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House of Assembly - Fifty-Third Parliament, First Session (53-1)
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Bills

Fair Work (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 20 November 2014.)

Mr MARSHALL (Dunstan—Leader of the Opposition) (11:03): I rise to speak on the Fair Work (Miscellaneous) Amendment Bill 2014, which seeks to amend the Fair Work Act 1994, and indicate that I will be the lead speaker on this bill for Her Majesty's Loyal Opposition. This bill deals with two significant issues. One is the amendment proposed to abolish the statutory office of the Employee Ombudsman here in South Australia and the second, of course, is to deal with changes to the requirement for a constitution of the full commission of the Industrial Relations Commission here in South Australia.

I indicate to the house that we will be supporting the second reading of the bill in this chamber today but will be reserving our position on possible amendments and the third reading until after the bill is reintroduced in February next year, after the government prorogues the parliament. Of course, we are not great supporters of this prorogation. We believe it just creates unnecessary delay to the passage of important legislation before the house, and we cannot see any particularly strong argument from the government as to why this should occur, especially considering that the last prorogation occurred only very recently.

I will now address the issues contained in this amendment bill, starting with the proposed abolition of the Employee Ombudsman. This is an issue which I first raised with the Attorney-General in this chamber during estimates. As we are aware, we have been without an Employee Ombudsman in South Australia for some time. I asked the question of the Attorney-General, whether or not there was a need, given the fact that we have not had somebody in the role for an extended period of time, and to his credit the Attorney-General said that he was not sure whether there was a continuing need to have somebody in this important role. Of course, now we have this amendment bill before us today.

The Office of the Employee ombudsman consists of the Employee Ombudsman and staff appointed to assist the ombudsman in the performance of functions under the Fair Work Act. My understanding is that the budgeted cost for the Office of the Employee Ombudsman in this current financial year is set at $507,000 for a total complement of staff of 5.3 full-time equivalents.

It is fair to say that the original intention of the Employee Ombudsman was to protect the interests of workers in the private sector who were not members of the union. Of course, we have transferred the jurisdiction for private sector employees to the federal jurisdiction. So, this current role, the Employee Ombudsman role in South Australia, has a much more diminished area of responsibility, down to just the public sector and local government employees in South Australia.

The government, in their contribution regarding this proposed amendment, has said that there are now similar services provided to private sector employees with the commonwealth Fair Work Ombudsman. The government also claims that there are various free or low-cost legal services available to all public and private sector employees in South Australia, and for that reason they have moved this amendment. We have received contributions from a range of stakeholders, and it is fair to say that they have been generally in support of the government's position in relation to this matter.

On the second issue, the composition of the Industrial Relations Commission, there is more varied response from stakeholders across South Australia. The current Industrial Relations Commission in South Australia is comprised of the president, two deputy presidents and two commissioners. One of those two commissioners, David Steel, is retiring in December of this year. May I just state for the Hansard that we believe him to have been an excellent commissioner in South Australia and we commend him for his service in this important role.

The government claims that, due to a decline in workload, they do not see the need to replace Mr Steel with another commissioner, but this of course does throw up some problems. The Fair Work Act requires that if there is an appeal to the Full Bench of the Industrial Relations Commission against the decision of the sole remaining commissioner then the full bench must comprise at least one commissioner. We would not have that opportunity if David Steel is not replaced when he retires in December.

As I said, we have had a range of views expressed. We look forward to the committee stage of this bill. We do support the second reading of the bill today, but we will be reserving our position on possible amendments and the third reading until after the bill is reintroduced after prorogation.

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (11:09): I rise to speak on the Fair Work (Miscellaneous) Amendment Bill 2014. It is fair to say that this bill is anything but miscellaneous. Its first objective is to abolish the Office of the Employee Ombudsman, and as has been raised by our leader when he queried the continued workload of that entity in estimates earlier this year, the government is now acting to abolish the position.

This is a position which was originally established in 1994 to provide advice and assistance to South Australian employees. It was to be an independent statutory body established under the Fair Work Act, and it was not subject to control, or direction, by a minister. Clearly, it was designed to ensure that it would be available for employees who were not members of the union, so it is hardly surprising that the government would probably want to get rid of it. In any event, it has fallen into a period of minimal performance because of the amendments which came into effect some years ago to provide for the transfer of industrial relations matters to the commonwealth for all privately employed parties. They now have a different regime of protection and, indeed, places for their disputes to be heard.

The South Australian structure remained for employees of local government and state government. I could never understand—even at that time—that if it was so fantastic for everyone else who worked in South Australia to be transferred to the jurisdiction of the commonwealth, why it was not good enough for public servants. There was some pathetic excuse at the time about the government claiming it needed to keep it within the state jurisdiction and provide services to public servants of local and state government. From my point of view, if it was good enough for the private sector to be transferred, then it ought to be good enough for the public sector.

Nevertheless, a direct consequence of that is that for the last four years there has been little or no work done in the sense of dealing with complaints. It is true that, when one peruses the annual reports of the Office of the Employee Ombudsman, there has been some continued work in preparing papers for consideration by the government. There were inquiries some years ago into child labour dealing with submissions on the state wage case and SafeWork SA's review into occupational and health and safety, and the office made a contribution in respect of fair wear for school uniforms and dealt with the rather new and emerging communities and rural and young workers where they may be marginalised or unrepresented and needed some protection. So, there is no question that in the employment sphere they remained reasonably active, and I have no doubt they provided some valuable advice.

I have no idea what happened in 2009-10 because apparently in that year it did not file a report, and I am not sure why. The 2010-11 annual report explained that it was an entity operating on nearly $600,000 a year. By that stage, the commissioner, Mr Stephen Brennan, and five employees were doing 80 per cent state private matters (which were referred on to Fair Work Australia) and 20 per cent matters within their jurisdiction.

So, it continued on, and when the Attorney, as Minister for Industrial Relations, made a contribution to this chamber, although he referred to this being as a result of recent changes in the commonwealth development (and we are talking a couple of years ago), he also referred to the Employee Ombudsman's annual report for the 2012-13 financial year, indicating that there were less than 2,900 requests for assistance, and only 22 per cent of those queries being from the public sector. The remaining 78 per cent of requests were from private sector employees for whom the Employee Ombudsman had no statutory function. So that was still the case.

I went to have a look at the 2013-14 annual report of the Employee Ombudsman, which was prepared by Ms Stephanie Burke as the acting ombudsman, and it answered the question as to why, given that this was tabled in September and the Fair Work Bill introduced in this house in November by the Minister for Industrial Relations, he had not reported to the parliament on the most recent information from that annual report, namely 2013-14.

Unsurprisingly, when one reads the report, it is very thin. One of the reasons for that is that it outlines that, notwithstanding there had been attached to the annual report the statistical data and the composition of the nature of complaints, in the last financial year's annual report it appears on page 9 that the statistical summary of the Office of the Employee Ombudsman would not be provided because, in fact, the computer system had crashed and there had been an upgrade of the computer system apparently as a result of that, and they had lost all the data and some information could not be retrieved, and the best they could do was to keep a manual record until the new system was in place. From that, they had a statistical summary where they thought they had approximately 2,000 new calls for assistance, but any other data in relation to that was not available.

So, we have a very thin report and it seems that that is the answer as to why the Attorney-General slipped over the fact in his second reading that he was giving us data that was two years old. However, in any event, the position is clear: the workload of this group continues, and there was a near $472,000 cost in operating this entity with the acting commissioner and four employees in the preceding financial year ending 30 June 2014. It obviously has little work to do within its jurisdiction—and I am not suggesting they are all sitting down there behind their desks doing nothing. It seems that they are referring on a number of inquiries to the relevant authorities.

