Bills

Long Service Leave (Calculation of Average Weekly Earnings) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 9 September 2015.)

Mr KNOLL (Schubert) (11:02): For the benefit of those in the gallery, I have said before that I normally sit in the place back there; I am the lead speaker on this bill, so I get to sit up the front.

The DEPUTY SPEAKER: You could let me explain that, if you really needed to explain it. This is actually parliament.

Mr KNOLL: Sorry, Deputy Speaker; thank you. I point out that I will be the lead speaker for the opposition on this bill. The Long Service Leave (Calculation of Average Weekly Earnings) Amendment Bill 2015 seeks to correct a problem that arose out of the Flinders Ports Pty Ltd v Woolford case, where a worker was injured for three years prior to being terminated but, in the calculation of the termination payment for that worker's long service leave entitlement as part of their severance package, because the person was on workers compensation for the three years prior, the sum, under the act, and the calculation that goes with it were negligible; therefore, this worker was denied what they otherwise would have been given, that is, a proper long service leave payment.

On the face of it, this bill corrects that, and we are quite happy to say that we are going to support it. I want to point out that, in the case we are talking about, Flinders Ports Pty Ltd v Woolford, as part of Justice Stanley's conclusion, he stated that the worker:

…was entitled to a payment in lieu of long service leave upon the termination of his employment on 23 September 2011. However, in the unusual circumstances that obtain in this case, where the deceased did not work for almost all of the three years immediately preceding his entitlement to payment in lieu of long service leave arising, the calculation of that entitlement pursuant to s 3(2) is in a negligible sum. This is an unfortunate result. I consider it deserves the attention of the Parliament.

So, the judge considers it; the parliament takes action—and it is wonderful that our democracy is working in this way.

Long service leave, in a much broader sense, is a very important provision, and something that I think is universally understood to be a good thing. Long service leave gives the opportunity for workers to take longer restorative breaks after showing long periods of loyalty and good service to the companies they work for.

Long service leave is something that I am sure, in the heady industrial days, was fought long and hard for. But it is interesting that in a modern working environment, where workers are much more willing and able to move between jobs—we have a much more transient workforce and a more casual and part-time workforce—the provision of long service leave is quite evidently not as prevalent as it was before and so the ability for workers to take advantage of longer restorative breaks is less and less.

When long service leave was originally envisaged, it was very much around the idea that people would work for the same business for their entire lifetime. Quite clearly, these days that is not the case. Another thing that I suppose changes the use of the Long Service Leave Act 1987 is the fact that since the award harmonisation process of 2010 a lot more workers were then covered under federal awards, and those federal awards were simplified. Therefore, the use of this act is quite limited.

Interestingly, long service leave is something that came up in the newspaper only recently, due to the good work of Rob Lucas in the other place. It has been uncovered that many public servants are not taking their annual leave and accruing huge sums of money and a huge number of annual leave days. The reason that is not necessarily desirable is that every time a worker gets a pay rise those annual leave or long service leave days get more and more valuable.

The payment of that money is indexed, so people accrue days and not a total value. So we see, for instance, an example where an employee within the Department of the Premier and Cabinet is owed 468 days of long service leave, currently valued at $521,000. That is a huge sum of money, and if this is allowed to continue it will end up costing taxpayers even more money.

This comes with a backdrop that governmental and departmental policy states that employees are supposed to take annual leave when it is accrued, up to only two years' worth of annual leave (so, if we are talking about 20 days per year, that is 40 days). But we see instances where workers have accrued up to five years' worth of annual leave entitlements, and this has been allowed by the public sector. Given that only four out of the 14 departments gave the information to the Hon. Rob Lucas, this appears to be a problem that is probably a lot more widespread than is otherwise being portrayed in the media.

I will have some questions to go through committee. In the diligence of being lead speaker on this bill, I went through and looked at the second reading speech brought down by the Attorney (the member for Enfield). Can I tell you that he caused me hours of pain because it was really hard to look for section 3(4)(a) and (b) within the Long Service Leave Act as it does not exist. I searched long and hard through hundreds of pages of legislation only to realise that there is no such thing as section 3(4). That is okay; I will tease out those issues with the Attorney and hope that it is only an oversight or slip of the tongue. It was part of the speech he read into Hansard as opposed to seeking leave to insert the rest of his remarks so, hopefully, that is a small issue which we can tease out. That said, the opposition is happy to support this bill and we look forward to the committee stage.

