2 AUGUST 2012
SUBJECTS: Release of Fair Work Act Review
BILL SHORTEN: Good afternoon everyone. Thanks for coming. Apologies for running a few minutes late.
As you know on behalf of the Gillard Government, today I’m releasing the independent review of the Fair Work Act which is about two and a half years in existence, the Act.
I’d first of all like to put on record my thanks and gratitude for the work of the three independent members who have committed themselves to this task with a lot of effort.
I believe it is right to summarise the review panel’s recommendations and report as good news about the Fair Work Act. Ladies and gentlemen, the review concludes that the Act is accomplishing its objectives.
Now we know that the Fair Work legislation came about from extensive policy work; endorsement at two federal elections and extensive consultation with businesses, employees and unions.
Indeed the panel noted that the consultation undertaken in formulating and drafting the legislation was unprecedented in the Australian experience.
Now we’ve had an independent panel conduct a post-implementation review which shows that all of that hard work and transparency has paid off.
I’m heartened that the core conclusions of the panel, is that our Fair Work laws are working well and as intended.
The report is also constructive. The independent panel have identified a number of suggestions for Government to consider in order to improve the operation of the legislation.
We shall now talk, as we do, with industry, employees and their representative, about these suggestions of the panel, directly. That is what pragmatic democracy is all about. It’s about listening to people carefully before arriving at considered decisions.
But right from the outset, nobody should be in any doubt, that the review does not recommend sweeping changes and that the independent advice is that the substance of the laws introduced by Labor two and a half years ago are operating as intended.
I believe that the review has determined that our Fair Work Act has struck a good balance, in that it delivers for both employees and employers. I’m pleased, for example, that they found this has being achieved without hurting competitiveness, without increasing industrial action or prompting excessive cost increases.
The review has also found the Act has not had a negative impact on productivity. I’m particularly pleased by this finding and I remain optimistic that it will be acknowledged and widely reported in the business papers.
Right from the outset, the review’s terms of reference, explicitly asked the panel to check whether the laws were operating as intended. And of course one of the specific objects of the Act is to support the Australian economy and improve productivity whilst delivering fairness.
As some of you will be aware, I have in recent months been consistently and persistently emphasising that workplace productivity improvements are primarily found within enterprises at the enterprise level; through collaboration and cooperation; through high-skilled, high-performance and well-remunerated workplaces and, of course, workplace engagement.
And I’ve certainly had the view that for some people in our society who simply assert that all the challenges of productivity can simply be wished away by changing external regulation, this fails to grasp where the intrinsic benefits and the greatest gains of productivity can be found, that is, at the enterprise level.
So I do regard the review’s conclusions as good news. That we, as a nation, are heading in the right direction in Australian workplaces.
I also believe it’s important to recognise that the independent panel has rejected any need for the reintroduction or re-emergence of not just Work Choices, but of the underlying principles which drove the particular legislative aberration which was Work Choice law.
In fact, the panel has noted that the Work Choice laws of the Opposition when they were in government were an anomaly in what has otherwise been a fairly linear progression of improvement in workplace relations over the past 20 years.
The panel certainly does not recommend the reintroduction of statutory individual contracts, nor limits to unfair dismissal, nor cutting penalty rates or allowing rostering that’s all about the disregarding of the interests of people in the workplace – the families in the workplace.
In terms of what happens next, we shall consult on the recommendations and we’ll make sure that we do it properly so that all voices are heard, as they have been during the review, but also in formulating a response to the review.
I now have some experience of the value of negotiations and listening to all points of view, because no one point of view in Australian politics ever has a complete monopoly on the truth.
But these detailed discussions for legislative changes will be necessary to make sure that we don’t re-litigate the submissions which have been put forward, but rather we debate the possible consequences or otherwise of recommendations made by the Fair Work Act review panel.
The review did receive over 250 submissions. And I think as well as the detailed work done by the review, I think today’s release of the review findings increases pressure upon the Opposition to explain what their views will be in terms of workplace relations policy. What do they intend for workplace relations reform? What are their plans about statutory contracts? What are their plans for taking away people’s unfair dismissal rights? What are their plans to protect family-friendly conditions of work? What are their plans to dismantle penalty rates? What are their plans to protect people’s rosters?
The Government has made it clear that we are not up for changes which see Australians go backwards. We never have been and we never will be. And indeed, as the review panellists make it clear in their extensive report, there is simply no need for this.
At this stage, what the Government stands for is clear. What the Opposition stands for on workplace relations is a secret.
Generalities around using words such as cautious and careful cannot mask forever the lack of detail. And it’s the detail about people’s rosters, it’s the details about people’s entitlements, it’s the details about people’s conditions of work which are important to Australians.