I noticed on the website of the Employee Ombudsman it says that, if you are unhappy with your work arrangements, you can get in touch with them. It does not actually define anywhere immediately obvious that, if you are a private employee, in fact you are to go off to other parties. Further along in the website that is identified, so perhaps they like being a referral agency, I do not know but, in any event, they clearly do not have the workload to do, and so it is the government's intention that they be abolished.

The other embarrassing aspect for the government is that the former employee ombudsman, Mr Stephen Brennan, in the earlier part of 2013, stood down from his employment on the basis that he had been a branch secretary of a national textile union and had been arrested after the union reported an alleged misuse of union funds earlier that year. Doubtless, he had to go to the minister and explain what had happened but, just days before the election this year, this story broke in the newspapers telling us that this had been the case; that is, he had been charged and that, even though he had stood down from his duties for some 10 months or so before the election, the charges were laid on the eve of the election.

During that time, notwithstanding being stood down from his position, which I assume to have been on a voluntary basis, he continued to pick up his $140,000 a year salary, and the Minister for Industrial Relations, who obviously took the view that he would not be able to discharge his duties for some time, had indicated at least publicly that it might be a time for the ombudsman to consider resigning from the position. He did not. That case continues.

In fact, in September of this year, it came back before the courts on the 32 counts of dishonest dealing, which has now been upgraded. Since 26 September 2014, the DPP has now laid embezzlement and theft charges against the ombudsman and obviously it is at a very serious level. I cannot be certain as to the extent of the number of charges, but there were at that stage 67 counts of fraud. As I say, they have now been upgraded.

The situation is very embarrassing for the government. The Employee Ombudsman is still there. He has not been into work since May 2013, but he is still being paid. He is still charged, now at an upgraded level, and so unsurprisingly this is a very embarrassing situation. That will follow its normal course through the courts, but it seems rather peculiar, to me anyway, that the government have been so silent in respect of the information surrounding this and have taken their time to abolish a position, if in fact they were satisfied that this work has not been undertaken at least for the last nearly two years where the ombudsman is continuing to be paid whilst under a cloud of criminal charges.

The second matter relates to the Industrial Relations Commission, and in this bill it is proposed that there will be an amendment to remove the requirement that the full court hearings include a commissioner. It is presented by the Minister for Industrial Relations as an amendment to give flexibility to the president to determine the number of commissioners to be on the panel. The president is Judge Hannon, and deputy president Judge McCusker and deputy president Bartel also comprise members of the commission. The two commissioners are Mr Steel and Mr McMahon.

As has been indicated, Mr Steel is to retire this month and, unsurprisingly, the indication by the government that they would not be replacing the commissioner has justified them, they say, in coming to the parliament to therefore change the terms of the commission. Obviously, if a situation were to occur where Mr McMahon gave a decision and there were to be a three-member commission convened for the purposes of reviewing Mr McMahon's determination, given that the rule requires a commissioner to be a member of the full commission hearing, which would have to be himself, he could not review his own decisions.

The alternative is, of course, that Mr Steel, upon his retirement, should be replaced and, if he is, whether the government follows the convention of the commissioner replacing Mr Steel as being one with some experience in respect of the business and employment world. That, unsurprisingly, has caused some tension amongst stakeholders about whether it is appropriate that they be left either with no representative on the commission or, in the alternative, with only an employee representative or nominee, in that sense. That issue does need to be resolved.

It is not surprising, of course, that already rumours have circulated as to who is to be appointed as a deputy president of the commission. My local Bragg constituent, the Hon. Don Farrell—I do not think he ever votes for me, but he is always welcome to live in my electorate—has of course been touted to be appointed. That does not really surprise me, of course. He does not have a job anymore.

He lost his spot in the Senate after he had done so wonderfully in allowing Penny Wong to take No. 1 on the ticket. It was such an act of chivalry, of course, and I suppose he has to be rewarded because his little attempt to come into the state parliament was sabotaged by the Premier's edict that he was not to come into the state parliament. I suppose he has to have something to do and it would not surprise me if it is intended that he be appointed.

But it just does not sit right, does it, that the government would rush in this bill and not mention in the second reading speech Mr Steel's intention to retire. It only becomes clear later on. Then we find out that there is movement to restructure, not for this flexibility nonsense but, in fact, to deal with the opportunity of accommodating their mates. The world has not changed in here, has it? It just never ceases to amaze me.

That is a matter that we do need to consider and, if the Industrial Relations Commission is to continue in its function, obviously we cannot have a situation where the composition of the full commission is compromised, but we do need to have some assurances from the government in respect of what is going to be happening for the representation on the commission and who it is they intend to make appointments for.

It is clear that it is up to the government. They are entitled to make these decisions. It is not within the purview of the parliament, but let us be honest about it. Do not come in here rushing something in at the end of the parliamentary session and ask us to acquiesce in its consideration for its early resolution and then not tell us the whole truth, because that is just not acceptable.

It always raises even more concern about the government's bona fides in respect of these matters. This is a bill to get rid of a major embarrassment for the government—namely, Mr Brennan—and probably to make space for one of their other mates. No doubt it will get its passage through this house. We will see what happens in the other place.

The Hon. P. Caica: Thank God, Vickie, you've finished.

The SPEAKER: The member for Colton is called to order merely so that his interjection could be recorded in Hansard. The member for Hartley.

Mr TARZIA (Hartley) (11:28): I have a hypothetical question to start off my submission today: what does one have to do to get the sack under this government? I am happy to support the second reading of the bill in this house, but we on this side of the chamber will reserve our position on possible amendments and the third reading until after the bill is reintroduced in February next year.

In regard to Stephen Brennan, it is fair to say that the Office of the Employee Ombudsman has been mired in disgrace in recent times. The office was supposed to protect workers who were not members of unions in the private sector. What did the Labor Party do? It appointed a former union boss, Stephen Brennan, to run this particular office, and he was appointed not only once but twice by the government—once in 2006 and then in 2012.

The Labor Party, through its support of the commonwealth's Fair Work Act and Mr Brennan's alleged corruption, has certainly undermined the public's faith in the role of this ombudsman. It was supposed to be such an important role and do fundamental work for the transparency of this area.

What has Mr Brennan done? He has been charged with not one or two but 67 counts of fraud-related charges—67—and received a salary of some $140,000 or so while in that role, and I believe he is still being paid. Taxpayers' money is being frittered away. It is being frittered away on Mr Brennan while he faces criminal charges.

It is not as if he is unwell or otherwise unable to perform his duties as a public official: he is simply, it is fair to say, a Labor stooge looked after by his Labor mates. Mr Rau has asked Mr Brennan to consider resignation, but I understand that as he has not been convicted of these offences there has been a refusal to sack him, despite 67 counts.

I note here that a number of stakeholder groups have backed the bill, including the Law Society. In relation to the composition of the full commission, the Law Society actually supports the proposed amendments, as it says it will assist in providing access to justice for litigants as greater flexibility will be available to the president of the commission to allow for the full commission to be more easily constituted.

In relation to the Industrial Relations Commission, the bill allows the government not to reappoint another commissioner to the commission after the retirement of David Steel this month. It is crucial that the composition of the new IRC has a commissioner from an employer group in order to provide balance to the IRC; it is important that balance is provided for. I note that section 39 has been vehemently opposed by groups like Business SA. I understand that the president of the IR Commission has close connections to the Labor Party, and I understand from what I am told that Karen Hannon was the Labor candidate for Adelaide in 1998.

The SPEAKER: You are correct.

Mr TARZIA: Thank you, sir. Sometimes, sir. The bill seeks to abolish the Office of the Employee Ombudsman and also to make changes to the requirements for constitution of the full commission to the IR Commission. The function of the ombudsman was, as I was referring to, originally designed for the former industrial relations system, where the state still had responsibility over the private sector. The intent was for that ombudsman to protect the interests of those workers in the private sector who were not members of unions. It is important that we protect workers who are not part of unions, as well as those who are.

