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

Second Reading

Adjourned debate on send reading.

(Continued from 13 October 2015.)

The Hon. R.I. LUCAS (17:06): The Liberal Party supports the second reading of the Long Service Leave (Calculation of Average Weekly Earnings) Amendment Bill. This bill seeks to amend the Long Service Leave Act 1987, and has been drafted in response to a landmark court case in January of this year. In that case, Flinders Ports Pty Ltd v. Woolford, the Supreme Court of South Australia set a significant precedent with a decision that overturned the long-held interpretation of the Long Service Leave Act.

This decision related to a casual worker at Port Lincoln, who had worked on a series of contracts from 1990 until to 2008. From 2008 to 2011, when his employment was formally terminated, the worker was unable to work due to a work-related injury. Judge Stanley's conclusion in part stated:

He 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.

As a result of that determination this legislation has been introduced. 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, the last three years involved virtually zero earnings due to workers compensation, rather than the last three years when the worker was actually working and being paid.

The bill seeks to clarify and confirm the principle that part-time and casual employees should not been treated differently from full-time employees who do not have their long service leave payment impacted as a result of workers compensation. The government has argued that, if a casual or part-time employee is entitled to long service leave payments, they should not end up with a zero or minimal payment because they were injured while performing their work.

The government has indicated that the bill was supported by IRAC (Industrial Relations Advisory Committee), which includes both employer and employee organisations. Verbal confirmation of support for the bill has been received by a number of stakeholder organisations, such as the Master Builders Association, the Australian Hotels Association and the Law Society of South Australia. To be fair, a number of stakeholders, such as the Australian Industry Group and the South Australian Wine Industry Association, have expressed some concern about this being potentially yet another cost for business.

One of those organisations did raise a question, to which I seek a response, and that is that in that organisation's view the government had outlined to employers that there would be no retrospective claims made under this legislation. This employer organisation contacted us with the following comment:

However, the Bill includes a retrospective application to the amendment. Under Schedule 1 of the Bill the amendment will apply to absences of a worker occurring before the commencement of the Act. This is unreasonable and should be opposed.

We seek a response from the government to that particular question from that employer organisation. With that question, we indicate the Liberal Party's support for the second reading of the bill.

The Hon. T.A. FRANKS (17:10): I rise on behalf of the Greens to make a contribution to the Long Service Leave (Calculation of Average Weekly Earnings) Amendment Bill 2015. SafeWork SA's website provides an excellent summary of long service leave. As members would be aware, it is an entitlement that provides for additional leave to long serving workers. Most South Australian workers are entitled to 13 weeks' leave upon the completion of 10 years' service with an employer or related employers. A worker can also be eligible for a pro rata entitlement after seven years of service.

The bill before this chamber seeks to amend the Long Service Leave Act 1987 and arises from a recent decision in the case of Flinders Ports v Woolford, which was heard by the full court of the Supreme Court of South Australia. In this case, Mr Woolford 's long service leave payment was reduced significantly due to the interpretation of the full court of the Supreme Court's interpretation of 'unpaid leave for the purpose of calculating a long service leave entitlement'. I would like to read out part of Justice Stanley's judgement:

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 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.

And so here today the attention of the parliament is indeed being observed. The purpose of this bill, of course, is to remedy this situation. It is important to note that Mr Woolford was a casual worker and a member of the Maritime Union of Australia. A member for some 16 years, Mr Woolford, who passed away in 2014, held a number of contracts with Flinders Ports from 1990 to 2008. My office has been advised that he was unable to work due to a work-related injury he sustained from 2008 to 2011.

As members would be aware, payments under the Long Service Leave Act are based on the average calculation of a worker's last three years of employment. Obviously, in this case Mr Woolford was on workers compensation in this period and so his earning capacity was limited. It is important to note that full-time workers do not have their long service payment reduced as a result of workers compensation.

The Greens believe that it is paramount that casual and part-time workers are not negatively impacted by our laws if they are injured at work, and this bill seeks to remedy that situation. I note that we have an increasing casualisation of our workforce, and of course this was highlighted by the Independent Inquiry into Insecure Work in Australia chaired by the former deputy prime minister Brian Howe. The Australian Council of Trade Unions (ACTU) reported that 40 per cent of Australia's workforce of almost 12 million is employed on a casual or contract basis.

Indeed, in my generation and those generations following mine, we do not envisage a future where we have a job for life with one employer or one group of employers, and certainly the Greens put on notice that the idea of portable long service leave is an idea whose time has come and should be investigated into the future.

Submissions made to this inquiry into insecure work, however, stated that casual workers fronted up for work when ill rather than losing a day's pay or risking being dismissed. The casualisation of our workforce is important to note, because the bill before us today should reflect the hours worked versus the hours paid. Employees are paid based on a minimum hours requirement even if the job takes as little as half an hour. This, of course, in many awards is to ensure that workers are not called in for 20 minutes and treated as if their time is not valuable, and indeed sets minimum hours that must be paid if a worker is called in.

Those workers who have family and caring commitments and myriad other life commitments have to put those commitments on hold to undertake paid work. It is unfair to have a society that expects a worker to turn up for 20 minutes for any particular job, and this is why we have those protections of those minimum hours that, if a worker is called in, must be paid.

One of the concerns the Greens would like to put to the chamber today is that casual and part-time workers are potentially disadvantaged because the minimum payments that they are entitled to, varying depending on the award or agreement, may exceed the time physically worked. The Long Service Leave Act should be aligned with the reality of awards and enterprise bargaining agreements reached regarding the minimum number of hours to be paid to these workers.

I note that the contribution and feedback that we have had from the union most involved in the particular case that led to this bill before us, the MUA, has requested, I understand, both of the government, but without any joy, and now of the Greens, that we investigate in the debate on this bill an amendment to ensure that the worker's ordinary weekly rate of pay will be ascertained by averaging the number of hours worked per week, and any other period of hours worked shall not be less than the minimum pay provided for in any applicable award or agreement, in that period of the three years and multiplying that rate by the worker's rate of pay per hour as at the relevant date, exclusive of overtime, shift premiums and penalty rates.

Certainly, I note that the MUA put a strong case to government, but I am not in a position today to put that amendment because I can read the writing on the wall that the government did not support it and the Liberal opposition is incredibly unlikely to support it. I certainly am not in the business of holding this piece of legislation up, which I understand is one where time is of the essence. For the purposes of ensuring that the debate progresses speedily through this chamber, I just note those concerns.

I call on the government to investigate further the idea of not only these protections for those workers who are in that situation where they can be called in for small periods of time but should quite rightly be entitled to have that time recompensed at a longer rate to ensure that the sanctity of their private lives versus their working lives is protected, but also that portable long service leave in this day and age is something that I think would reflect the realities of Australians' working lives and is an idea whose time has come. I look forward to some response from the government in terms of any directions in that area and the speedy passage of this bill today.

Debate adjourned on motion of Hon. J.M. Gazzola.