This report, I believe, triggers again the need for the Opposition to engage in an honest and transparent and public debate about their vision for the workplace.
But in conclusion, I would simply submit that the panel has said that economic issues had to rate highly in their assessment and they did conclude – they said after considering the economic aspects of the Fair Work Act, the panel concludes that since the Fair Work Act came into force, important outcomes such as wages growth, industrial disputation, the responsiveness of wages to supply and demand, the rate of employment growth and the flexibility of work patterns have been favourable to Australia’s continuing prosperity.
I’m pleased to take questions.
BILL SHORTEN: We will consult on the review. We’ll talk to stakeholders. I’ve already been hitting the phones this morning to tee up meetings. We want to make it clear that we will meet with the state ministers to talk about these matters in mid-August, we want to give them time to digest the review.
So at this stage I’m not ruling in, ruling out anything specific, but I would draw you back to what I said earlier: we’re not in the game of reducing people’s conditions through regulation.
BILL SHORTEN: I think Fair Work Australia – in terms of its conciliation roles, in terms of its roles to contribute to productivity, in terms of a lot of the functions it does are important. In terms of the specific measures proposed, we will take them on notice and we will consult with stakeholders.
We’ve got a good report here. The main thrust of the report is very clear: the Fair Work Act is delivering on its objectives. Productivity, in fact, in the last 12 months has been climbing. That is a fact. And as much as some conservative commentators want to dispute the data, the data is the data and it makes it clear there is growth in productivity.
In terms of Fair Work Australia’s contribution, we’ve got some good specific recommendations. Some are not controversial. Hopefully with some of the less controversial matters, if stakeholders are so minded we can move on that fairly quickly.
JOURNALIST: What about the increased scope to arbitrate ...(inaudible).
BILL SHORTEN: There was certainly some recognition in the report from some in the employer ranks in particular, and some indeed in the union ranks as well, seeking increases in access to arbitration in the area of Greenfield agreements. Also union submissions...
BILL SHORTEN: In terms of Greenfields arbitration the report’s made some recommendations which we’re going to take on board.
In terms of the Qantas dispute, it’s a matter of record I believe that that matter could have been handled differently from the way it was. But I don’t want to re-litigate past disputes, however.
In terms of intractable disputes, though, certainly the unions have made submissions and we’ll be consulting on these matters.
JOURNALIST: in the formal process like, you had a committee for legislation and the development...will be there be a similar formal grouping?
BILL SHORTEN: We’ve had a good process with 250 submissions to get this information in the Towards More Productive and Equitable Workplaces report. I’m not sure that I need to create a second process to track down the first process.
What I do think though, and what I fundamentally commit to is to consult with all stakeholders, and I am being very specific about consulting with our states and territories.
JOURNALIST: What’s the timeframe?
BILL SHORTEN: Well if legislative changes are required it’d be good to get them in the Spring session this year. On the other hand I’ve got to talk to people. It may well be that consensus emerges on some of the technical suggestions which are made. Some of the proposals may well be more controversial.
As an operating style I’d prefer to achieve consensus – it may well be we have to do matters in two lots. In other words – things that people agree with, let’s get that train away from the station. Matters where there is more debate and achieving consensus is more difficult initially, well then we keep working away at that, don’t we? Because we owe it to Australian workplaces and people to try and achieve, identify what we agree on.
There’s too much negativity in the workplace relations debate. A lot of what happens in workplace relations isn’t affected by this debate about industrial disputes. I think there’s a lot of good stories and a lot of good news happening in Australian workplaces. There’s a lot of focus on leadership, on creating value, collective bargaining, delivering outcomes of productivity and of better creating wealth and sharing wealth.
So not everything is doom and gloom in workplace relations and this report I think certainly emphasises the good news.
BILL SHORTEN: Thank you for the question. I’ve read this report; I’ve had the opportunity to consider it over the last six weeks. What struck me reading this report is there are no “break glass: emergency” calls within this report. This report does not propose urgent remedial retrospective legislation.
What this report correctly identifies in my opinion and persuasively argues, is that much of what’s happening in Australian workplace relations is positive and good news.
In terms of specific legislative suggestions that the review makes going forward, we’ll certainly consult on them – we’ll talk to the stakeholders. As I said, I’ve already been hitting the telephones this morning, and where we can get agreement quickly we’ll move quickly. Where it’s going to take longer, I’ll take the time to help work through the issues that people have.
JOURNALIST: Well the panel does say the level of productivity is still disappointing ...how will the panel’s recommendations affect productivity?
