Greens' pay protection bill knocked back

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Greens' pay protection bill knocked back

A bill that would, if passed, effectively render the enterprise agreement system redundant has suffered a defeat in a Senate committee.

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A bill that would, if passed, effectively render the enterprise agreement system redundant has suffered a defeat in a Senate committee.

Senator Lee Rhiannon’s Fair Work Amendment (Pay Protection) Bill 2017 would, if passed, require employers to pay a base rate of pay, full rate of pay and any casual loading under an enterprise agreement at the same rate as the relevant award or national minimum wage order.

The bill would also have retrospective effect in that any future Act would also apply to any enterprise agreements made before the Act came into force.

Relentless attack on wages


“The attack on the wages of our lowest paid people in this country is relentless,” Senator Rhiannon told the House of Representatives when introducing the bill to Parliament.

“The people who collect our trolleys at Coles and Woolworths, and those who flip our burgers at Hungry Jack's or McDonald's or who fry the chicken at KFC are getting paid less than the legal minimum. They certainly have been for a number of years, and this needs to be fixed.

“There is a loophole in the Fair Work Act 2009 that says if you are on an enterprise agreement you cannot be paid less than the legal minimum in the award, but that provision only applies to your nine-to-five working hours on Monday to Friday.

"The protection does not apply to people who work on weekends or at nights and, as a result, hundreds of thousands of workers – mostly young workers – are getting paid very low wages and have been underpaid by these very large corporations over many years because of substandard deals that have been approved by the Fair Work Commission.

“On one estimate today these young people are being underpaid one million dollars a day.

“It comes down to a fundamental point, one that I think everyone here should be able to agree with: an 18-year-old working nights at McDonald's should not be getting paid less than the legal minimum wage set out in the award. Otherwise, what are awards for? Why do we have federal legislation setting out minimum wages and conditions if someone is able to undercut it?”

Major problems


The Senate committee identified a number of concerns with the bill. If passed it would fundamentally change the nature of the modern award system from being a set of minimum conditions into being a replacement for enterprise bargaining.

The Australian Chamber of Commerce & Industry commented that the bill would: “have the practical effect of requiring an employer to entrench award conditions in bargaining, constraining innovative approaches to bargaining and preventing employees from enjoying non-monetary benefits of value to them in exchange for award conditions that may be of lesser relevance and value to them”.

Some employer groups, such as the National Retail Association, submitted that the employees of their members fare better under their enterprise agreement than they would under a relevant modern award because agreements provide flexibility. They added that a system that sets pay levels, particularly penalty rates on weekends and public holidays, would force many businesses to reconsider their options on such days.

“This was a recurring theme in our survey responses: that employees are likely to receive significantly less hours and therefore less take-home pay, due to the business closing on weekends and public holidays, or business owners needing to work to reduce overheads,” the National Retail Association said.

Retroactive: detrimental and unjust


Finally, there was also “serious concern” expressed at the possibility of the proposed bill applying retrospectively, which would cause workers to lose many of their previously negotiated benefits.

The Department of Employment explained: “the bill specifies that the amendments proposed in the bill would apply to enterprise agreements made before, on, or after, the day that the legislation comes in. So, if this bill came in and it said it was going to start on 1 October, it would apply to enterprise agreements made before that day.

"When we analysed it, we thought that meant the amendments would apply to existing agreements, so people who have negotiated agreements lawfully under the framework that existed at the time would potentially lose conditions negotiated in their agreement”.

Meanwhile, the Queensland Law Society warned against introducing retrospective rights or liabilities on the basis that it may create unjust or unforeseeable outcomes.

Better off with BOOT


The Senate committee also noted that enterprise agreements are already subject to a “better off overall test” i.e. the Fair Work Commission must be satisfied that each actual and prospective employee would be better off overall under an enterprise agreement than under the modern award.

The committee said that BOOT allows the parties to negotiate terms and conditions suited to their particular needs and preferences.

The committee also noted that by having a substantially raised “floor” to underpin bargaining, both employers’ and employees’ abilities to tailor and secure desirable agreements would be reduced.

Conclusion


The Senate committee had three Liberal-National members, two Labor Party members and one Australian-Greens member. Senators from both the Liberal Party and the Labor Party broadly agreed that the bill should not proceed. The Greens dissented.

Further reading

The Fair Work Amendment (Pay Protection) Bill 2017

Senate inquiry into the Fair Work Amendment (Pay Protection) Bill 2017

Disclosure: the Australian Chamber of Commerce & Industry and WorkplaceInfo.com.au are related entities via the NSW Business Chamber.

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