Andrew Leigh

CLOSING LOOPHOLES

Second Reading Speech
House of Representatives, 14 November 2023

Short-sighted employers would like to have highly-paid customers and low-paid workers. Wise employers recognise that their employees and their customers are ultimately the same pool of people and that paying workers well sustains strong demand within the economy.

Labor is strongly committed to ending the flatlining of wages that we saw under those nine long coalition years, a period in which productivity growth was appalling, in which wage growth was sluggish and in which household income growth languished. Under the period of the coalition government, Australians had a government for whom keeping wages low was a 'deliberate design feature' of their 'economic architecture'. These were the words of the former finance minister.

When we came to office, we set about changing that. Over our first year in office, our government saw more jobs created in the Australian economy than were created in any first year of a new government. In fact, more were created in our first year than were created in the first term of any former government. We have unemployment sitting below four per cent—full employment by anyone's definition. Since the monthly unemployment series began in 1978, there have been only 19 months in which unemployment has been below four per cent. Sixteen of those 19 months have been under this government. Of the half-a-million jobs created since we came to office, some 85 per cent have been full time. The gender pay gap has fallen to its lowest level ever. The number of days lost to industrial action has fallen sharply.

We understand that there are many employers in Australia who are keen to ensure that we don't have a race to the bottom in standards. Australia's comparative advantage in the world will not be that we have the lowest-paid workers in the world. If companies want to find the place where labour is the very cheapest, they're going to find other countries than Australia. What Australia's economy will do well is to ensure that we have workers who are well-trained and are able to use new technologies, such as generative artificial intelligence, in an environment in which firms are competing based on the best product and service that they're offering, not based on a race to the bottom.

The 'closing loopholes' bill is about fairness to employees, but it's about fairness to employers too. I've spoken to many employers who are sick of finding themselves competing with another firm that doesn't do the right thing—that doesn't pay fair wages. They feel that then they're in a circumstance where they have to look for those loopholes instead, rather than treating their workers well and getting on to grow their market share by looking after their customers. So we're not going to have a race to the bottom under this government. We're not going to have real wages languishing, as occurred under the former government. Instead, we're going to close the loopholes.

I want to go to a number of the ways in which this bill seeks to achieve that—firstly, in relation to wage theft. Right now, if a worker steals from the till, that's a crime—as it should be—but if an employer steals deliberately from a worker, then that's not a crime. That's not fair. That asymmetry doesn't pass the pub test. So, as part of this bill, we're going to ensure that an employer convicted of intentional wage theft will face up to 10 years imprisonment and courts will be able to impose fines of up to three times the amount of the wage underpayment in both civil and criminal contexts.

Now, this change will not affect employers who take reasonable steps to pay the correct amounts. It won't affect employers who make honest mistakes. It will allow the Fair Work Ombudsman to enter cooperation agreements with employers who come forward—a change that was requested by COSBOA.

The enforcement of wage underpayments is a critical issue. This bill will allow the Fair Work Commission to allow a representative to enter a workplace if it is satisfied there is reasonable suspicion of wage underpayment. The bill also contains new protections and rights for workplace delegates which ensure that people are able to speak up about wage theft.

Another loophole this bill closes involves casual employment. Many of us in this place would have worked as casuals. Many Australians would have worked as casuals. But, if you're finding yourself working as a casual year on year, then it is only fair that you have the opportunity to make a reasonable request to be treated as a full-time employee. Flexibility can't only involve the flexibility of employers to decide when workers work. We know now some of the new scheduling software allows employers to make decisions in retail based on the weather and predictions of customer demand, pushing to the last minute the allocation of shifts. That can be good for the business bottom line, but it's bad for the household bottom line. It's bad for workers who need to juggle childcare duties and further studies. This sort of one-way flexibility turns into inflexibility on the employee side. The bill also prohibits sham casual arrangements, which will stop employers deliberately and unreasonably misrepresenting to an employee that their employment is casual when it is not.

The bill also closes the labour hire loophole. There's certainly a role for labour hire. Labour hire emerged out of so-called 'temp firms' after World War II, filling unexpected vacancies when employees were sick. But labour hire, in some industries, has emerged as a way of taking whole sections of employees off the books and driving down wages. Normal labour hire involves labour hire workers being paid higher rates, and those cases are completely unaffected by this bill. But, where a business agrees on rates of pay in an enterprise agreement and then asks labour hire workers to work for less, then that's the labour hire loophole that Minister Burke has been referring to. This bill will allow the Fair Work Commission to make an order requiring labour hire workers to be paid at least the minimum rate in a host business's enterprise agreement. It won't apply to hosts who are small businesses. It won't apply to hosts who are independent contractors. It won't apply to training arrangements.

