Tabled 29 November 2022
These Coalition Senators’ additional comments are in relation to the fifth public hearing by the committee into the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 held on Tuesday 22 November 2022.
Coalition Senators note it is unusual to provide additional comments as a supplementary to a dissenting report. However, as highlighted in the dissenting report, this inquiry has been deliberately held in a rushed and limited timeframe, and therefore it was unsurprising that a fifth hearing was agreed to on the day the inquiry was to report. This meant there was virtually no time to include observations from that hearing, given the unavailability of a Hansard proof transcript until the following day.
Representatives from the Department of Employment and Workplace Relations (“the Department”) and the Fair Work Commission appeared at the hearing. Coalition Senators acknowledge the Chair’s cooperation in holding this fifth hearing, despite it being on the same day the inquiry was to report.
Coalition Senators note the “Office of Best Practice Regulation has criticised the Department for not providing evidence that the regulatory costs and their assumptions have been tested with stakeholders.”
Coalition Senators note the assumptions which the Department of Employment and Workplace Relations estimate that the cost of multi-employer bargaining for individual business are:
When pressed by Coalition Senators, department representatives acknowledged they had spoken to peak employer representatives but could not confirm they had consulted individual small businesses, which this bill will have a heavy-handed impact on.
In addition, when asked if it had undertaken a survey of small businesses, the Department indicated it had not:
Senator Cash: …but you have surveyed small businesses about the impact of this cost on them – the actual cost?
Ms Anderson: We haven’t undertaken a survey.
Nor was it apparent the Department would be contacting small businesses via electronic means in the future to inform them about the impacts of the new costs from this bill. Instead, the Department said, “we have provided $7.9 million over the forward estimates to the Fair work Commission to support small businesses in the event that they do wish to engage with bargaining.”
Disconcertingly, during questioning from Coalition Senators it was revealed that during the Regulatory Impact Statement (RIS) process, the Department had obtained the quote of $175 – the cost of the service fee for using a bargaining consultant - from the website www.authentic.com.au.
Senator Cash: …Is it true that the department actually got this figure from the website – and I’m happy to hand out, share or table the website for the committee – www.authentic.com.au, ‘How much should I charge as a consultant’?
Ms Anderson: I’m personally not aware of that website. I’d have to take that on notice.
Senator Cash: It is referred to in your regulatory impact statement. So which member of the department googled ‘how much should I charge as a consultant’?
Ms Anderson: I’d have to take that on notice.
Senator Cash: It’s in your regulatory impact statement. You don’t know whether or not you’ve actually gone out and asked bargaining consultants what their estimated cost per hour is...
Unbelievably, the Department used the amount of $175 per hour without seemingly making inquiries with www.authentic.com.au on how they had calculated that service fee in the first place. Even more astonishing is they used them at all, a point the government later conceded during Question Time on 23 November 2022, when it said, “... the departmental spokesperson has gone on to say that it was incorrect to use the link as being the only source referenced in that section of the RIS.”
Coalition Senators note the Department figure of 4.6 hours per day per employer spent by staff on bargaining - which equates to approximately 23 hours per week - was not raised with small businesses stakeholders during consultation.
Coalition Senators note the Fair Work Commission has confirmed the new funding the government has allocated will provide the tribunal with eight new members which would include one deputy president and seven commissioners.
Coalition Senators are concerned the Albanese Government will use the opportunity of appointing new commissioners to simply stack it with their union mates to achieve the workplace outcomes it desires. Given the qualifications and skills necessary to hold this position, outlined in section 627 of the Fair Work Act as being a person that “has knowledge of, or experience in, one or more of the following fields workplace relations, law, business, industry or commerce,” it is not too difficult to imagine that former union officials will navigate their way towards a new career pathway on the tribunal, especially because “appointments to the commission are a matter for government.”
Regarding the information, including confidential commercial data, small businesses will need to disclose to unions or other employers when conducting bargaining negotiations, Coalition Senators are not satisfied the only safeguard is simply “the commission will take into account the concerns of the parties, and whether it's in the public interest for those parties to bargain together or not.”
Coalition Senators note the Office of Best Practice Regulation describes the government regulatory impact statement on bargaining changes as “adequate”. Extraordinarily, it states that it could not be assessed as “good practice” because pieces of key analysis and evidence had not been undertaken or provided and tested with stakeholders.
Coalition Senators note the Department confirmed during the hearing “work in the industry of civil construction and work in the industry of metal and engineering construction are not excluded from multi-employer bargaining.” Thus, the exclusions only pertain to “general building and construction work.” Coalition Senators contend given the well-publicised form of some unions in this industry, and the general overall harm they have caused the industry, the provision in the bill should apply industry wide and not just to particular niches of it.
Coalition Senators note on the same day as the hearing, ironically Reserve Bank Governor Philip Lowe was reported to have said:
If we all buy into the idea that wages have to go up to compensate people for inflation it will be painful, so best avoid that. The issue that many central banks have been worried about – and I include us in this – is this period of high inflation leads the workforce to say: 'Well, inflation's high — I need full compensation for that',". If that were to happen, what do you think inflation would be at next year? Seven per cent, plus or minus (a bit). And then we've got to get compensated for that? Seven per cent… and this is what happened in the '70s and '80s. It turned out to be a disaster.
Coalition Senators believe small and medium businesses will pay the price for the Albanese Government’s extreme industrial relations changes. The government has admitted small business will pay an average of $14,600 in bargaining costs with medium businesses expected to pay more than $80,000. It is simply unacceptable the Albanese government is crushing our small business sector with more financial burden and red tape.
Recommendation
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 is not passed by the Senate.
The Albanese Government apologise to the Australian small business sector for saddling it with $14,600 in additional bargaining costs, and for imposing more red tape and regulation, including allowing unions to interfere with this important sector.
Senator Hon Michaelia Cash
Deputy Leader of the Opposition in the Senate
Senator for Western Australia
Senator Matt O'Sullivan
Deputy Chair
Senator for Western Australia
Senator Kerrynne Liddle
Committee Member
Senator for South Australia