Since the transfer of responsibility for the private sector to the national industrial relations system, the Employee Ombudsman has only had responsibility for the public sector and, I believe, local government. The budgeted cost for the Office of the Employee Ombudsman in 2014-15 was some $507,000, for 5.3 full-time employees. At this stage, several stakeholders have responded in relation to consultation on this bill, and I note that Business SA, WIA, AHA, MTA and the MBA stakeholders support the abolition of the position currently.

The current Industrial Relations Commission is comprised of the president, two deputy presidents and two commissioners. I am told that one of the two commissioners, David Steel, is retiring in December 2014. I commend the bill to the house, but I do note that we will on this side of the chamber reserve our position on possible amendments and the third reading until after the bill is reintroduced in February next year.

Mr KNOLL (Schubert) (11:33): I too rise to cautiously support the bill. It is, as has been said, a bill in two parts, the first of which is a hangover from the award modernisation process, as I understand it, where we seek to abolish the Employee Ombudsman and allow the commonwealth's Fair Work Ombudsman to take over jurisdiction of many of those matters—as has happened already.

Any measure seeking to streamline government and to help reduce the deficit is something that we on this side of the house applaud. There certainly need to be more of these measures put to parliament. I think our record on this over this term of government so far has been pretty good. We, as the loyal opposition, try to do what we can to alleviate the burden that exists on many South Australians as a result of this Labor government's inability to rein in its budget.

I have experienced both the Fair Work Ombudsman and the Industrial Relations Commission in my former life. The first part of this bill, relating to the abolition of the state Employee Ombudsman and allowing the commonwealth Fair Work Ombudsman to do its work, is a very good thing. The work of the Fair Work Ombudsman, from my firsthand experience, is quite impressive. In the times that I have had to be involved in the process, it was quite heartening to see the informal approach, the balanced approach, that the ombudsman and the mediator took, the quick way in which these things were resolved—and I think that is a very important part of the process.

The process was also extremely inexpensive and professional. I have to say that going through these processes is never easy and, indeed, the circumstances that generally bring around disputes between employers and employees is one where relationships are difficult and strained, and often as a result of some fairly difficult, murky and complex circumstances. The ability of an ombudsman to jump into the middle of that mess and to make a professional and concerted effort to reach a conciliated outcome is difficult, and it is one that I really do applaud. I applaud the Fair Work Ombudsman's record on this, certainly in my experience.

Disputes are resolved and can be conducted by employees and business owners themselves, and I think that is important. Not to 'lawyer bash' but a lot of the time with these matters it is the length of process and the investment of time that both sides take that leads to more protracted and difficult negotiations. Where a dispute resolution process is able to be conducted quickly and thoroughly and concluded quickly, you are more likely to get a balanced outcome that does not have both sides digging their heels in simply because they have come this far and they may as well go the rest of the process. That is certainly something that the Fair Work Ombudsman pushes, that early stage conciliation outcomes are pushed, and I think that is an extremely important thing.

I am a huge fan of this process. We often talk in this place about this mythical beast known as red tape—this thing that we all hate and rail against, that we very often struggle to identify in discrete opportunities and in discrete terms. The work of the Fair Work Ombudsman and the ability that they have to resolve disputes quickly is an example of where red tape is kept to a minimum, where it is kept at an appropriate level where the process is professional and thorough but not a process where it is drawn out and causes undue attention by either party to the dispute.

In industrial relations there are real disputes. There are vexatious employees, there are poor and unscrupulous employers, and there are people on both sides of these disputes who do not do themselves justice and they give rise to our needing to have strong legislation in this area to be able to mediate those disputes.

I also recognise that employers are in a position of power in a lot of instances. Having avenues like this for employees to be able to take disputes to is extremely important in making sure that there is balance and parity in the way that employee-employer relations are conducted, and they need to have a mechanism to work through that. They also need a mechanism to get at the heart and the truth of the matter as opposed to merely the 'he said-she said' that tends to evolve in a lot of instances. This part of the bill I wholeheartedly support. The Liberal Party room supports it with certain reservations that we will discuss if they come to fruition in the other place.

The second part of the bill is an entirely different proposition. It seeks to change the make-up of the Industrial Relations Commission. My experience with the Industrial Relations Commission has not been as favourable, and it is amazing how a process that should otherwise be similar and complementary can lead to such a different outcome, a different experience, where the Industrial Relations Commission, in my view, is a much more bureaucratic process.

I pulled out the latest report of the Industrial Relations Commission and had a look at it. In 2013-14, 42 per cent of the claims (or 141 claims) were closed by consent at the commission stage; that is, at an early stage conciliation process, where both parties agree to settle the matter. Forty-eight per cent of the claims were closed by consent at the court stage; that is, where you go through the process of having a conciliation conference and then move onto a court process, but before the court process is finalised both parties, at that stage, agree to some sort of settlement. In 2013-14, only 10 per cent of claims (or 35 out of the 337 claims) were determined by the court.

Can I say, though, that the difference I found between the Fair Work Ombudsman and the Industrial Relations Commission is that, in the Fair Work Ombudsman's case, the ability to settle a claim is based around a mediator being able to make an assessment and go to both or either of the parties and say, 'I think that your position is weak. I think that you need to either abandon this claim or you need to settle this claim at a minimal cost to the other party.'

Having said that, I can say that my experiences with the Industrial Relations Commission are anything but. In discussions with some of my industrial colleagues, I understand that over 90 per cent of cases are found in favour of the employee. Basically, what that says to me is that at either the conciliation or at the court stage, by consent of both parties, the employer decides, 'It's not worth the hassle or the money to take this any further, and basically I'm going to pay whatever it takes to get the case closed and sent away.'

I had an experience in one case of what I will term a vexatious litigant, where I understand that we were about the third or fourth time this person had taken their employer to the Industrial Relations Commission. As an apprentice, this person took on an apprenticeship with this business and was at work for only 40 per cent of the time and, after 12 months of trying to deal with it, finally that person was terminated and then sought an unfair dismissal claim in the Industrial Relations Commission.

Even though that person had been at work for only 40 per cent of the time, even though there were documented warnings in a documented process that had been gone through to terminate the employee—all that was agreed as being very much within the realms of proper process to resolve a dispute like this—there was one piece of paperwork that was not filled in, and that was the paperwork that let the Training and Skills Commission (TAS) know prior to the termination that this employee was being terminated.

When an employee is an apprentice, what has to happen is that, before that employee is terminated, TAS needs to be notified that the apprenticeship is going to be terminated. Because that singular process was not followed, basically it was suggested, 'Well, you haven't ticked every single box, therefore you're going to have to pay money. Really, if you take this any further, we're going to be looking at these costs, you're going to be looking at this time delay. How much is it worth to you to make this thing go away?'

What I found extremely frustrating throughout all of that process was that the bureaucracy was used to favour one party over the other, that the process was used to favour one party over the other, as opposed to the spirit, which is very much the way I believe the Fair Work Ombudsman goes about things: they look at the spirit of the case and say, 'Is there a genuine claim here? Has the employer been unscrupulous, have they done the wrong thing and, if so, deal with it? Or is it a case where the employee is making a claim that is probably not as merit-based as it could be?

In the case of the Industrial Relations Commission, the onus is always back on the employer to have every box ticked, and there is very little scrutiny on the employee at the early stage of the claim. It is not a case where you say, 'I've listened to your side, I've listened to their side and, on balance, I probably think that you've got a stronger case, they've got a weaker case, or vice versa. This is what I think.' It is a case where they say, 'I'm not going to judge the validity of the claim that's before me, except to say, 'If you want to take this any further, go ahead, but you're going to be done over anyway, because the vast majority of claims are found in favour of the employee. Therefore, how much is it worth to you to make this thing go away?'