Another important loophole that this bill closes is to do with gig workers. This has been an issue that I've long been concerned with. In 2015, from opposition, Labor set out a set of six sharing economy principles. One of those principles was that ‘new services must support good wages and working conditions’. We made clear that, ‘when offering services that involve human labour, sharing economy companies should ensure that they achieve work outcomes at least equivalent to the prevailing industry standard’. That was some eight years ago. Since then, we've seen a growth in the scale of what we used to call the sharing economy and now call the gig economy.

The Australian Bureau of Statistics brought out estimates yesterday which, for the first time, outlined its best estimate of the size of the digital platform workforce in Australia. They estimated that, over the previous four weeks prior to the survey, the share of people who reported undertaking digital platform work was about one per cent of the employed population, with an employed population of some 14 million people in Australia. That means we're talking about around 140,000 people who are digital platform workers at any given time. The Australian Bureau of Statistics reports that those digital platform workers are about two-thirds male, with the average age being 38 for men and 36 for women. The most popular digital platform tasks were food delivery at 35 per cent and personal transport at 27 per cent.

We know that these can be pretty dangerous occupations. We've had an ongoing spate of deaths of food delivery workers, and this bill ensures that those people are not left without any standards whatsoever. It allows the Fair Work Commission to make minimum standards orders for workers on digital platforms who don't meet the definition of 'employee' but nonetheless have low bargaining power or low authority over their work or comparatively low pay. That might involve people doing work via digital platforms in the NDIS, working in aged care, delivering food to people's homes or transporting us around.

This is not about making these people employees; it is about allowing the Fair Work Commission to tailor orders for those people. For the example the minister has given in relation to rideshare, the Fair Work Commission might go for a five-minute or permanent rate rather than an hourly rate. That recognises you can't logically pay somebody for all the time they're on the app—that'd wreck the form of employment—but these gig workers shouldn't be left outside the protection of our industrial laws. Gig workers will have new rights to seek reinstatement if they've been unfairly deactivated from a platform. There have been accounts of ridesharing platforms that have sought to deactivate those gig workers that have sought to organise. That, now, will be a practice for which those gig workers can seek redress through the Fair Work Commission.

This is a bill which recognises the long history of campaigning to close loopholes among those families who have lost loved ones. In the ACT I think of Kay Catanzariti and Barney Catanzariti, whose 21-year-old son, Ben, was killed on a construction site on the Kingston foreshore when a concrete boom collapsed on him and other workers. I've had the privilege of meeting family members of workers who have gone to work and never come home. Industrial safety is one of the issues on which my party was formed. Labor emerged as the political representation of workers in the parliament. We understand that it is vital that work is safe for everyone. We understand the value and the importance of ensuring that wages grow with productivity. This is fundamental to us as Labor people.

This bill deals with a range of other loopholes too; I haven't gone to all of them today. Road safety will be improved. It expands the Asbestos Safety and Eradication Agency to eliminate silica related diseases in Australia. It simplifies workers compensation for first responders with post-traumatic stress disorder. It'll improve bargaining by giving the Fair Work Commission the power to make enterprise agreement model terms, allowing franchisees to bargain together in the single enterprise bargaining stream. It'll strengthen protection against discrimination for employees subject to family and domestic violence.

Those opposite have scare campaigns, but they won't come out and say what they really believe. They won't come out and honestly say they're opposing this bill because they think that wage theft should continue to be legal. They won't defend the loopholes that this bill seeks to close. If they're not willing to have an honest debate with the Australian people, defending loopholes, then they should back this bill. They should back what this bill will deliver to the Australian people—an Australia which is more egalitarian and more respecting of workers, and whose industrial laws are being updated to deal with the challenge of new technology.

I commend the bill to the House, and I commend the Minister for Employment and Workplace Relations for his constructive work with businesses, with unions, with the community sector and with Australians in bringing this important bill to the House and in closing the many loopholes that are open right now and whose presence is hurting too many workers today.