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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-11-17 Daily Xml
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FAIR WORK (COMMONWEALTH POWERS) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 27 October 2009. Page 3664.)

The Hon. J.A. DARLEY (16:10): I rise to speak briefly on the Fair Work (Commonwealth Powers) Bill and the Statutes Amendment (National Industrial Relations System) Bill. This package of bills is intended to facilitate South Australia's participation in a national system of workplace relations. It forms part of a wider package of bills currently being addressed by the federal parliament in terms of accepting the referral of the participating states and establishing a national system of workplace relations.

There is some dispute about the precise number, but at present approximately 70 to 90 per cent of South Australia's private sector falls under the commonwealth industrial relations system. The remaining 10 to 30 per cent of unincorporated employers and employees remain in the South Australian industrial relations system. The referral of powers to the commonwealth will result in all private sector employers and employees becoming part of a national industrial relations system.

The LGA and the public sector have been precluded from the scope of the referral. As noted by the Minister for Industrial Relations, a national system is intended to alleviate complex jurisdictional questions about which system of industrial relations businesses are operating in and also to provide uniformity and certainty for all employers and employees in regard to their rights and responsibilities.

I am advised that Tasmania and Queensland have already passed legislation in line with South Australia's referral. Victoria is currently considering a new referral bill in line with South Australia's referral, which will effectively result in a re-referral, and Western Australia has decided not to refer its powers but, instead, embark on its own harmonisation approach. More recently, I have been advised that New South Wales has indicated its support for the referral, as well.

As I already mentioned, a national system that covers some 70 to 90 per cent of South Australia's private sector already exists, so we are effectively talking about the remaining 10 to 30 per cent. As I understand it, a large majority of that remaining 10 to 30 per cent is made up of small businesses, and my primary concern relates to any negative impact referral may have on those small businesses in the long term, particularly in regard to the award modernisation process.

Whilst this may be a separate issue to that we are dealing with today, there is an obvious crossover of the two, given that the referral will ultimately result in the remaining private sector falling within the ambit of the award modernisation process. I acknowledge that there will be a one year transitional period and ongoing transitional arrangements for the remaining private sector. However, as I understand it, not a lot of detail is available at the moment regarding all these transitional arrangements, so the full impact of the award modernisation process is still not known.

The minister's office provided me with a summary of the results of a broad comparison between the existing South Australian industrial awards and the draft national system modern awards undertaken by SafeWork SA. These results demonstrate that, in general terms, the South Australian industrial award wage rates and associated loadings are higher than the modern awards, especially when considering ordinary hourly rates and weekend penalty rates.

After allowing for the fact that many state awards have a 20 per cent loading for casuals, whereas the modern awards all will have a 25 per cent loading, the comparison also shows that there are some modern awards in which penalty rates for public holidays and/or weekend work are higher than the South Australian awards.

Overall, I am advised that, in terms of the areas analysed, the comparison demonstrates that modern awards will be broadly compatible with the equivalent South Australian industrial awards. While those awards appear to be useful, they are by no means exhaustive, and they certainly do not take into account all the awards. This becomes evident when you consider the Horticultural Award, which is still being finalised and which has been the subject of great concern in the horticulture industry.

Concerns have been raised with me in regard to this specific issue, and I note that these same concerns have also been raised with my colleague Nick Xenophon at the federal level of parliament. The South Australian horticulture industry has expressed particular concern about the rushed and impractical nature of these changes, particularly given the flexibility required within that industry in terms of working hours and itinerant workers.

Whilst I agree in principle with the idea of one system for all Australians, particularly where this leads to less bureaucratic red tape and greater productivity and efficiency, I would be reluctant to support a move that could negatively affect South Australia's small businesses in the long term. Having said that, I note that Nick Xenophon is working with some of these groups at a federal level with a view to achieving a more viable outcome. As I understand it, he is advocating for a six-month extension of time with respect to the implementation of the horticulture modern award in order to negotiate its provisions further and alleviate the concern surrounding it prior to the remaining South Australian private sector falling within the scope of the national system.

