I rise today to address the government's second round of proposed reforms to industrial relations legislation—the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023. At the outset I'd like to acknowledge that reform of workplace relations is typically complex and lengthy, and there are a broad range of competing interests and the potential for unforeseen impacts that have to be thought through and scrutinise carefully. I would like to thank Minister Burke for his consultation with the crossbench on various issues. He's taken the concerns and suggestions of the crossbench into account, none of which he is required to do, and I thank him for it.
Nevertheless, the crossbench again finds itself in a difficult situation—that is, we're being asked to vote on significant changes to industrial relations laws in circumstances where that legislation is far from being finalised. The lower house will vote. The bill will move to the Senate where it has already been determined an inquiry will take place. That inquiry will report in February next year and inevitably recommend a number of changes to the legislation, some perhaps significant, before the bill then comes back to this place for us to vote on again in its amended form. I raise this because I want to make sure that my community understands that my first vote on this legislation will not be my last.
I also want to point out the difficulties involved in being asked to vote on a large number of changes in one block on so-called omnibus legislation. With this legislation the government is trying to introduce many and varied reforms, some I may agree with and some I may not. Some need further scrutiny and debate, while others need to be passed as soon as possible. Regardless, I will be required to vote on an overall package as a whole. This is disappointing in circumstances where the bill could have been split so that important uncontroversial reforms could have been passed easily and quickly implemented for the benefit of all Australians.
I fully supported splitting the bills because silicosis sufferers should not have to wait to have their claims heard, because people who have been the victim of family and domestic violence should not have to wait to be free from discrimination in the workplace, because our first responders, police officers, paramedics and nurses, so frequently traumatised in the course of protecting us, should not have to wait any longer for changes to make it easier for them to make compensation claims. Despite these issues, over the last several months I have carefully and methodically consulted with both my community and with a wide range of experts and stakeholders about the detail and impact of the proposed changes. I have spoken with local small businesses; employers and employees; and peak industry bodies and industry. In doing so, one of my key concerns has been to ensure that the interests of small businesses, who are doing it incredibly tough at the moment, are protected and balanced fairly against the interests of vulnerable workers. Small business, as we know, employs 6.8 million Australians, just under half of the employed workforce in this country. In New South Wales, 45 per cent of the private sector workforce is employed by small business. It's clear that the success of small business is absolutely vital to the continued prosperity and wellbeing of the Australian community.
As everybody knows only too well, small business has had an incredibly tough few years. If the existential difficulty of the COVID pandemic weren't enough, since then there have been significant interest rate rises, energy price rises, rent increases, supply chain challenges and labour shortages—a perfect storm of hard times which has been happening now for years. Any additional burden in the form of workplace law reform needs to be carefully considered against this backdrop. Changes must help, not hinder, our struggling businesses. At the same time, we know there are groups of vulnerable workers whose interests and conditions very much need protecting. When delivery drivers are dying—12 since 2017—when Qantas illegally sacks 1,700 staff and when 7-11 is able to engage in endemic wage theft from vulnerable, mostly migrant, workers, everyone can agree that something has to change for these people.
That takes me to consideration of the substance of the legislation. I will start with the reforms to the conditions for labour hire workers. This is the change that will allow unions and employees to apply to the Fair Work Commission for orders requiring labour hire workers to be paid the same as what employees at the host company are paid under their enterprise agreement. In approaching this, I'm very aware that in my electorate the backbone of our economy is small business and trade, and that over 20 per cent of people in McKellar are employed in the construction sector. So it is of course a concern of mine to do what I can to limit negative impacts on small business and the construction sector. The minister consulted with the crossbench and listened to our concerns, and it's pleasing to see that the current form of this legislation has incorporated several changes to address these concerns—firstly, to limit labour hire changes to businesses employing over 15 people only, and also only to labour hire contracts for periods over three months. These changes are very welcome—but are they enough?
Do these changes to the legislation ensure the right balance between ensuring labour hire workers are properly paid and that businesses can continue to benefit from the ability to bring in a surge workforce when genuinely needed? What is also particularly unclear in this bill is what 'same pay' in the term 'same pay, same job' actually means. The bill uses the concept of a protected rate of pay. The protected rate of pay is defined as the full rate of pay that would be payable to a labour hire employee if they were covered by the host business's enterprise agreement. The definition of full rate of pay includes any incentive based payments, bonuses, loadings, allowances, overtime and penalty rates, and other separately identifiable amounts. How this will play out in practice is far from clear. One example is where an enterprise agreement in place has been negotiated on terms other than just pay. What if employees at the host company agreed to sacrifice leave for more pay? Again, I look forward to seeing the recommendations of the Senate inquiry into this issue.
The casual workforce is another group of employees affected by the reforms. The government's changes would allow a casual employee, in circumstances where their working arrangements have changed and they no longer meet the definition of a casual, to ask their employer to convert their status to a permanent status. For employees in small business this can be requested after 12 months, and after six months for employees in large businesses.
In the above new legislation, this pathway to permanent employment would occur at the request of the employee. Employers may reject it on reasonable grounds. However, there is already an existing pathway for casuals to convert to permanent work, albeit one initiated by the employer. This extra pathway would mean there would now be three pathways for the casual conversion to permanency, with different rules for small and large businesses and after different lengths of service. It would have been simpler and easier for businesses to implement it if the change had resulted in only one rule under all scenarios. A recurring theme of the business community's response to this bill has been that it adds additional complexity and administrative burden for employers without sufficient corresponding benefits. When it comes to these changes for casuals, I agree with them.
Another of the government's reforms, which has caused much concern for the business community, is one which would allow the Fair Work Commission to set minimum binding standards for employee-like workers using digital platforms, the so-called gig economy changes. An 'employee-like worker' is one who works on a digital platform and either (a) has low bargaining power, (b) has low authority over performance of work or (c) is paid at or below the rate of employees performing comparable work. In effect, the change would require that gig economy workers be given a minimum set of standards that employees enjoy in other forms of work.
On this change, amongst others, I've been lucky enough to engage closely with Mackellar constituent Jordan O'Reilly, who is the co-founder and CEO of company Hireup. Hireup is an online platform connecting Australians with disability with support workers who fit their needs and share their interests. Hireup employs all its 17,000 disability support workers, who all find work through their app. The company's very proud to be proof that you can have the best of both worlds: modern, flexible, efficient technology with full employment rights, including entitlements and protections for workers—something most platform organisers say cannot be done.
Hireup, in its September submission to the Senate Standing Committee on Education and Employment argued that modern convenience and flexibility is absolutely compatible with the framework of formal employee or employee-like legislation, but that most platform companies will not come to this conclusion on their own. Hireup considers that the gig economy reforms will provide clarity and certainty through uniform regulatory standards, allowing all businesses to operate and innovate on a level playing field while protecting workers rights, entitlements and dignity. They wholeheartedly support what they call the government's attempts to improve the industrial relations system in Australia through these reforms. Remember, this is a gig economy employer, not employee.
The aim of this legislation should be to achieve the best balance possible between the interests of big business, small business and employees in a way that guarantees what we all expect in workplace relations in Australia: fairness and safety, while not stymieing a thriving business sector and economy.
As a final point: if passed, I would like the government to take into consideration that companies will need time and resources to enable them to comply. Again, I thank the minister for his consultation on these reforms and I look forward to examining their final form when they return from the Senate. Thank you.