BILL SHORTEN: Well first of all, let’s get some numbers out there on productivity which I think are...because I thought maybe you may raise that question Ewin.
In the March quarter – the source for my document is released by my department but it’s using the Australian Bureau of Statistics. In the March quarter 2012, trend labour productivity — that is output per hour worked, in the market sector— has increased 1.2 per cent over the quarter and it’s increased 3.9 per cent over the year.
Now these numbers do move around. Big caveat, volatility. But any study of the productivity graph at the moment shows its going up, not down.
Now what contributes to that productivity number is whole range of factors and I appreciate that increases in productivity have a lot to do also as investment comes online, capital is turned into productive investment and machinery... we’re actually seeing increase in output per labour hour worked.
But what the Fair Work Australia unequivocally said is having discussed how productivity growth have been disappointing over the past decade and in my words it has been a public policy issue which has haunted over the last decade. And indeed if you look at the last few years during Work Choices and during the pre-Work Choices period, productivity had been slowing.
What the panel said is this, in black and white: the panel is not persuaded that the legislative framework for industrial relations accounts for this productivity slowdown.
Our challenge in productivity is at the enterprise level principally. It’s through collaborative engaged workforces. It’s from employees who come to work each day who feel that their interests are aligned with employers.
Australian workplaces are succeeding, and we are seeing an improvement in productivity. It doesn’t mean we can’t do more and of course that’s one of the filters by which we’ll examine this report.
But I’d also submit to you that having a National Broadband Network which allows people...companies to bid for work overseas which allows for distance education which means that people don’t spend so much time in motor cars travelling to and from work, that’s productive.
Having better infrastructure is productive. Having a more skilled workforce is productive. There are many elements in the productivity debate.
The Gillard Government is committed to improving productivity across the range of issues, not the least of workplace relations. We believe that the best gains in productivity are made at the workplace level, not through a debate about industrial relations regulation which only captures part of the debate and the panel said that framework, the current framework is not contributing to the slowdown.
BILL SHORTEN: The report makes some suggestions around Greenfield agreements. This is probably one of the more specific recommendations that it makes. Certainly I will engage in discussion with stakeholders from the union- employee perspective and also from the company perspective.
What I would also say as we talk about these matters that let us not be under any illusion that our resources sector isn’t doing well. It has been doing well and there is a pipeline of projects. What challenges – and I had the opportunity to travel to the Bowen Basin to see the BMA operations in recent days – certainly industrial disputation has been a challenge there as they come towards their enterprise agreement. But so have the floods and also so have world prices challenging and the growth of American markets in coal production. So we’re committed to working through to see if there’s further improvements need to be made in Greenfields arrangements. We’re committed to making sure that intractable disputes don’t remain intractable.
But on the other hand, I recognise there is a massive pipeline of investment that has been coming through in our resources sector and I’d also submit that Australians are working hard in resources and all other sectors of the Australian economy.
JOURNALIST: So you accept the current provisions are an issue?
BILL SHORTEN: I accept that the report says that they’re an issue. And I promise to consult with stakeholders about the points that this report makes. I also believe that the Australian resource sector has been contributing to Australian prosperity in recent years and I also accept that non-mining sectors also been contributing to Australian productivity. I also recognise that intractable disputes can occur outside of resource projects as well.
JOURNALIST: Minister, can I ask you a couple of manufacturing questions?
BILL SHORTEN: Sure.
JOURNALIST: First of all, is it inevitable that Ford will leave Australia in the not-too-distant future?
BILL SHORTEN: No, it’s not inevitable, but I did listen very carefully to the comments made by the insolvency administrator from PPB, who I have worked with in the past.
I think what is the case is that we will maintain a manufacturing sector in Australia and I certainly reject the assumption that Australians can’t make things that people around the world don’t want to buy.
I do recognise that the automobile industry is under pressure. I do know that the Government has supported keeping Ford here, and we’ve managed to keep Ford here longer, I think than others would have done if they’d been in power. It’s only Labor who has a plan for the automobile industry. It’s only Labor who’s invested and got a clear policy of supporting the automobile industry.
Ford’s decisions are ultimately commercial and they’re made in other places, but one thing’s clear: no one’s saying that industrial relations in the auto industry is a reason for Ford to stay or to go. Secondly, only Labor has a policy to support the automobile industry; unlike those who would seek to be in Government.
JOURNALIST: Why then, if the car industry is suffering, do you allow foreign cars into the country, that don’t have a five-star safety rating?
BILL SHORTEN: In terms of matters to do with safety in motor vehicles, it really is another Minister’s portfolio. And that’s dealt with by the Transport Standards Bureau. You’d be better off asking questions around car safety to the Minister for Transport, Anthony Albanese.