Mr TARZIA (Hartley) (11:09): I also speak in favour of the Long Service Leave (Calculation of Average Weekly Earnings) Amendment Bill 2015. As we have heard this morning, it was introduced by the Deputy Premier on 9 September 2015. The bill seeks to amend the Long Service Leave Act 1987, and it has been drafted in response to a very significant Supreme Court appeal case heard in January of this year, that is, Flinders Ports Pty Ltd and Woolford.

Justice Stanley made a number of comments in his judgement. I have had the pleasure of having a little bit to do with Justice Stanley in the past, and he is an outstanding legal mind and an outstanding advocate as a solicitor as well. I know that he is an expert in this area of law and extremely well qualified to comment.

I implore the Attorney-General to not only listen to Justice Stanley's comments but also listen to some of the other judges who have, in recent times, made judgements and called on the parliament to bring into law their suggestions. The most brilliant legal mind in South Australia would have to be the Chief Justice, Chris Kourakis, who, in recent times, has made a suggestion to this parliament that the parliament correct part of the drug trafficking laws in this state. The Attorney has ignored the most outstanding legal mind and his suggestion—

The Hon. J.R. RAU: Point of order, Deputy Speaker.

The DEPUTY SPEAKER: Order! There is a point of order. Minister.

Mr Tarzia interjecting:

The DEPUTY SPEAKER: Be seated for a point of order.

Mr Tarzia interjecting:

The DEPUTY SPEAKER: Order!

The Hon. J.R. RAU: The tribute presently being offered to the Chief Justice by the member for Hartley is indeed touching, and if we were having a valedictory or something for him, I think it would be entirely appropriate, but considering the fact that we are not talking about either the Chief Justice or anything to do with drugs—

The DEPUTY SPEAKER: Your point of order is relevance?

The Hon. J.R. RAU: Yes.

Mr TARZIA: Thank you, Deputy Speaker.

Mr GARDNER: Point of order, Deputy Speaker.

The DEPUTY SPEAKER: The member for Morialta has a point of order.

Mr GARDNER: I make the point that the Attorney's point of order is mischievous because clearly the member for Hartley's comments about the Chief Justice go to the merits of the bill.

The DEPUTY SPEAKER: I think that we will dispense with all the extra noise and return to the substance of the bill.

Mr TARZIA: I will say, Deputy Speaker, that when the Attorney does become a judge, I will have nice things to say about him too.

The DEPUTY SPEAKER: Order!

Mr TARZIA: Getting back to this bill, the bill does seek to amend the Long Service Leave Act 1937, and it has been drafted in response to a landmark court case, as I have said. It was a decision related to a casual worker at Port Lincoln who had worked on a number of contracts, I believe, from about 1990 until 2008. From 2008 to 2011, when his employment was formally terminated, that worker was unable to work, due mainly to the work-related injury he had sustained. Justice Stanley, in his conclusion, goes on to say at paragraph 115, that he was of the view that the deceased:

…was entitled to a payment in lieu of long service leave upon the termination of his employment on 23 September 2011. However, in the unusual circumstances that obtain in this case, where the deceased did not work for almost all of the three years immediately preceding his entitlement to payment in lieu of long service leave arising, the calculation of that entitlement pursuant to section 3(2) is in a negligible sum. This is an unfortunate result. I consider it deserves the attention of the Parliament.

He went on to allow the appeal to set aside the order made by the Industrial Court magistrate and to remit the matter to the Industrial Court magistrate for the purposes of making an order, after calculating the entitlement to payment in lieu of long service leave, in conformity with the reasons that he had given.

As my colleague has pointed out, payments under the Long Service Leave Act are based on an average calculation of the worker's last three years of employment. In this case, due to the injury sustained, as we have heard, that earning capacity was not much at all because of the injury he had sustained. The bill seeks to clarify these aspects and to confirm the principle that part-time and casual workers should not be treated differently from full-time workers, who do not have their long service leave payment impacted as a result of workers compensation. Obviously the government is arguing that if a casual or part-time employee is entitled to long service leave payments they should not end up with a zero minimal payment because they were injured while performing their work.

The government has also claimed, I believe in a briefing to members on this side of the house, that the bill has been supported by IRAC, and obviously that organisation includes not only employers but also employee organisations. I understand that also we have had verbal confirmation supporting the bill by an array of organisations, including the Master Builders Association, the Australian Hotels Association and the Law Society of South Australia.

