Chapter 6 - Labor Senators' View
6.1 Labor Senators do not support the removal of superannuation from
the list of allowable award matters. Such a removal is not just to the
disadvantage of employees but also to employers.
6.2 The Prime Minister, Mr Howard, gave a 'rock solid' guarantee to employees
prior to the last election that 'not one Australian worker would be worse
off' as a result of the Coalition's industrial relations policy. This
promise will be broken as a result of this Bill.
6.3 Superannuation belongs to employees, it is part of their retirement
income, and the employees' interests must always be paramount. Any changes
to the system must ensure that returns are maximised, costs minimised
and protection enhanced.
6.4 Not only is the "rock solid" guarantee of the Prime Minister,
Mr Howard, yet again being broken, it is clear that this legislation fails
to meet the standard set by the Australian Democrats in their letter of
agreement as part of the negotiated settlement to allow the passage of
the Workplace Relations Act in 1996 when they set a benchmark that
the legislation 'must ensure their workers are not made worse off as a
result of any overriding or repeal of superannuation clauses'.
6.5 This bill clearly fails to meet the undertakings given by the Coalition
government in a number of ways including;
- loss of entitlements - many persons who currently receive superannuation
under award entitlements will lose;
- frequency of payments - employers will move to less frequent
payments of contributions;
- dispute resolution - the bill removes the AIRC's power to arbitrate
in disputes;
- inconsistency between federal and state industrial jurisdictions;
and
- timing of implementation - conflicts with new dates for 'choice'.
Loss of entitlements
6.6 Loss of entitlements will clearly result. Many awards set a variety
of minimum standards below that provided for in SG legislation. These
standards in industries such as hospitality and retail were negotiated
to suit the particular circumstances of the industry and workplace. Removal
of these lower minima will exclude hundreds of thousands of workers from
superannuation and associated insurance coverage. Whilst many of the payments
are small, they have assumed greater significance with the increase in
the SG from 3 per cent to currently 6 per cent and 9 per cent by the year
2001/2002. In addition, employee balances are now protected and cannot
be eroded by fees and charges.
6.7 It is clear that high minimum cut-offs for superannuation payment
will provide an opportunity for some unscrupulous employers to manipulate
the hours of work of employees to avoid paying superannuation at all.
Alarmingly, this has recently been admitted publicly by a representative
of a hospitality industry employer group, Restaurant and Catering Australia.
[1]
Frequency of payments
6.8 Less frequent payments, from monthly to half yearly or yearly, clearly
reduces the end benefit to employees between 3.5 per cent to 4 per cent.
This is well illustrated in the table in Appendix D. In addition, less
frequent payments will cause insurance cover to lapse, removing a significant
benefit from many employees.
Dispute resolution
6.9 The AIRC has been an effective, timely and knowledgable arbiter of
disputes. No witness could provide a mechanism for settling disputes other
than bland assertions that the 'culture of the workplace has changed',
in other words, all is peace and harmony. Labor Senators are sceptical
that this is the case. Disputes will arise, particularly given the increasing
SG contributions and balances in accounts. Employees and employers are
entitled to know who will arbitrate when circumstances require it.
Inconsistencies between federal and state industrial jurisdictions
6.10 It is incredible that the Minister for Workplace Relations and Small
Business can assert that this bill allows the superannuation system to
be simplified when in fact a further layer of complexity and confusion
will result due to differing federal and state industrial legislation.
More complexity and confusion to create simplified administration! There
will be great confusion amongst employees and employers where workforces
at the one workplace are covered by state and federal awards - a not uncommon
situation.
6.11 Furthermore, as employees change employment from one employer to
another and consequently move between state and federal industrial awards,
the differing legislative requirements will greatly confuse employees
and add to the costs of superannuation.
6.12 Hundreds and thousands of employees have two or more jobs. Many
of these employees will have superannuation provisions in both federal
and state jurisdictions at the same time. The potential for confusion
and chaos is considerable.
6.13 Assurances from the Government about administrative simplicity when
the evidence is to the contrary and set against the confusion, chaos and
complexity that has resulted from changes in other areas of superannuation
such as the tax-surcharge debacle do not assist in building confidence
in our retirement system.
Timing of legislation
6.14 It is clearly ridiculous that different operative dates apply to
this legislation from that relating to 'choice of fund'.
Recommendation
The bill is neither in the best interests of employees nor employers
and should be rejected.
(signed)
Senator Nick Sherry, Deputy Chairman
Senator Steve Conroy
Senator Chris Evans
Footnotes
[1] Financial Review, 5 May 1998, p. 36.
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