My second concern relates to the exclusion of the public sector and the LGA from the referral. I see no reason why the public sector should be treated any differently from the private sector and distinguishing between the two in this respect. If it is good enough for the private sector to be harmonised at the national level, it should also be good enough for the public sector. I am sure that the minister will not mind me saying that, during a recent briefing, he also acknowledged this as a legitimate concern which will probably need to be addressed in the future. I would like to have seen this issue addressed now rather than later. Again, I am hopeful that the minister will consider this issue further after the new arrangements have been implemented and the government undertakes any further review of state industrial relations legislation.

My last concern relates to the overall details of the scheme and the fact that so many elements are still being finalised, even at the federal level. Legislation as significant as this should have been dealt with in a much more judicious and considered manner. Nevertheless, I am particularly mindful of the need for this legislation to be passed if the national system is to proceed as proposed. I am satisfied that the concerns I have will be able to be addressed at the federal level. For that reason, I will be supporting the passage of the bill.

The Hon. J.S.L. DAWKINS: Mr President, I draw your attention to the state of the council.

A quorum having been formed:

The Hon. A. BRESSINGTON (16:18): I rise briefly to indicate that I will be supporting this bill. I do not do so lightly, but I recognise that the bill will ultimately better position South Australia to have input into the industrial relations of all private sector employers and employees as opposed to the minority which we presently control.

I accept that the national system of industrial relations will provide businesses with less regulatory duplication and will reduce the infamous red tape and that, ultimately, it will be simpler to comply and administer. Additionally, those businesses and their employees on the fringes of what are presently considered constitutional corporations will benefit in knowing precisely which system they operate under and what their rights and obligations are.

I am satisfied that the structure of the reference—particularly the ability of South Australia to terminate the amendment reference—will ensure the state's active participation and ability to influence any future changes to the Fair Work Act in reliance upon the bill's reference. This is the point: this bill sits us back at the table that we were pushed away from by the High Court. This is significant and is enough to garner my support.

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (16:20): I thank members of the council for their contributions to the debate on this historic bill. Members would now be aware of the importance of South Australia's participation in the national system from 1 January 2010 in the manner proposed in this bill. This bill will ensure that South Australia is in a direct position to influence the future industrial relations laws that will apply in our community. It will also ensure that appropriate and comprehensive education information and enforcement services will be provided for the national system in this state.

However, I take this opportunity to respond to a number of issues raised in this debate. The concept of having and retaining a competitive advantage in our industrial relations in this state is a good one, which would have the support of this whole chamber. However, given the small and declining coverage of our state system, the point where that competitive advantage can be supplied by the legal framework in which it operates is long gone; that is, it must be recognised that as much as 80 to 90 per cent of private sector employees and their employers are already covered by the national system.

We have been provided with an overview of the constitutional history of industrial relations since 1901 as part of this debate. However, the key date in the context of these bills is 2006. It was in 2006 that the Howard government used the corporation powers in the Constitution to enact the WorkChoices legislation. A number of states, including South Australia, challenged this legislation in the High Court. They argued that the corporation's power did not extend to the regulation of the relations between a constitutional corporation and its workforce and that its scope must be limited to prevent it conflicting with the industrial arbitration powers and the Constitution. South Australia also presented arguments based on the traditional division of industrial relation law-making powers between the states and the commonwealth. The High Court rejected the state's arguments and upheld the expanded use of the corporation's power.

Whatever may have been the intention of those who established the federation in 1901, in 2006 the then commonwealth government successfully used the corporation powers to expand its jurisdiction to cover the vast majority of South Australian employers and employees in the private sector. The result of this takeover is that as little as 10 to 20 per cent of employers and employees remain in a state system. The capacity to market a different industrial relations system to the business community, based upon our legal framework, is therefore already fundamentally compromised by the use and impact of the corporation powers by the commonwealth, and this cannot be undone.

It is also very important to remember that the use of the corporation power in the industrial relations context does not discriminate between small and big business. If a business is a proprietary company it is already in the national industrial relations system, irrespective of whether it employs one or 100 employees. Indeed, a significant proportion of small business in South Australia is already part of the commonwealth system and it is not possible to have them excluded, given the construction of the Constitution.