Throughout that process, not once is it ever mentioned what the true cost of the claim is. Not once is there ever an undertaking taken to try to understand what the true cost of the claim is, whether that be hardship to the employee, whether that be lost entitlements. Whatever it is, we are never dealing with reality.

What we are talking about is two parties who understand a negotiation process where it is not worth what it is worth in a true sense, or in a meritorious sense: it is what it is worth to make this thing go away, and I find that extremely frustrating and disgusting. I also understand that there is a fee that is paid by employees when they make a claim. I do understand that in the vast majority of cases this fee is then refunded through the settlement to the employee.

I understand that there should be a mechanism for that, and I am not disputing the need to have that mechanism in place because genuine claimants need to have the ability to bring cases forward without there being a strong financial penalty on them to do so. I support that wholeheartedly, but it is the way that the legislation is interpreted that I find means that vexatious claims are made and that people realise that it is a low-risk process for the employee to be involved with and a very high-risk process for the employer to be involved with. I think that is where the imbalance comes about.

The legislation we are talking about today seeks, I think, to create a further imbalance. It has been identified to us that the retiring commissioner is of an employer background, and I would hate to see the balance of the Industrial Relations Commission changed. We need there to be balance. We need for business to be able to grow and prosper in this state for there to be balance in this process so that we can look to—as the Fair Work Ombudsman's process does—reducing the amount of red tape and burden.

My comments today may be from one particular point of view, and that is my experience. But can I say that I am not here to be a shill for employer organisations; I am here to try to find the truth. I have seen firsthand what happens to employees when employers do not do the right thing. I have seen businesses in my industry that really do not do right by their people, and these processes are so necessary to hold these people to account. Having said that, we need to find better mechanisms to differentiate between those employers and the ones who are doing the right thing because what we are doing for that minority that does the wrong thing is creating a burden and unfair platform for the vast majority of employers who do the right thing and genuinely try to look after their employees and follow proper process.

With the proroguing of parliament, I very much look forward to the Governor's speech next year and our impending Address in Reply speeches, where we are undoubtedly going to talk about wanting to promote business in South Australia. I think we have seen the Premier come out and admit that the Labor Party has not always been the best friend of business and that maybe they need to repair that relationship. Can I say to members opposite that helping to redress the imbalance in the industrial relations system is one way that the government can be more of a friend to business.

It is not about taking away rights and obligations; it is about creating a process that is quicker, fairer, more balanced, more unbiased, and leads to better outcomes. It is only through that that we are really going to give business the real on-the-ground incentives and confidence to be able to grow, prosper and create more jobs, as opposed to mere rhetoric. We have seen that mere rhetoric has done very little to inspire business to invest in South Australia over the past decade.

To conclude, we are supporting this bill. I am very happy to support it at this stage, and I have very much enjoyed the opportunity to highlight some of the issues that I see in this process as we in this place work towards the betterment of the people of South Australia.

Mr PISONI (Unley) (11:48): I too speak to allow the passage of this bill through the House of Assembly. In doing so, I wanted to make the house aware of some circumstances, whether they be coincidental or deliberate, and of some experiences I have had with the Employee Ombudsman over the years. The function of the Employee Ombudsman was originally designed for the former industrial relations system when the state still had responsibility for the private sector. The intention was that the Employee Ombudsman protect the interests of workers in the private sector who were not members of unions, and it used to work very well.

I can recall that in my own business I employed a French polisher who had a very nasty experience with a previous employer. That particular employee was from a non English-speaking background and not really able to challenge the former employer. I was very keen to help him get justice in this situation so we engaged the office. I am pleased to report to the house that we got a very good result and that several thousand dollars in underpaid wages were returned to the employee. My competitor, if you like, was not too happy with my involvement, but justice is justice and fairness is fairness, and it was a fantastic example of the office working well in dealing with such a matter.

We know that since the transfer of responsibility of the private sector to the national industrial relations system for all employees, bar those on the government payroll and those working for local government, that the commonwealth Fair Work Ombudsman now provides a similar service to private sector employees. The government also claims that there are various free and low-cost legal services available to the public and private sector employees. This office has a budget for 2014-15 of $507,000 or 5.3 full-time staff.

However, when the report of the Ombudsman came out earlier this year I questioned the Minister for Industrial Relations why it was that media reports were telling us that Mr Brennan, the Employee Ombudsman, was still on the government payroll and still receiving a salary since May 2013 after the South Australian/Tasmanian branch of the textile union took civil action against Mr Brennan for misappropriation of funds. It claimed that up to $180,000 had been defrauded from members between 1999 and 2004, just two years before Mr Brennan was appointed.

Mr Brennan, of course, did not appear on the list of employees, staff and administration under section 4 of the report. We saw Stephanie Burke, the Acting Employee Ombudsman, listed as an employee, and Andrew Farrell, who I believe is the brother of the infamous Don Farrell, a former senator and also the brother of Leonie Farrell, who is a deputy president of the Workers Compensation Tribunal—it is a nice little industry the Farrells have there, isn't it?

Ms Chapman: A family business.

Mr PISONI: A family business—appointments to government positions. I have also been made aware that not long after Mr Brennan stood down on full pay he was seen at a training course with Andrew Farrell. That is yet to be verified, but it is certainly information that has been given to me by those who attended that training course.

That raises other questions, of course, as to what sort of an organisation this is, run by this government. Was Mr Brennan's training course paid for by the government or by the taxpayers? What was he training for—was it a long and prosperous future as the state Employee Ombudsman or was it some other matter that he was training for?

I made reference to Leonie Farrell being appointed as a deputy president of the Workers Compensation Tribunal but, of course, we do have a balance in the government when it comes to appointments. The Farrell family is very closely associated with the right wing of the Labor Party and, of course, Stephen Lieschke was also a deputy president of that very same organisation, so we have a balance of the left and the right when it comes to the Labor Party appointments in those prized legal positions in South Australia.

Something else that pops up that would be of interest to members of the house is that Stephen Brennan was actually first appointed to a six-year term in 2006. What is interesting, according to media reports, is that Mr Brennan, who was secretary of the SA branch of the national textile union from 1991 (so for 16 years)—the SA branch merged with the New South Wales branch—

The SPEAKER: The Textile Clothing and Footwear Union (TCF).

Mr PISONI: Thank you very much, sir. It merged with the New South Wales branch in 2006. Oh, and guess what? Mr Brennan was appointed to the position of Employee Ombudsman in 2006. Isn't that convenient? A very convenient appointment. So there was obviously some deal, which is how any layperson would read that. There may very well have been some deal: 'Look, we're having trouble. We know our membership is dropping off. Manufacturing is moving offshore. You don't have as many members but, look, you will have to merge because we have to consolidate our numbers on the floor of the Labor Party convention and make sure that we control the unruly right wing of the Labor Party.'

Even that is a questionable proposition because we know that the Tasmanian union was split between joining the left and the right. I think half of them joined the left and the other half joined the right, then back in 2012 I think there was some debate about whether they should shift allegiances to the right after initially joining the left. It is a very complex proposition. Of course, appointing Mr Brennan in 2006, at almost exactly the same time that his position was abolished in South Australia, was a very good way of managing union politics. The only problem is that the taxpaying people of South Australia got the bill.

Did they get value? Let me talk about an experience I had with the Employee Ombudsman back in October 2011. Those who have been in this house for some time will remember this particular story where the government was using children, who were under the age of 18, to go into delicatessens to ask for cigarettes. On radio, an officer of the Department for Health was asked a question by Leon Byner, 'Do you pay the children?' and the health bureaucrat said:

It's a volunteer scheme…we give them a gift voucher as a…return for their efforts…they're strictly not employees of the Department of Health, no.