Obviously some organisations have flagged to us that this could potentially be another burden, hindrance and cost to business, however, I would say to them that on balance in this instance I think we do need to do what is right and stick with the judgement of the Full Court of the Supreme Court and the bill that the government has put before us. I think it is a common-sense bill; and, once again, I would implore the government to listen to the Supreme Court on more occasions, and I support the bill.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Housing and Urban Development, Minister for Industrial Relations, Minister for Child Protection Reform) (11:16): Thank you very much, Deputy Speaker, and can I thank the contributions from the two members who have spoken. I appreciate the member for Hartley's support for the bill; and, if I can get a copy of Hansard from today and he would not mind autographing it, I will send it around to the Chief Justice and I am sure that it will find pride of place on his wall.

The member for Schubert raised a matter of being sent on something of a wild goose chase. I think that I might be able to help him, and I am sure that if I am not helping him he will advise me in committee. The reference in the second reading remarks to section 3(4)(a) was a reference to the primary act as opposed to the amending act. Section 3 of the Long Service Leave Act is headed 'Interpretation', and subsection (1) of that includes a definition of a bunch of words. Subsection (2) of that deals with ordinary weeks rate of pay. Subsection (3) deals with 'Employers are related for the purposes of this Act if', and then subsection (4) states:

For the purpose of averaging weekly earnings under subsection (2)(a) or the number of hours worked per week under subsection (2)(b)—

(a) any week when the relevant worker was on unpaid leave for the whole of the week will be disregarded; and

Now, that is the particular passage to which the second reading speech was referring those who were following it. I do not know whether that is helpful or not helpful, but that is basically where we were going. I have to say, too, that I do appreciate the fact that the opposition is supporting this bill. I think that any person, as both the speakers for the opposition said, who looks at the practicality of this would agree that this was clearly an unintended gap or omission in the scheme, and it clearly does constitute an unfairness which the parliament should remedy.

As I said, I do greatly appreciate the fact that the opposition has come to a similar conclusion and I look forward to its support of the passage of the bill both through this place and, perhaps, the sometimes more tempestuous passage through the other place.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

Mr KNOLL: This is a little bit more broad and something I am trying to cover. The application of this award is only for those workers on state awards—that is correct?

The Hon. J.R. RAU: I am advised that, in practice, what happens is that the state Long Service Leave Act in one way or another applies to most workers in the state. It does not, however, apply to commonwealth public servants and suchlike who have a commonwealth instrument, which is slightly different, which governs their arrangements. This is the general standard in terms of people employed irrespective of whether they are on a federal award or not.

Mr KNOLL: Can I seek some further clarification? I understand, especially after award harmonisation, at a state level there is a general provision that we have seven and 10-year pro rata and then full entitlement, but a lot of federal awards have a 10 year and 15-year provision. I also understand that federal and state awards generally differ where a federal award does not confer that right upon casual employees, whereas this state award does extend that to people under state awards.

The Hon. J.R. RAU: It is a very interesting point that the member raises. I will deal with the easy bit of it first. As I am understanding the advice I have received, since the modernisation of the awards in 2010, none of those federal awards continue to contain their own internal long service leave provisions. There are, however, people who have a hangover entitlement from pre-existing federal arrangements. That then gets us into the very interesting world of the inconsistency of commonwealth and state arrangements, and that is a university course on section 109 of the constitution of the commonwealth.

The gist of it is that, for current purposes going forward, the federal awards do not have their own self-contained long service leave provisions and therefore there is no conflict. It also is the case that the direct application of the federal long service leave laws is only to federal public servants, and so all we are left with, as I am advised, is a residual group of people who would have been in federal award conditions with their own internal long service leave arrangements who continue to be employed and continue to be entitled to the accruals under what was the former arrangement.

Mr KNOLL: My third question on this I will put in two parts, if that is alright. After 2010, we expect that the provision for casual employees has now been widened, where it was not an automatic entitlement for those under federal awards. It now is an entitlement under federal awards. Does anything in this bill confer new long service leave entitlements on any employee? Is there anything in the changes that we are enacting?

The Hon. J.R. RAU: No—again, good point. This amendment is not intended to increase the scope or the capture of this piece of legislation. What it is intended to do is to say, for those people who are captured by this legislation, in the event of them being off in the same circumstances as the applicant in those proceedings, they will not be in a position where the time does not count for them. That is all it is doing. This is deliberately intended to do only what was necessary to rectify the defect that was identified by Justice Stanley in that case.

Clause passed.

Remaining clauses (2 to 4), schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Housing and Urban Development, Minister for Industrial Relations, Minister for Child Protection Reform) (11:26): I move:

That this bill be now read a third time.

Bill read a third time and passed.