JOURNALIST: Can you understand the disquiet though?
BILL SHORTEN: I can understand concern about buying Australian made goods. I can also understand the importance of safety. But if you want specific answers about particular cars and transport safety ratings, I really think that there’s enough here to talk about in workplace relations, or indeed my other portfolios without me expanding into the transport area.
JOURNALIST: Will you pressure other governments to purchase Australian cars?
BILL SHORTEN: Well, the Australian Government certainly has a strong pro-Australian procurement policy. I know for myself, I drive a Ford Territory. I am pleased however they put a diesel engine in it, that is more fuel efficient. I’m genuinely not the best expert on motor vehicles, and I’m happy to pass on your questions to the other Minister. Last question.
JOURNALIST: Is there anything in the report for small business? A lot of it seems oriented towards big companies, with like, you know specialist HR and they’ve got union membership and so on. What’s in it for small business?
BILL SHORTEN: In terms of small business, they are an important engine in the Australian economy. Part of the reason that our unemployment increases have been slower than some predicted, I think is because of the contribution of small businesses employing people.
If you look at some of the areas where jobs are increasing it’s not just the mining sector it’s the health and services aged care sector... a lot of small businesses contributing to keeping unemployment numbers where they are.
The reason why I go to that is to emphasise we think small business is important. That’s why there’s a been a range of reforms proposed across Government to assist small business, and we keep working determinedly with Peter Strong in COSBOA.
In terms of this I think the main areas which will be of interest to small business will be some proposals and suggestions around making it easier and more transparent for small business to function with the unfair dismissal laws.
I think that’s the area which will probably be of greatest interest to small business. There’s some propositions about time periods... aligning time periods for when people can use different legal rights and remedies to assert unfair dismissal.
BILL SHORTEN: Yes. What you’re referring to, is what I was referring to, just using different words. The report does, the report puts forward the position that under one heading, you’ve got a certain time period to make an unfair dismissal application, 14 days. Under another potential heading for a claim for unfair dismissal you’ve got up to 60 days. And I think there is some discussion...I don’t think... I know there is some discussion in the report about whether or not that’s creating an arbitrage – people shopping for a particular claim under, which allows them more time.
Having said that, and the report makes that, there’s some other points made about unfair dismissals. First of all, when you look at the number of unfair dismissal applications which were made in the two years before Work Choices – let’s accept that Work Choices just took away the rights of millions of people to make unfair dismissals – but I got some data in case the Fin Review asked me that question. Um, and when I look at unfair dismissals and I want to give you the specific numbers, so there can be no ambiguity about it.
BILL SHORTEN: ... I’ll just give you the numbers. ...14,000, if you look at the number of termination of employment applications made under the Fair Work Act. There was an average of 14,579 applications over the first two years of the Fair Work Act. Now, accepting that Work Choices was an aberration where millions of people were just moved beyond the jurisdiction of having unfair dismissal...if you look at the average two to four years of the Workplace Relations Act, it was 14, 886.
Clearly there are more people covered by unfair dismissal applications or the right not to be unfairly dismissed than previously, but there hasn’t been an explosion in claims despite what some of the press reportage has indicated to the contrary. But, there is a point there about different time limits and certainly the Government will take that on notice.
JOURNALIST: What do you say to all those employers and business groups [inaudible] ... substantial changes the last two years? They’re going to be pretty disappointed I imagine by this report. What’s your response to that?
BILL SHORTEN: Why would they be disappointed if there’s no evidence to support particular propositions? Evidence. Evidence always trumps opinion. Facts always beat prejudice. What this report does is that it shows evidence that the main objectives of the Act are working. We listen very carefully to business, we consult with them, I’ve spent a lot of time in the last six months helping work through particular disputes with companies, working with stakeholders, working with unions. But evidence and science and fact always beat prejudice and opinion and rumour.
BILL SHORTEN: No, what I’m saying is that what guides the Government is evidence. There’s been constructive suggestions and very significant ideas put forward in the submissions. But also the report makes it clear that the argument which says that there’s been low productivity, there’s been a massive explosion in industrial action, that somehow the unfair dismissal laws are being rorted massively—the science is in ladies and gentlemen and it doesn’t show that. It shows, in conclusion, that the objectives of the Act are being met; it shows that the policies (the detailed policies) which Labor took to the 2007 election and again re-submitted to the people of Australia transparently in 2010—it’s working, people are not going backwards. And I think what this report is where’s the Liberal policy? What are they going to do if they’re in charge and we’re none the wiser. Thanks very much.
Mr Shorten’s Media Contacts: Sam Casey 0421 697 660