I welcome the opportunity to speak on this bill. Unlike the previous speaker, the member for Lalor, I will not be speaking about hypotheticals. The Fair Work Amendment Bill 2014 certainly covers a number of issues, including addressing the current imbalance in union workplace access rules, right of entry and Greenfields agreements. However, I want to focus on how we are going to improve workplace productivity through the use of individual flexibility arrangements and, as a result, increase profitability for small business because, at the end of the day, it is the small businesses that survive that are going to create the most employment in any of our communities.
We live in a 24-hour society where people can do their weekly grocery shopping online. People can go to the gym or grab a bite to eat at times when most of us are tucked up in our beds asleep. People work from home using the latest technology to communicate with offices overseas. Working hours in Dubai, London or New York could be anywhere from 4 pm to 4 am in Cairns. There are university students whose class and lecture times mean that they can only work in the evening and on weekends, and parents who want to spend their days with their kids but work in the evenings when their partner is home. It is clear that flexibility in the workplace has not kept pace with the demands of modern life and the evolving challenges of modern employment.
This bill introduces amendments to provide clarity and certainty for employees around the use of individual flexibility arrangements-IFAs. IFAs were actually introduced by Labor, aimed at helping workers and their employers to mutually agree to conditions that suited their needs. The amendments in this bill are based on the Fair Work review panel’s recommendations. A key factor is that employees have to be better off overall compared to their previous contract or workplace agreement. IFAs are designed to help employees to manage child care or other caring arrangements, to spend time with their families or to have time for other commitments. They are specific to the individual and are not designed as a management tool for a business.
There are also key safeguards to ensure that employees are actually better off: an employer cannot force an employee to sign an IFA or make it a condition of their employment, an employee must be better off overall than they would be under the modern award or enterprise agreements that apply to them and a worker has to provide a statement to the employer saying that the IFA meets their genuine needs and that they are better off overall.
Anybody who opposes these amendments needs to explain to Australian workers why they should not have the opportunity to work out an arrangement that genuinely meets their own needs.
These changes are something that I have been pushing for because in Leichhardt we have the highest rate of closure of small businesses in the country, with more than 400 of the Far North’s small businesses shutting their doors in just a two-year period. We have experienced record unemployment levels in recent years, hitting 9.6 per cent at the start of this year, and we have seen extremely high youth unemployment. We have the unenviable record of the highest unemployment on mainland Australia with one in four young people aged between 20 and 24 years not working. This has doubled since 2007, and it is reaching crisis point.
How have we got to this point you might ask? The global financial crisis hit Cairns very, very hard, as did the high Australian dollar, increased government red tape, a drop in tourism and the lack of new construction projects from 2007. We also have an employment environment where penalty rates have got totally out of control. Tourism in Cairns is one of our greatest income earners. It generates almost $3 billion a year for the regional economy and 11.3 per cent of the workforce in Leichhardt is directly employed in tourism-the highest proportion in Australia. Around 40 per cent of businesses in Leichhardt have some reliance on tourism industry.
The inherent nature of tourism means it is not a nine-to-five enterprise. We all know that wonderful feeling on holiday when we lose track of what day of the week it is because it really does not matter. Tourists want to go out hot-air ballooning at five o’clock in the morning, eat dinner after 9 pm, visit the late-night markets or hit the bars until the wee hours, go out for breakfast on a Saturday and dive on the reefs on a Sunday. If we are dealing with international tourists, particularly from southern Europe, their dining habits mean that they do not even consider having a meal until at least nine o’clock in the evening. Public holidays are of course a hugely popular time for visitors to come to Far North Queensland, but you can walk around Cairns and find that many businesses are not open. It is no coincidence that the very times that tourists are walking the streets looking for a coffee or a meal the doors are closed. These are of course the times when penalty rates apply. It is these rates that make it virtually impossible for businesses to open their doors, pay staff and still make a profit.
It is particularly difficult for small businesses that are run as mum-and-dad operations-and an overwhelming majority of small businesses are exactly in that category. If you cannot afford to employ someone else, you have to do it yourself. This has a huge impact on their work-life balance. People just cannot keep up with these sorts of hours without cracking under pressure. The Easter long weekend, which included three public holidays and a Sunday, should have been a financial windfall; instead, for many it was an economic disaster. There are restaurants and cafes in Cairns that did not open over Easter or dramatically reduced their hours in a bid to work around penalty rates, which allowed some wait staff to earn double time and a half, or more than $50 an hour.
The Chamber of Commerce and Industry Queensland estimated that about 60 per cent of hospitality businesses closed at stages over that long weekend. That has a huge negative impact on the experience of the many visitors who come to our region for their holidays, and of course that story is always carried back with them if they cannot get the experience they expect for the holiday they have purchased. I know that the Minister for Employment, my colleague Senator Abetz, met with business groups in Brisbane around that time and said that changing the structure of penalty rates was not on the agenda. That is why this legislation is so valuable-it is providing a means for employers and employees to negotiate better working arrangements that do not involve penalty or overtime rates. I will give a couple of examples of how it could work.