In terms of our competitive advantage, South Australia has had and will retain a significant competitive advantage in industrial relations. We have an outstanding record of industrial harmony and cooperation between business and workers on major projects and in the workplace generally. Any suggestion that the retention of marginally different laws for a minority of the community, who would not be involved in the sort of competitive bidding for projects referred to by the opposition in any event, is naive and underestimates the nature of the South Australian community.

What we can do is maximise our influence over the national system by participating in a manner that gives us a significant role in future change and a break on the power of the commonwealth to make regressive changes or to unilaterally expand the system. This is achieved by a combination of the intergovernmental agreement, the particular nature of our referral and our active involvement in local service delivery for the national system.

The Hon. Mr Lawson raised a number of questions regarding the intergovernmental agreement or IGA. The IGA was signed by South Australia, Tasmania, Victoria, the commonwealth, the ACT and the Northern Territory on or about 25 September 2009. Queensland indicated that it intended to subsequently sign the intergovernmental agreement and I am advised that its referral bill, based almost entirely on the approach outlined in this bill, was passed in the Queensland parliament last week. I also add at this point that the Tasmanian bill to refer powers was passed some weeks ago, and in all likelihood the New South Wales government will also participate.

The honourable member also suggested that we should become a mirroring or cooperating state. However, this would produce a somewhat curious result for someone urging a states' rights agenda. Three levels of participation in the national system are recognised in the IGA: referring states (those that refer power to the commonwealth and the territories), mirroring jurisdictions (states that enact mirror legislation substantially consistent with the Fair Work Act over time) and cooperating jurisdictions (states that commit to forms of cooperation and harmonisation over time but do not enact referral of power or mirror legislation).

Jurisdictions will have different rights in the system, depending on their level of participation. For example, the commonwealth will genuinely consult referring states about proposed amendments in accordance with a procedure set out in the IGA. In addition, only referring states have a right to vote on proposed changes to the national laws. Further, the commonwealth is obliged by the IGA to give genuine consideration to any proposals of referring states and to provide written reasons for its response to such proposals.

Referring states will also be able to formally raise issues relating to service delivery within the national system. However, the commonwealth is only obliged to notify mirroring jurisdictions about amendments and will merely report amendments to cooperating jurisdictions. If we followed the Hon. Mr Lawson's approach, we would lose the capacity to have any influence on future policy frameworks and on any future changes to the national system. If we choose to be a cooperating state, future changes to the national system, which would apply to the vast majority of South Australian employers and employees irrespective of any referral, would be determined by the commonwealth and the referring states—Queensland, Victoria, Tasmania and possibly New South Wales—with the South Australian government merely being informed of the changes once they had been determined.

A referral bill contains limitations upon the amendments the commonwealth can make using our referral. The capacity to terminate the amendment reference in certain circumstances, while retaining the laws and arrangements that apply at that time, represents a significant factor that will help to ensure that the commonwealth continues to genuinely involve South Australia in the development and administration of the national system while retaining a genuine national system. This balances the need for a genuine break on the commonwealth's powers with the need for legal certainty for parties or in the context of constitutional limitations. This approach is being considered and has been adopted by most other states, with the exception of Western Australia.

Some issues have been raised regarding the alleged impact of the commonwealth Fair Work Act 2009, in particular the alleged costs of the new modern awards. It should be recognised that these awards are still being finalised by the Australian Industrial Relations Commission, and most of the more recent changes to the request for that work, including the request to revisit the horticultural award, as issued by the Deputy Prime Minister (Hon. Julia Gillard MP), and the changes announced by the commission itself, have been undertaken to better recognise the circumstances of the employers in many industries.

Further, comprehensive transitional arrangements have been introduced that will operate for up to five years for those already in the national system. In that regard I note that questions were raised by the shadow minister in another place and referred to by the Hon. Mr Lawson in this chamber regarding the cost impact of modern awards upon a particular small retailer. First, as I have indicated already, the government does not accept the broad proposition about these additional costs. Secondly, the question that needs to be asked in this context is whether a shop is a constitutional corporation—in other words, a proprietary company. If it is a constitutional corporation is it already in the national system and not affected by this referral? This is the question that every employer currently needs to ask to work out which system they are in: state or federal.