I wrote to Mr Brennan to get clarification as to whether that was a legal act of the Department for Health. I wrote to Mr Brennan on 5 October 2011. I said:

I write regarding comments made by Minister Hill on radio this morning about young people employed by SA Health to attempt to buy cigarettes and test retailers' compliance with the ban on sales to minors.

On ABC radio the Minister claimed:

'We will be paying them whatever is appropriate to pay young people of that age to go into retail outlets and attempt to buy cigarettes, this was done in the past.'

I wish to advise you of previous claims about a similar scheme made by [a bureaucrat] on behalf of the Health Department on the 22nd of April 2008. [The bureaucrat's] comments suggest that these young people were employed in breach of South Australian industrial law.

Then there is that part of that interview with Leon Byner that I read earlier.

I ask if you can investigate [the bureaucrat's] claims that there has been a practice of giving gift vouchers to volunteers in the Health Department and if this practice is ongoing.

My understanding of industrial law in South Australia is that the statutes are limited to six years for those who have been underpaid to seek remedy.

I ask that an audit be conducted of those student volunteers, or others, who have accepted gift vouchers in 'return for their efforts' and any underpayment be immediately reimbursed by the Department.

About a week to 10 days after that I did in fact get a response from the Employee Ombudsman. The Employee Ombudsman said:

Thank you for your recent correspondence.

I appreciate your decision to raise with the Employee Ombudsman…the issue of arrangements between SA Health and young people associated with compliance assessments at retail outlets selling cigarettes.

I will in the near future be writing to the department asking them to explain the advice they have received in relation to this arrangement.

Provisionally, it is my considered opinion that this practice raises a number of questions in the context of workplace relations, occupational safety and ethical conduct.

I will be pleased to provide you with an update on this issue in due course.

This letter was dated 14 October 2011, and I am yet to receive a reply, an update, to that investigation. This was three years ago that I wrote to the Employee Ombudsman. He promised me that he would report back his investigation. I do not even know whether he actually did write to the Department for Health or the minister to seek clarification about just what were the workplace practices for these underage stinger agents in the Department for Health.

I think it is fair to say that the position of Employee Ombudsman became untenable when this government decided it was going to be a place that would reward union hacks, who for some reason may have lost their position either through a factional brawl or through some other changes in the union movement that required the amalgamation of state branches with other branches, meaning fewer people working and fewer jobs available in the union movement. This government for years has been compliant in throwing taxpayers' money to union hacks, union staff members, to enable them to continue the standard of living that they have become accustomed to through their high union salaries, on to the public sector.

It is extraordinary, of course, and it seems, certainly to any outsider listening to this debate, that the government is in fact throwing the bathwater out with the baby in dealing with this. They obviously have a—

Mr Goldsworthy: It's throwing the baby out with the bathwater.

Mr PISONI: That is exactly the way I wanted to say it. They have a situation where they have the Employee Ombudsman, who is in an untenable position, still being paid an extraordinary salary of what would be about twice the average weekly earnings of anybody out there in the community in South Australia—being paid to do nothing. There is no obligation to serve the public, no obligation to even reply to my letter of three years ago, updating me on the outcome of his investigation into the use of underage stingers with the Department for Health.

It is a typical Labor Party response: rather than hold somebody responsible, hold somebody to account. What was the due diligence done? We all know that unions talk to each other. This is how the Labor Party established itself, this is how they do deals. When this guy was first appointed, did not anybody ask, 'Well, look, we're taking a risk here'? He has been running this organisation for 16 years, and he started at age 24: did not anybody ask questions within the organisation as to whether there was any concerns about this person being given this position? I would say that the answer was no, because they were much more interested in doing the deal with the New South Wales branch for harmony on the conference floor than there was in getting the right outcome for South Australian employees.

I think the fact that this position will be abolished still leaves the question: will Mr Brennan be paid out for the remainder of his six-year term, another four years of salary? Will that happen? Will the government put a mechanism in place to perhaps suspend any payment, subject to the outcome of the court case or the charges against Mr Brennan? I think we all live in a society where we all believe that people are innocent until proven guilty, but we do need to have a safety net in place to protect taxpayers' money. It would be untenable for this man to receive four years' salary and be found guilty of these charges and be able to keep that money; or the government spending money to try to recover those costs after the event.

I ask the Attorney-General whether he has considered some mechanism to be attached to this bill that would safeguard taxpayers' money in this case. We know it is an unusual situation. We know you cannot sack the Employee Ombudsman. Maybe that is the reason why you are getting rid of his—

Mr Knoll: You can, actually.

Mr PISONI: You can do it through a parliamentary process, and I do not think we were even asked to consider that, but we need to remember that Mr Brennan has been on full pay since May 2013, charges were laid in March 2014 and Mr Brennan has continued to receive his money. Basically, within 12 months of a six-year contract, South Australian taxpayers have not received any service or any benefit for the money that this man has been receiving.

On that note, I will leave those questions for the minister, whether he has given that some consideration, and, if he does not cover that in his reply to the second reading, maybe we can ask him those questions in committee.

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) (12:06): I thank those members who have contributed to the debate. I understand that there are a couple of issues here. This is a very simple piece of legislation which is intended to remedy a couple of matters which, in my view, are pretty self-evident. First, as to the matter of the position of the industrial commission, I am advised that the situation at present is as follows, and for those who are interested in this matter, here is the answer to the questions you have asked or were about to ask.

Commissioner McMahon, who is the surviving commissioner, has six matters either reserved for publication of a decision or yet to be heard. With the departure of Commissioner Steel, by reason of his age, Commissioner McMahon is likely to hear and decide an increasing number of matters. Therefore, given the fact that the composition of a full bench presently requires the inclusion of a commissioner, we have a problem; and we are seeking to rectify that problem in advance of it actually presenting itself.

The most expedient way to do that is to make it possible for a full bench to be composed of people who are not necessarily a commissioner but it can include deputy presidents. That will not involve us spending any more taxpayers' money, member for Unley, or appointing anybody to sit around for a large amount of time doing nothing at considerable expense to the taxpayer. It will mean that we are getting better value out of existing people because we will be making existing people have an additional office.

Mr Pisoni: What happens to Brennan's salary?

The Hon. J.R. RAU: Hang on, I'm not talking about him. I will get to that in a minute. That addresses the first point.

As to the second point, the member for Unley gave us a fairly lengthy dissertation, a sort of conspiracy theory. It reminded me of an occasion many years ago. I cannot remember exactly where it was, but I was overseas somewhere and there was a middle-aged American couple and the gentleman (who wore a pineapple shirt, a large camera around his neck and a hat with USS-something or other written on it) explained to me—I am not going to attempt to impersonate the accent—that the thing we had to watch out for was one-world government, and he then started to explain how the one-world government conspiracy was working its way around and had I noticed the volcanoes going off here and this and that and it all fitted together. I was not able to speak to him long enough to hear his version on trade unions and the illuminati. I can assure the member for Unley that he is worried unnecessarily, and I will go to the specific questions he has asked.

First of all, Mr Brennan is charged with offences. He has not been convicted of anything, and it would not be appropriate in my opinion for me to be prejudging that matter by coming to the parliament and seeking the resolution of both houses of parliament to remove him for proven misbehaviour in circumstances where there has been no proven misbehaviour. I have not done that because it is not appropriate for me to do that.