Rob is one of the maintenance crew on the dive boats that visit the Great Barrier Reef. His employment is covered by an enterprise agreement, which has penalty rates. Unfortunately, Rob’s mum lives in Weipa and she is not well. Rob wants to work from Monday to Thursday so he can travel on Fridays to his mum and stay with her until Sunday. He still wants to get his normal weekly wage and he does not want to work part time. Rob speaks to his boss and they agree on an individual flexibility arrangement, allowing him to work 38 hours per week by working later Mondays to Thursdays without the penalty and overtime rates that would usually apply. Rob is better off overall because he can help his mum, something that means a lot to him, and he still gets his weekly wage.
Gemma is another good example. She is a local mum who works part time as a bookkeeper for a restaurant chain. She usually works from 9 am to 4.30 pm under an award agreement. Her husband Greg works an afternoon shift and starts work at two o’clock. Gemma would like to finish work earlier in the afternoons so she can pick up the kids from school. Gemma talks to her employer and they make an IFA so she can start work at seven and finish at 2.30, meaning she can start work before the normal hours of work for the business. Gemma is better off overall because she still works the same number of hours but can pick up her kids and avoids paying after-school care.
If you are in the service industry, hospitality in particular, getting paid double or more than your normal hourly rate is certainly a bonus and you are working public holidays or weekends to earn that. But there are a lot of people out there who would rather just be working-earning a normal wage is far better than not earning at all. We have a lot of people in my electorate, such as university students or mums, who want to work or want more flexibility in their working arrangements but cannot because employers do not want to employ them on a Sunday, a public holiday or outside of the so-called normal working hours because of the high cost of penalty rates.
My son is a classic example. He is 20 years old. He is in his fourth year of university. With his study schedule and his interests he is quite happy to work on a Sunday or a public holiday. He does not want to get double or triple pay; he would just be happy to get a bit of spending money. But he has struggled for a very long time to get any sort of work. The situation is absolutely adding to the unemployment and small business sustainability issue in Leichhardt and this is reflected right around the country.
There needs to be a full review of the rates. I am not talking about exploitation; I am saying that this 1950s view of the business world-from nine till five, Monday ’til Friday, excluding public holidays-is, quite frankly, no longer relevant. People are used to working those hours and there is no reason why one person’s weekend on Saturday and Sunday cannot be another’s on Tuesday and Wednesday. By no means are we saying people have to do this, and this protection is built into this legislation, but I think you will find there will be more people in employment if they have the chance to work specific hours. They would be happy with a fair rate of pay and improved flexibility without all the penalties that go with it.
As a government, we need to step up to this. I know the unions will jump up and down and, as did the previous speaker, start talking about Work Choices and such nonsense. But, at the end of the day, it is about people power. We have to reduce our unacceptably high level of business failure and our unacceptably high level of youth unemployment. We can see where the problems have come from and we have to make decisions to fix them. The unions also have an obligation-rather than running around like Chicken Little, saying the sky will fall, they should be part of this debate-to make sure that as many of their members as possible stay in the workforce. They are only going to stay in the workforce if small businesses continue to prosper and continue to employ them, rather than the situation where only mum, dad and the family are operating the business.
The Australian Chamber of Commerce and Industry has warned unions that they are harming young people’s chances of being competitive in the job market by seeking increases in apprentice and junior wages.
The ACCI is concerned about rising youth unemployment and the number of people under 24 who are neither working nor learning. It says that unions are ‘not representing the long-term interests of young people’.
Deputy Speaker Goodenough, when I look at my son’s case-and that of many of his friends-we are talking about a young man who is 20 years old-21 this year-who has barely had any opportunity in the workforce. As he is getting older, of course, it is going to be harder and harder for him to be able to show any qualifications or any ability to be in the paid workforce. That worries me immensely. Those part-time jobs that he got to help pay for his bit of fuel money and a little bit of entertainment as he went through his university degree are very, very critical for an employer-even after he has got his degree-looking at him to see what capacity he has to go into the paid workforce. This is why it is so important.
To be fair, there is only a short period between when youth rates and adult rates apply. This is why it is important that we see that opportunity being captured by young people. It is not unreasonable for those entering the workforce to accept that their early years in the workforce are about building skills, gaining experience and getting a foothold in the workforce. Do that, and they will certainly find that as their qualifications improve with their education that higher wages will follow.
We all talk about work-life balance, and for many that is very hard to achieve. But by creating more flexibility in the workplace under agreements that ensure workers are better off, as judged by their own particular circumstances, I think there is a huge amount of potential here. At the end of the day we want to be a modern, dynamic, flexible economy. This goes hand in hand with creating a productive workforce that will lead to greater prosperity for our community and for our country.
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