With the referral they will no longer need to consider the issue or seek legal advice in order to understand their rights and obligations. If the shop is a partnership, trust or non-incorporated entity, and therefore in the state system, the question remains: should we be supporting the different industrial arrangements for businesses based solely on how they are legally established from time to time?

Even if that does not concern the honourable member, it is inconceivable that in the medium and longer terms different basic minimum standards can or should exist between businesses and employees working in the same locations based solely on how the business has been established from time to time. In any event, as I will outline shortly, the transition for South Australian employers will be facilitated in a number of ways. It should also be noted that the modern awards will apply to the 80 to 90 per cent of the private sector already in the system. It is also highly likely that when finalised these new standards would be applied under our state awards in the event that the referral of powers does not take place.

The Hon. Mr Lawson raised the issue of South Australian employers' incapacity to match Sydney rates of pay. Historically, national minimum standards have always been highly influential on this state, with federal awards operating in South Australia for more than the past 50 years. Accepted industry standards generally flow on to state-based awards, meaning that decisions by other state or federal tribunals have always had an impact on our state awards. Some examples include national awards such as the National Building and Construction Industry Award, the Vehicle Industry Repair Service and Retail Award, the Transport Workers Award and the Metal Industry Award, where national rates and conditions were directly reflected into state awards.

Another example of where national standards have flowed into the state system include parental leave, carers leave and the so-called termination, change and redundancy standards. This means that South Australia cannot effectively isolate itself from national standards, even if that were considered desirable. The differential in wages that has existed between Sydney, Melbourne and Adelaide, for example, will continue in the over award payments, as has always been the case.

I am also advised that it is intended that the commonwealth laws will provide an additional transitional arrangement to the parties being referred, including interim recognition of their existing state awards and agreements and the capacity, after 1 January 2010, to approach Fair Work Australia to further amend the proposed modern awards to recognise their particular circumstances. Within this context it should also be noted that state minimum award rates are currently higher than federal minimum rates in many areas and, whilst historically the rates have been more consistent, this fact, along with the 12 months additional transitional period, will ease the transition for both employers and employees in this state.

Further, as part of the service delivery agreement with the commonwealth, SafeWork SA officers will undertake transitional educational visits—10,000 over three years—specifically to inform employers of their responsibilities as they transition into the national system. The government expects that these will be particularly targeted at the small businesses that would be making that transition. It is also proposed that our state agencies—including the Industrial Relations Court and Commission, and SafeWork SA, including its regional network in particular—will be utilised as part of the national system in a manner that is cost effective to both jurisdictions.

Suggestions have been made that the national system's approach to unfair dismissal would impact negatively upon small business. On the contrary, from that perspective there are many advantages in the national system for employers, particularly for small businesses that will be referred, including the special unfair dismissal regime specifically designed to recognise the needs of small business. There are no special arrangements for small business in the state system, with all dismissed employees generally entitled to lodge an unfair dismissal claim. The exceptions are those who are on a probationary period that has been agreed with the employee before commencement, and which the commission considers is of a reasonable length. Generally, three months is considered reasonable.

The national system established special rules for small businesses of less than 15 employees currently full-time equivalents and, after 1 January 2011, 15 employees on a head count. Employees must have completed a 12 month qualifying period of service in the national system before they can lodge an unfair dismissal claim, and a dismissal will be deemed to be fair if the employer has complied with the Small Business Fair Dismissal Code. There is also a reduced period for a dismissed employee to apply: 14 days as opposed to 21 in the state system.

The Hon. Mr Lawson suggested that the South Australian Industrial Relations Commission was being retained merely to service the public sector and local government sector. However, this ignores the fact that the national industrial relations system would still rely upon continuing state law in many areas for the private sector, and this law requires the state tribunal to administer certain aspects. These laws will include occupational health, safety and welfare (including the resolution of bullying complaints), child employment, training and skills development, outworkers, and dispute resolution under the state industrial referral agreements legislation.

The Industrial Relations Commission will be run on a cost-efficient basis in partnership with the commonwealth; that is, the commonwealth will meet some of the costs of our continuing state commission by making a contribution to meet the salary costs of those members who will undertake some work for Fair Work Australia as dual appointees.