The second point is: what is the effect of the abolition of the job? The effect of the abolition of the job is, in my view, that the job no longer exists and any balance of tenure also does not exist; it is eliminated. Can I also say to the member for Unley, who invites me to actually find some way to ensure that there is no payout, as recently as the last week we were in here, and as recently as perhaps only seconds ago in another place, another bill in which I have sought to abolish another role, and in which I did insert a provision that did exactly that, has been the subject of criticism from your colleagues and from crossbenchers who say, 'How dare you interfere with anything?'

I am making the point, member for Unley, if you want that clause in, you got it. 'Anything you want, you got it.' That is a song, by the way. Anything you want on that score, you got it; okay? If you want to get your colleagues to insert it in other bills, you got it. To your request, the answer is yes, you got it, if you want it. The point is basically this: as far as I am concerned, if the position is abolished, given the fact that it is a statutory office, there is nothing for this person to do and that is an end to it, but I can assure the member for Unley that, if he wants that made even clearer, I am happy to oblige him.

Mr Pisoni: Well, you do it. First you need to put the amendments in.

The Hon. J.R. RAU: Well, I tell you what: I will put the amendments in. If the member for Unley can stand up here today in the committee stage and assure me that his party will support that in the other place, I would be happy to oblige him. In fact, we can move it in the other place together. The member for Unley and I can sit there and sing Kumbaya as one of each of our friends gets up and moves and seconds it, because I am fine with that—I am absolutely fine with that.

The other point I wanted to make was that, if the member for Unley is so offended by the notion that this person is continuing to draw a salary—and he points out how long he has been drawing a salary and how little he has been doing during that period—I am going to make another offer to the member for Unley. Here come the steak knives: I will ask my colleagues in the upper house to assist with the passage of this bill forthwith. As soon as we pass it here, I will ask my colleagues in the other place, in deference to the pleas of the member for Unley, which I have heard, acknowledge and agree with, to pass it straight away. We can get it through today, and I can have it gazetted on Thursday, so there is a challenge. It is all there. We are absolutely ready to go.

I have hopefully been able to assuage all of those concerns the member for Unley has about this. We will be able to move this quickly, if the member for Unley just speaks to his colleagues in the upper house and says to them, 'This is obvious.' It is obvious to the member for Unley. Whether that means it is equally obvious to some of the people in the other place is a bit hard to say because I have had different experiences with them but, if the member for Unley can convince them of that, he will have my complete cooperation and support. The government will assist in passing this bill this week. I cannot do better than that. How helpful can a person be?

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 5 passed.

Clause 6.

Ms CHAPMAN: This is the proposed reform with respect to the number of commissioners that are to be and the composition of commissioners under the Full Commission of the Industrial Court. At present, we have the imminent retirement of Commissioner Steel and, as the Attorney has explained, this is to accommodate the continued operation of the commission to deal with the circumstance where the remaining commissioner could not, of course, have his own appeals heard and therefore it needs amendment. My question is: have you had any discussions with representatives of the business community, and, if so, what is their view on these matters? I will say that I had asked for a list of consultation with employers and employees on this matter and it has not been forthcoming, when I had a briefing which otherwise was kindly provided on 24 November.

The Hon. J.R. RAU: The answer to the question is: I have not discussed this particular problem with employers or, I guess, for that matter, employees. We are presented with a technical problem here, which is that we are required to have a commissioner as well as deputy presidents on a bench. It is probably also worth mentioning that since the changes that had been made to the industrial relations scheme in this country by the former Howard government in WorkChoices, the residue of matters that still remain in the state system are essentially Public Service matters, whether that be state government or local government.

Therefore, to be speaking to employers about Public Service matters is really, I would have thought, not pertinent because they have no particular stake in that matter. The employers are local government and the state government, so there are no employers as such to be spoken to, other than the state government, which obviously supports this because we want this thing to be functional. Have I sat down and talked to local government at length about it? No, because I assume local government, like the state government, wants to be able to have a final resolution of any dispute that might require an appeal bench. So, that is the position with that.

Can I take this opportunity to also say that it is obvious to me, and it should be obvious to all members in this place, that the Industrial Court and commission as it is presently composed is, in some respects, a relic of the system that applied in this state prior to WorkChoices. Sooner or later that has to be modernised and brought into contemporary context. One step in that direction occurred a few weeks ago when this place agreed to establish the South Australian Employment Tribunal. That may well have streams which are able to accommodate some of the functions presently discharged down at the Riverside building, but that is a matter for us to talk about in due course. At the moment, what we are trying to do is ensure that if there is a public sector appeal there is a bench to hear it, that is all.

Ms CHAPMAN: I take it then there has been no consultation, even with the LGA, which is the representative body for the 68 or 69 councils we have in South Australia (the employers)?

The Hon. J.R. RAU: I think that is what I said.

Ms CHAPMAN: No consultation with anybody?

The Hon. J.R. RAU: Can I just make this point: if you are told that, absent any action on your part, within a matter of weeks the possibility of having the arbitration of industrial disputes finally resolved in this state might be completely destroyed and you are given the option, in the short period of time that remains, to bring something to parliament to get approval to fix that up so that we do not run into that unacceptable position, the answer is so obvious, it is like the sun comes up in the morning and goes down in the evening sort of obvious. You do not spend all your time going off and having extensive consultations with people who will eventually grunt and say, 'Well, that's obvious.' Why would you do that? This is a self-evident, obvious, necessary way to prevent us being in the absurd position that we cannot have a matter resolved.

Ms CHAPMAN: Having not consulted with anybody, have any of the groups been in touch with you, Attorney, to indicate their disquiet about you not having an employer representative as per the current scheme under the act? They have certainly been in touch with us.

The Hon. J.R. RAU: Me, personally, no. I cannot imagine why any employer organisation would be interested in the matter except if they were interested in being able to foist a person into a relatively highly paid position where they will spend 60 or 70 per cent of their time doing Sudoku—

Mr Pisoni interjecting:

The Hon. J.R. RAU: —because the actual job does not exist anymore, which I am saying is not a good thing to do. Like the member for Unley, I am concerned about public money being wasted. I am not aware of any employer organisation having a response, and, if they did, it would be a completely irrelevant response because this does not affect them. They are all in the federal system. This is not the federal system.

If what they are doing is saying, 'Oh, an existing commissioner who has a notional connection originally in terms of his appointment to the employer side of the ledger is finishing up and we would like to be able to appoint somebody back into that position,' my response would be (a) that is a completely different conversation and (b) I do acknowledge, understand and appreciate that there was a long-standing arrangement whereby it would be one for you, one for you and one for you. I understand all of that. What I am saying is that we are now at the point where this whole arrangement up there is an historical artefact which is grinding to a halt, and, if we do not do this, it will grind to a halt completely—that is all.

If members of the opposition want to have a conversation about a bigger global reforming issue down there, I can assure them that early in the New Year we will have that conversation. We will have that conversation, in here. All I am trying to do now is fix this problem, that is all.

Ms CHAPMAN: Regarding the intention of the government to replace or add, at this point you say there will be no other appointments made to the Industrial Relations Commission?

The Hon. J.R. RAU: Absolutely; that is my position on this. First of all, there are two things that I intend to do. The first is to remove the requirement for there to be a commissioner, which means that we can have a full bench with deputy presidents. Secondly, if we are running short of deputy presidents, if I can find somebody else who is already an existing judicial officer, or suchlike, who is already appointed and is already getting a salary who does not also have a deputy president's hat to wear, and that person is competent and able to do so, I will give serious consideration to making them a deputy president as well—one or two of them, however many, if necessary. But I do not see that as an end to this. What I am attempting to do is deal with the end of a system which was designed for a completely different time and place. I cannot go on appointing commissioners to sit there and deal with unfair dismissals and industrial disputes in the private sector that they do not hear. That would be silly.

Ms CHAPMAN: When did you appoint the last commissioner to the Industrial Relations Commission?

