Reference
1.1
On 30 March 2017 the Senate referred the Fair Work Amendment (Pay Protection) Bill 2017 (the bill) to the Senate Education and Employment Legislation Committee (the committee) for inquiry and report by 15 June 2017. The Senate subsequently granted an extension of time for reporting until 6 September 2017.
Conduct of the inquiry
1.2
Details of the inquiry were made available on the committee's website. The committee also contacted a number of organisations inviting submissions to the inquiry. Submissions were received from six individuals and organisations, as detailed in Appendix 1.
1.3
A public hearing was held in Melbourne on 25 August 2017. The witness list for the hearing is detailed in Appendix 2.
1.4
The committee conducted its inquiry alongside an inquiry into penalty rates conducted by the Senate Education and Employment References Committee. Given the closely-related nature of the two inquiries, the two committees agreed to share evidence across the two inquiries. It should be noted that this report therefore also cites submissions made to, and evidence given at a public hearing held by the Education and Employment References Committee on 24 August 2017.
1.5
While the bill before the committee does not delve specifically into the issue of penalty rates, the bill was introduced in the context of the Fair Work Commission's (FWC) recent decision to reduce penalty rate provisions across a number of awards in the hospitality, retail, pharmacy and fast food industries.
Overview
1.6
The bill aims to amend the Fair Work Act 2009 (FWA, the Act) relating to enterprise agreements. The most significant changes are proposed by items 6 and 7 of schedule 1. If passed, item 6 would amend subsection 206(1) of the FWA to require that a base rate of pay payable under an enterprise agreement be not lower than the 'full rate of pay', including allowances, penalties and loadings. The definition of 'full rate of pay' can be found at section 18 of the FWA:
(1) The full rate of pay of a national system employee is the rate of pay payable to the employee, including all the following:
(a) incentive-based payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) any other separately identifiable amounts.
1.7
This amendment would extend current protections, purportedly to ensure that the full rate of pay under an agreement is not lower than the relevant modern award.
1.8
Item 7 also aims to extend existing protections. Where base rates of pay and casual loadings are set out in enterprise agreements, the proposed legislation would require these to be equal to or greater than the national minimum wage.
1.9
Item 10 also seeks a significant change with far-reaching consequences. It proposes a new subsection 30(1), stating that amendments proposed by the bill would apply to enterprise agreements made before, on or after the day of commencement.
Human rights implications
1.10
The explanatory memorandum states that the bill does not engage any applicable rights or freedoms and is compatible with human rights and freedoms recognised in relevant international instruments.
1.11
The bill was considered by the Parliamentary Joint Committee on Human Rights and found not to raise human rights concerns.
Scrutiny of Bills Committee
1.12
The Scrutiny of Bills Committee noted that it was unclear how proposed measures relating to the application of the bill would interact, and whether the changes would be retrospective:
The committee therefore requests the Senator's advice as to whether it is intended that the amendments apply to enterprise agreements made before commencement of the relevant provisions of the bill, and if so, why this is necessary and whether this would have any detrimental impact on any person.
Pending the Senator's reply, the committee draws Senators' attention to the provision, as it may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the committee's terms of reference.
1.13
The committee notes the views of the Scrutiny of Bills Committee.
Acknowledgement
1.14
The committee thanks those individuals and organisations who contributed to this inquiry by preparing written submissions and giving evidence at the public hearing.
Notes on references
1.15
References to the Hansard transcript in this report are to the Proof Hansard. Please note that page numbers may vary between the proof and official transcripts.