In terms of the retention of the public sector and local government in our state system, the government acknowledges that there are different views on the matter. What is clear is that this is consistent with the 'Forward with fairness' framework in which we have been operating, which emphasises one system for the private sector. Further, the nature of our referral will ensure jurisdictional certainty for all parties, a key policy objective for all parties that have expressed views on this matter.

Some speakers have suggested that this is about the government keeping a competitive advantage for itself; however, that ignores the fact that this approach has been strongly supported by the unions that represent the employees who are affected. The arrangements also make the most efficient use of those state agencies and institutions that must be retained to administer continuing state laws in any event.

Some members have mentioned that we should try to isolate larger businesses or areas from the non-government community services sector and refer them only to the commonwealth. It is simply not feasible to part-refer the private sector and/or the non-government community services sector, as this would simply create new questions of jurisdictional uncertainty and would involve South Australia being considered a non-referring state in terms of the intergovernmental agreement and other matters, with the consequential loss of any genuine influence and involvement in the national system.

Issues have been raised about what was said to be the transfer of TransAdelaide and the SA Water Corporation to the commonwealth system. Ideally, all of the public sector would have remained or returned to the state system. However, many government business enterprises are likely to be trading corporations and, therefore, may already fall within the commonwealth system of industrial relations.

The commonwealth has agreed with us that GBEs that are clearly established for a public purpose may be declared not to be part of the federal system. These declarations are contained in the provisions of the related statutes amendment bill. However, these GBEs that are clearly constitutional corporations and are operating within areas subject to nominated national competition policy areas (that is, rail, ports, water and electricity, for example) will by agreement between all jurisdictions remain in the federal system.

SA Water and TransAdelaide clearly meet these criteria and, therefore, are not included in the list of GBEs being declared not to be national system employers through this referral process. TransAdelaide and SA Water, in effect, already currently operate in the federal system of industrial relations and have had federal awards and agreements for many years. Further, in terms of the concerns raised by Mr Hood about the impact on the employees, I can advise that the unions representing the workers at these agencies have been consulted throughout this process and support remaining in the federal system.

In response to the Hon. Mr Hood's question regarding the status of this state's outworker legislation, I can confirm that the South Australian laws relating to outworkers are not affected by the referral and that this state was instrumental in ensuring that the capacity to regulate in this sector remained within the state jurisdiction. This is achieved by division 2 of the existing Fair Work Act 2009 and is reinforced by the referral bill which confirms that the power in relation to South Australia's outworkers laws is not being referred to the commonwealth.

Mr Hood also raised the issue of working conditions for taxi drivers. The government acknowledges the concerns raised by the honourable member and, as the council would be aware, a number of measures have already been initiated to lift the standards within the industry, including those applying to the drivers themselves. These have included the establishment of the Premier's Taxi Council in 2002 and the increase in driver representation on that council in 2008, moves by the Taxi Council SA to establish a taxi driver welfare committee in 2008, and the work of the parliamentary select committee on the taxi industry.

Most importantly for present purposes, I am advised that taxi drivers are generally not considered to be employees for the purpose of the South Australian Fair Work Act 1994 or the Commonwealth Fair Work Act 2009 and, subsequently, are not affected by the referral. Section 4(1) of the state act excludes non-employment contracts that are made for taxi drivers from being deemed to be contracts of employment, and the commonwealth act applies only to contracts of employment. As a result, any proposal for regulation at a state level that might arise from the parliamentary select committee or otherwise would not be compromised by this referral.

It has been suggested that the consultation process for these bills was limited. On the contrary, the Industrial Relations Advisory Committee (which includes most major industry and union groups) has been extensively consulted through the almost two years leading to that point. Many other key groups have also been directly consulted and the issues canvassed by the bill have been in the public arena now for many months. This has included detailed consultation on the detail of the national laws as they were being developed and the various policy elements that have ultimately led to the bills presently before parliament.

Whilst it is true that at some times these groups were given confidential access to draft bills which, as you would expect, could not be distributed, almost all of the consultation afforded the opportunity for these groups to discuss the proposed decisions with their members and to bring back informed views. In fact, they were encouraged to do so and many have actively participated in the consultation process. Indeed, changes to the bills were made as a result of that consultation.