The Hon. J.R. RAU: It certainly was not in my time as minister. I am told 2008, 2009, something like that, so it is quite a while. There is absolutely no call for the appointment of a commissioner. The only thing I am trying to do here is stop us having to have a commissioner on the full bench, which will mean that we can use deputy presidents. If I run short of deputy presidents, I am minded to find a person or two people, or whatever, who are already drawing a salary and are not new appointees who have some level of competence in this area and might be able to wear a deputy president's hat on a part-time basis. They might even be, for example, people who are members of the federal commission or a federal tribunal. They do not have to be just state office bearers. That is the way I am looking at it. I am not interested in appointing somebody to a job which I know is not a job which should be—it is just not a big job anymore.

Mr KNOLL: In relation to this clause, there is a separate section 34(3) which provides:

A commissioner must be a person of standing in the community with experience in industrial affairs either through association with the interests of employees or through association with the interests of employers and the number of commissioners of the former class must be equal to, or differ by no more than one from, the number of commissioners of the latter class…

Do the amendments we have made here today conflict with that section of the act?

The Hon. J.R. RAU: An excellent question. I think the answer, is, happily, no. The question is based on the assumption that we are dealing with commissioners. The fact is that with this amendment we actually sidestep the whole issue of commissioners altogether; in effect, we are dealing with deputy presidents for full benches. There is no issue about appointment, and it does not say anything about changes in the composition of the deputy president cohort by reason of retirement. It talks about changes in the cohort of deputy president by reason of appointment.

I do not think anyone in this house, certainly not the member for Schubert, who has hitherto always impressed me as a very sensible person, would suggest that I should appoint someone to a position which all of us here know is not a position that warrants that appointment at the present time, having regard to the amount of work that is there. What I am trying to do is manage the existing system whilst working out how we will actually modernise the whole thing. As I said, that is a conversation we will have in this place next year, in my estimation.

Mr KNOLL: Just to clarify that, at the moment there are a number of commissioners and there is one retiring—

The Hon. J.R. Rau: There are two.

Mr KNOLL: There are two commissioners, and we are then going down to one commissioner? Okay.

Clause passed.

Clause 7.

Mr PISONI: I want to discuss the fate of the five employees who are listed in the Ombudsman's report: the acting Employee Ombudsman, the senior project officer, the client assessment officer, the office coordinator and the administration officer. Are they on contracts that will be immediately terminated after the abolition of the Employee Ombudsman? If so, will those contracts be honoured?

The Hon. J.R. RAU: Again, that is a good question. I am advised there are currently three employees in that area, which is equal to 2.5 full-time equivalents (obviously someone is doing part-time). They are public sector employees so, in effect, they will return to the Attorney-General's Department.

Mr PISONI: Can you clarify exactly what will happen to Mr Brennan and his salary at the abolition of this ombudsman?

The Hon. J.R. RAU: My understanding of the matter is that because he holds a statutory office and is appointed, I believe, by the Governor, upon the abolition of that office the office and all entitlements attached to the office vanish, and that should be an end to the matter. In other words, upon that occurring Mr Brennan ceases to hold that office and ceases to be able to draw a salary.

I picked up in the remarks made by the member for Unley before that the member would like to be more certain about that; I made the point in my earlier remarks that if the member would like to be more certain about that we could add in explicit words saying what I believe to be the case to be the case. I think that would be unnecessary, but I have no objection to doing that. I simply point out that when I tried to do that in respect of another matter only a week or so ago there was serious objection to that in another place and amendments were moved; but I am happy to accommodate the member for Unley on that. If the member for Unley's colleagues in the other place are happy to accept that proposition, it is fine by me.

Mr PISONI: I am still not clear. Will Mr Brennan receive any payout for compensation for the fact that his contract, which is due to expire in 2018, will no longer be valid? Will his wages cease immediately, and he will only be entitled to annual leave, superannuation, up until the date of the secession of the state ombudsman's office—

The Hon. J.R. Rau interjecting:

Mr PISONI: —hang on, let me finish—or will he be entitled to additional payments on top of what he is entitled to under standard industrial relations agreements?

The Hon. J.R. RAU: I think I answered that question in my last answer, so I repeat what I said before: in my view, he is not an employee, he is the holder of a statutory office. Upon the extinguishment of that office by the parliament everything to do with that office disappears, including the entitlement to draw any salary in respect of that position. If he has accrued holidays, or if he has accrued long service leave, or if he has accrued something else, of course that is an entitlement which predates the winding up of the office, and he would be entitled to have those things, but he would not be entitled to have any ongoing payment or compensation whatsoever.

If the member for Unley wants to put that explicitly beyond doubt, I am trying to say to the member for Unley I am fine about that. What I have told you is what I believe to be the case, but if the member for Unley wants that made absolutely clear in whatever piece of legislation passes through here, I am entirely relaxed about that; but, I caution the member for Unley that I tried to do something very much like that a little while ago, just to make it very really clear to everybody what was going on, and I got a lot of pushback somewhere else. If the member for Unley can fix that up, then you will not hear a peep out of me; I do not mind. My understanding is that that is what is going to happen anyway, but if it needs to be put in so many words, that is fine by me, no problem. But the problem is not with me, member for Unley; your problem is with people who sit in your party room—

Mr KNOLL: Point of order.

The Hon. J.R. RAU: —and who presently are disporting themselves on the red leather. That is the problem.

The CHAIR: The member for Schubert has a point of order.

Mr KNOLL: Is it proper that the Attorney is reflecting on other votes of this place?

The CHAIR: He's not reflecting on votes as such. Do you have a question, member for Unley?

Mr PISONI: I do. Are you able, then, to clarify for the committee, minister, whether there is in fact any break clause in Stephen Brennan's contract that enables him to claim additional payments on top of those that had accrued?

The Hon. J.R. RAU: As I understand it, I have not seen the paperwork for Mr Brennan, but as I understand it he has an appointment by the Governor. It appears in the Gazette, it is appointed for a term—that is it. That is my understanding of this.

Mr Pisoni: His term finishes in 2018.

The Hon. J.R. RAU: No; it finishes when his office is wound up. If there stops being a parliament, do you think if they are going to continue to pay you? No.

Mr Pisoni interjecting:

Mr Knoll: That wasn't the Queensland experience.

The Hon. T.R. Kenyon: Don't get all hopeful.

The Hon. J.R. RAU: Don't get hopeful—you're teasing us now. Look, back to the topic: when the music stops, that's it. As far as I am concerned, that's it. All I am trying to say to the member for Unley is that the member for Unley can be as perturbed about this as he likes, but I do not know what more I can do. I can say I honestly believe—and I believe it is the law—that if there is a statutory office, which I believe this to be, and if the person who is occupying the statutory office finds the office abolished, they are not appointed to anything anymore and therefore they are not paid by anybody for doing anything any more. End of story, finish.

If the member for Unley wants to make that even clearer than that, I am okay with that. I am really okay with that, so you do not have to keep asking me these questions. You can solve it if you want to. I am telling you it is okay, but do not take my word for it. Move an amendment up there this afternoon when it gets there. I will support you. Okay?

Mr PISONI: With all due respect, minister, you have not answered the question. Is there a break clause in the contract? Yes or no? It is a pretty simple question.

The Hon. J.R. RAU: I am wondering if I said this in French would it be more comprehensible.

Mr Knoll: Oui.

The Hon. J.R. RAU: Oui.

The CHAIR: 'Oui,' okay.

Mr Knoll: Non.

