity in this bill to fix the real problem of employees being inappropriately characterised as casuals in Australian workplaces.
In contrast, the Labor Party has committed to work with unions and employer groups to develop and legislate an objective definition of casual. This will remove the uncertainty that has been created by leaving it to courts and tribunals to determine whether a worker is considered casual or not.
Interaction with enterprise agreements
As the majority report mentions, a number of submitters agreed that this bill will negatively interact with existing agreements that contain casual conversion provisions.
Professor Stewart, referenced in paragraph 3.34 of the majority report, highlighted that the Explanatory Memorandum did not provide any guidance on how comparisons of whether a term was ‘the same, or substantially the same’, or ‘more beneficial on an overall basis’ were to be made.
The ACTU shared the concerns of Professor Stewart, at paragraph 3.42 of the majority report, and suggested that the relevant test be that enterprise agreements contain a conversion clause that is ‘no less beneficial’ on an overall basis to those employees.
Further, the Ai Group, at paragraphs 3.35 and 3.36 of the majority report, said that the bill fails to adequately account for circumstances where an enterprise agreement applies to employees who are covered by more than one modern award.
On the basis that employer groups, unions and Professor Stewart agree that this section of the bill creates a high degree of uncertainty with casual conversion provisions in existing enterprise agreements, it is clear that a thorough revisit and re-drafting is required in order to alleviate these valid concerns.
Conclusion
For the reasons outlined above, Labor shares the view of representatives of both employees and employers that there are significant problems with the bill as drafted, and that the bill should not be passed in its current form.
Senator Gavin Marshall
Deputy Chair
Senator Murray Watt
Participating member