Further, and of significance, is that, since the government announced its intention in June this year and introduced the detailed legislation in September, there has not been any submission or correspondence to minister Caica or the relevant agencies suggesting that the referral not proceed as now proposed. To accept the referral of industrial relations powers to the private sector provided for in this bill I am also advised that the commonwealth minister introduced a bill to the commonwealth parliament on 21 October 2009. The commonwealth bill accepts our referral in the form that is now proposed to this council and makes technical, transitional and other necessary changes to the Fair Work Act 2009. These include changes to that act as sought by South Australia in order to ensure that the state's interests are fully represented within the national system.

In view of the urgency associated with the passage of this bill I do not intend to go over all the points raised during the debate but simply reiterate the importance of a national IR system for the private sector to the employers and employees of this state. Again, I thank members for their contribution and urge the council to support the bill.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. R.D. LAWSON: Will the minister indicate when it is proposed that this bill will come into operation?

The Hon. P. HOLLOWAY: It is the government's intention to proclaim this bill to operate as soon possible (that is, as soon as it is passed) but, obviously, it will not have practical effect until the commonwealth legislation is enacted, and I believe that is due to come into effect on 1 January next year.

The Hon. R.D. LAWSON: I notice that the Fair Work Amendment (State Referrals and Other Measures) Bill, in the commonwealth parliament, was referred to a parliamentary committee, which tabled its report yesterday in the commonwealth parliament. In relation to this highly complex legislation, bearing in mind that the explanatory memorandum itself to the commonwealth legislation is some 70 pages, can the minister indicate to the committee what were the recommendations contained in the report of the parliamentary committee tabled yesterday in Canberra?

The Hon. P. HOLLOWAY: I am advised that there were minority and majority reports. I understand that the majority report supported the legislation as proposed. The minority report, which was essentially the opposition party, as I understand it, raised two concerns: first, that it gives too much power to the states as a result of the intergovernmental agreement and the capacity to terminate the amendment reference whilst remaining a reference state; and, secondly, that the potential to terminate the amendment reference could easily lead to different minimum standards applying in the community.

I think one could perhaps make the comment that those statements by the federal opposition that this bill gives too much power to the states appears in direct opposition to the fears expressed by those members in this place that this legislation would, in fact, give away the states' powers. Obviously, the federal opposition felt that it was the reverse. So, I just note that fact.

In relation to the bit about the argument in the minority report that the potential to terminate the amendment reference could easily lead to different minimum standards, I point out that the likelihood of using an amendment reference termination is not simply a question of whim or political convenience. There are important checks and balances that would ensure that this power is exercised with care. I point out to the committee that they include the following. The intergovernmental agreement establishes a process where these issues will, in almost all cases, be resolved at an intergovernment level. The focus is upon whether a change to the commonwealth legislation that has been proposed represents a breach of the agreed fundamental principles of the national system, and these are set out in clause 4 of our bill. It is not simply a question as to whether the state and territory governments support the detail of the proposed change.

The decision to terminate the amendment reference is also one that would not be taken lightly. The Governor, who would act upon the advice of Executive Council, is required to declare that the amendment would breach the agreed national principles and that proclamation would be subject to potential judicial review should it, in the very unlikely event, ever be issued without sufficient foundation.

The termination of the amendment reference would also mean that it would again be necessary to classify businesses as being a national system, constitutional corporations or referred employers, and this very undesirable outcome would need to be considered by any government and weighed against the need to object to the changes before choosing that course of action.

The decision to terminate the reference would also require that the government of the day consult with the parliament. Not only is this required by clause 9(3) of the bill but it would be necessary to have parliament approve an amendment to the legislation to reactivate the amendment reference for the future or to make some other referral arrangements. As a result, the existence of the amendment termination provisions is likely to ensure that future governments work cooperatively to maintain the national system. The termination is a realistic option but would be contemplated only in extreme circumstances. In the event that a future government wanted to undermine the national system, it could and probably would withdraw the referral in its entirety.