The Hon. J.R. RAU: 'Non' contract. I am not very good in French, but as far as I know there is no contract. I have not studied Mr Brennan's papers, but as far as I know he was appointed to a statutory office, and that occurs by reason of the Executive Council making a recommendation to the Governor. The Governor says 'Thank you, Executive Council. I'm going to sign this piece of paper.' He signs the piece of paper and the piece of paper then gets stuck on someone's wall. If the office gets abolished—which is what is contemplated here—that piece of paper means you are appointed to something that does not exist, and you do not get paid for being on something that does not exist. That is my understanding of it.

The CHAIR: Is this something that could be cleared up between the houses?

The Hon. J.R. RAU: No.

The CHAIR: Why not? You are only asking for a copy of how he was appointed.

The Hon. J.R. RAU: Sometimes it is hard to clear up stuff like the sun comes up in the morning and goes down in the evening.

The CHAIR: But surely a copy of his contract is enough.

The Hon. J.R. RAU: But there is no contract.

The CHAIR: Okay, that is the point.

The Hon. J.R. RAU: That is my understanding: there is no contract.

Ms CHAPMAN: Has the Attorney even made an inquiry about whether a contract exists? If not, can you do it right now? You have the officer sitting next to you.

The Hon. J.R. RAU: No, I have not because this person—and the member for Bragg knows this—is a statutory office holder.

Ms CHAPMAN: With respect, Attorney, in the other case which you keep trying to bring in as an example of why you would want to obliterate some entitlement in another appointment—

The Hon. J.R. RAU: It clarifies the fact that there is no entitlement.

Ms CHAPMAN: Indeed.

The Hon. J.R. RAU: It is not obliterated: it needs clarifying.

Ms CHAPMAN: Indeed, so the claim here is that Mr Brennan is there and only by way of statutory appointment by a decision of the cabinet which is then undertaken by the Governor.

The Hon. J.R. RAU: That is my understanding.

Ms CHAPMAN: I know. We are about to abolish this and you cannot tell the parliament whether, in fact, there is a contract as well in existence that confirms this six-year appointment.

The Hon. J.R. RAU: I am told there is no contract.

Ms CHAPMAN: Will you make some inquiry about whether there is any other term of appointment to answer the questions that would deal with severance or that payment?

The Hon. J.R. RAU: I will happily ask those questions, and if we can move this thing through I will have the answer between the houses. I make the offer again to the member for Unley that, irrespective of what the answer is to that question, if he wants to put provisions in this which make it absolutely watertight, airtight—

Mr Pisoni: You are in the Hansard guaranteeing that.

The Hon. J.R. RAU: Well, I am making you the offer.

Mr Pisoni: It's on Hansard. You said it.

The Hon. J.R. RAU: Okay, there you go.

Ms CHAPMAN: Aside from the Attorney's smart alec remarks about wanting to insert in the terms of the bill, consistent with what the member for Unley does, you know and I know that they are totally indistinguishable features. Mr Brennan is charged with multiple counts of embezzlement and theft.

The Hon. J.R. Rau: And not guilty.

Ms CHAPMAN: And not guilty of anything, I accept that. I have said that in my contribution—not that you listened. In any event, I do make the point that it is an entirely different situation. All we want to know is whether the appointment and the cessation will have a financial implication. Let's go back to May 2013, when Mr Brennan stood down from this position. My question is: did you ask him to and did you at the time ask him to resign, which is what you are reported in the press to have considered?

The Hon. J.R. RAU: As best I can recall, I did not have any direct conversation with Mr Brennan at all. I believe the chief executive of the Attorney-General's Department had some conversations with Mr Brennan regarding the appropriateness or otherwise of his continuing to act in his office having regard to the fact that there were matters live in the courts, but that is it as far as I know.

Ms CHAPMAN: It has gone off to Hansard, but the quotation I referred to in my second reading contribution was that you had indicated at the time that you considered Mr Brennan should resign—not just stand down, but should resign. Did you ask him to do that at any time?

The Hon. J.R. RAU: I think I just explained that I did not speak to Mr Brennan. If you are asking me now whether I believed that it would have been better for everybody had he made that decision, my answer to that question is: yes, I do, because I do not believe him being in that position and him sitting on a statutory scheme for a period of time and drawing a salary and not performing any function was good for anybody, including his staff. I thought that was a very unsatisfactory position, but did I speak to him about it? No.

Ms CHAPMAN: Having stated publicly that you think he should have resigned, and having acknowledged here today that you think that would have been a good thing to do and not pick up the package of $180,000-odd a year ever since, why did you not ask him to resign? You are asking us to come in here, deal with this legislation quickly, get rid of an obsolete position, including a whole office, some of which will come back into your other part of the Attorney-General's office; I accept that. Why did you not at least ask him to resign? You said publicly that he should, you confirm again here today that he should. Why did you not at least pick up the phone and say, 'Look, mate, I think it's time you went'?

The Hon. J.R. RAU: The lines of reporting for these officers are that they report through the chief executive of the Attorney-General's Department to me. I do not make it my practice to interfere in those lines of reporting; in fact, in the circumstances, I thought my personal intervention in the matter by attempting to canvass what he should or should not do would be unhelpful and ill advised, and I continue to have that view.

The bottom line is this: this bill presents an opportunity for an end to the situation which I think everyone agrees is not desirable, where we have a person occupying a position which, but for either this bill passing or a conviction at some point in the future followed by some action by both houses of parliament, will continue to draw a salary in circumstances where I do not think anybody could possibly see that that is a good thing for anybody. I am simply offering the parliament an opportunity to resolve that matter here and now, this week, immediately.

Ms CHAPMAN: Why then, Attorney, did you make a public statement last year, if it is your view that you should not be interfering with these things, to the effect that he should consider resigning? If you were of that view, why did you not ask your chief executive, if that is the proper line of communication, to follow that up?

The Hon. J.R. RAU: This is really so tangential to what we have in front of us, but the point of the matter is this—

Mr Goldsworthy: It's germane.

The Hon. J.R. RAU: Germane! Hang on, has somebody got a thesaurus? I just want to make this clear: I do not run away from the fact that I think I might have been asked by the member for Bragg or somebody about what I thought about it, and I told everybody what I thought about it. But that is quite different from me picking up the phone and speaking to a statutory officer and, in effect, telling them, in circumstances where I have no capability of doing anything, short of there being a conviction, I guess. Why would I do that?

In any event, rightly or wrongly, I did not, but I made it quite clear when asked. I am not going to run away from the proposition that I think it is really great for a person to be sitting on a well-paid position and not doing anything. No, I do not think that is a good idea. I am not embarrassed about saying that; why should I be?

Ms CHAPMAN: So why have you not done this four years ago, pre the allegations that were being made and upon there being a change to the Fair Work laws to transfer all of the private sector to the federal arena?

The Hon. J.R. RAU: For some of us, things come to us more slowly. The members for Unley and Bragg probably worked this out some time ago. The member for Kavel and I took a little bit longer, but, here we are; we have now worked it out and we also—both of us, the member for Kavel and I—have been struck by the fact that this gentleman has been not acting in his role for some time.

One has to take into account that the position of the office has deteriorated, not for reasons of the 2½ or three employees who are there—they are decent people and they are doing their best; I am not reflecting on them at all—but the general lustre of the position has been, in my opinion, irretrievably damaged by the passage of time since he has been stood down, and that is it.

Mr Goldsworthy interjecting:

The CHAIR: Order! Member for Schubert.

Mr KNOLL: Attorney, are there any current matters before the Employee Ombudsman that will need to be transitioned somewhere else?

Mr Pisoni: Well, there's my matter.

The Hon. J.R. RAU: I am advised that it will depend on exactly when it finishes up. The Attorney-General's Department will discuss matters with those people and whatever needs to be done to accommodate any of those outstanding matters, including possibly the member for Unley's letter, will be attended to.

Clause passed.

Remaining clauses (8 to 17) 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) (12:45): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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