The Hon. R.D. LAWSON: It was suggested in the minister's contribution that New South Wales, in all likelihood, will refer its powers under this scheme, notwithstanding the fact that prior announcements from New South Wales ministers suggested otherwise. Can the minister indicate to the committee what is the basis of his claim that in all likelihood that state will refer its powers?

The Hon. P. HOLLOWAY: I understand that the New South Wales government made a submission to the senate inquiry, which has only recently reported, as mentioned by the honourable member. My advice is that New South Wales has indicated that it is still working on the referral. I believe that the Senate submission made it clear that it was actively exploring the question of referral. So, while it clearly has not made a decision yet, it is the government's view, based on its indication to the Senate submission—and it was on that basis that I made those comments in my concluding remarks—that it is likely that New South Wales would refer.

The Hon. R.D. LAWSON: Does the minister agree that if New South Wales does not refer, as Western Australia has indicated that it will not be referring, it would perhaps have been better to wait until there is a commitment from the New South Wales government, not merely material submitted to a parliamentary committee, to verify that this will be truly a national system and that two of the economic powerhouses of the country will not be omitted from it?

The Hon. P. HOLLOWAY: I would suggest that if South Australia passes this legislation that would further encourage New South Wales. Certainly, its indication is that it is actively considering it, and we believe that the action of this parliament in passing this bill is more likely to bring about a national system than if we were not to pass it.

The Hon. R.D. LAWSON: During the minister's contribution earlier today, as well as the contribution from the Hon. John Darley, mention was made of the horticulture award. Can the minister indicate to the committee what arrangements are proposed relating to horticulture workers?

The Hon. P. HOLLOWAY: I thank the honourable member for his question. My advice is that the national award—the modern award, if you like—has been finalised. The national award will apply to those already in the system. I understand that the Australian commission has invited further submissions on the draft of that national award and has announced transitional arrangements which would see a six month delay in the application of that award. There would be a further four and a half years of transition. I am also advised that those for whom the state award currently applies would effectively stay on that state award for at least a 12 month period before they would transition to the new national award.

The Hon. R.D. LAWSON: Can the minister indicate whether those transitional arrangements are the same in terms of the time—four and a half years and 12 months—as applied to the shop assistants?

The Hon. P. HOLLOWAY: My advice is that the Australian commission has handed down a model transition that will apply unless it is persuaded for some exceptional circumstances. So, it has handed down the model transition, and I believe that will apply basically to all the awards it has currently finalised.

The Hon. R.D. LAWSON: Can I clarify that the widely reported fact that the retail awards had particular transition arrangements because of the large number of retail workers who were employed in small unincorporated businesses is not true and that retail workers will enjoy the same transition provisions as apply to other awards?

The Hon. P. HOLLOWAY: My advice is that those retail workers would stay on their current award for 12 months and then they would revert to the national award, including its transitional arrangements.

The Hon. R.D. LAWSON: Minister, you mentioned that there are certain areas that would remain within the jurisdiction of the South Australian commission, as I understood your proposal, in relation to all South Australian employers, matters such as bullying and outworkers, and I think you mentioned a number of other areas.

The Hon. P. HOLLOWAY: Occupational health and safety, welfare, state industrial referral arrangements and others.

The Hon. R.D. LAWSON: Why is it that those matters should be the province of the South Australian commission when all other aspects of employment will be the province of the federal commission or fair work legislation?

The Hon. P. HOLLOWAY: Essentially, this is legislation is about removing uncertainty between the two systems. Clearly, as I indicated earlier, you do have the problem where certain businesses, depending on their construction, whether they are constitutional corporations or partnerships, etc., can be in the same industry in the same circumstances but possibly subject to either state or federal systems.

Clearly, there is a need to remove that uncertainty, but the federal laws do not purport to apply to matters such as occupational health and safety, welfare and all those other areas that I indicated, so they will remain under state law and they are not being referred. As I said, the commonwealth does not seek to take responsibility for such matters.

The Hon. R.D. LAWSON: Does that mean that an employee, all of whose terms of employment are governed by the federal system, will still go to the state system to make a complaint about workplace bullying and that Fair Work Australia will have no jurisdiction in relation to that?

The Hon. P. HOLLOWAY: My advice is that bullying is under the South Australian occupational health and safety act. However, it should be pointed out that, under the effective operation of the system, if this bill is carried there will be a joint service provision, so that SafeWork SA would be dealing with matters effectively under both acts.

Clause passed.

Remaining clauses (2 to 9), schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (17:05): I move:

That this bill be now read a third time.

The Hon. R.D. LAWSON (17:05): I think it is a sad day for South Australia when we are abandoning our capacity to have an industrial relations system that is tailored to the needs of the state. I think we have been used as a pawn in this particular issue. As I mentioned earlier, Western Australia announced that it will not be participating. The New South Wales government has not yet made any commitment to participate in the scheme. What the government is doing here is pushing us into passing this legislation in the hope that we will force New South Wales to also participate.

I recall some years ago that the Hon. John Della Bosca told me that New South Wales would never abandon its own industrial relations system; not over his dead body nor the dead bodies of many others, he said. I believe that is still the attitude of the New South Wales government. So, we are not going to have a national system at all.

It is a pity that we do not exercise our independence in the same way as the Western Australian government has done. Nobody can say, for example, that Western Australia is a backward state industrially or in any other way. What we are doing here is depriving South Australian enterprises of opportunities.

It may be true, as the minister said, that, presently, most South Australian businesses, certainly of any significant size, are already incorporated and already subject to commonwealth laws, but that is not to say that proprietary companies or other constitutional corporations will remain the preferred model for business enterprises.

At the moment, South Australian enterprises have an opportunity to choose a particular structure to suit their particular needs, and those needs may include industrial issues. That choice will be taken away from them, so we are removing an important choice that already exists. This legislation really is a deal made between large employers, large national employers, and large national unions. It happens to suit them.

The Labor states have fallen into line because they believe that they have fashioned a deal that will prevent a future non-Labor government federally from unwinding provisions or imposing provisions they do not like. They believe that they have built enough escape clauses into this, so they have fashioned a scheme they think is win-win for the interests of Labor.

However, this is just the old industrial relations club, as it is so often termed, which is the big end of town and big unions making arrangements that simply do not take account of the needs of small business. Small business is being crushed yet again.

When this bill was introduced, the minister in another place said, and I think the minister here repeated, that by participating we will ensure that South Australia has 'a significant and ongoing say in the industrial laws that will apply in our community'—a significant and ongoing say. We will be little old South Australia at a table at which larger states and the commonwealth are sitting. We will have virtually no say, unless we happen to be speaking in tune with others at the table.

By this device, South Australia is losing its capacity to have its own industrial relations system, yet we are only half undoing the system. For industrial and political reasons, the government has decided that the public sector will remain with the South Australian commission. We heard today the minister say that the South Australian commission, which would be virtually devoid of work, will be given these odds and sods issues of bullying outworkers, child employment and occupational health and safety.

Occupational health and safety is an important issue, of course, but that is a function of a particular branch of government, not the Industrial Relations Commission itself. So, it is a make-work scheme to ensure that those who are presently in the state commission will continue in their comfortable jobs, notwithstanding the fact that there will be very little for them to do.

The minister said that there had been extensive consultation in relation to this legislation. That is not as I am advised. True it is that there is an advisory committee, which, incidentally, does not include much say from small business or unincorporated business—not from farmers out in the bush, not from country employers, etc.

However, the advisory committee was not truly advisory. It received information from the minister and the minister's office about the way in which matters were going. Members of the advisory committee were not able to take away copies of bills or consult with all their wider membership. When the minister says that the bill has been in the public arena for many months, it is simply not the case.

As I mentioned earlier, the commonwealth report on this was tabled in federal parliament only yesterday. The explanatory memorandum relating to the legislation in the federal parliament was introduced only a relatively short time ago, and it has not yet fully passed. The bill was first introduced into this parliament only on 9 September. So, we reject the notion that there has been wide consultation on the bill; in fact, it has been a secretive process to stitch up the deal to which I referred.

As I indicated at the outset, we know where the numbers are, and some members have expressed opposition. I am delighted that Family First has also expressed opposition to this bill. It has taken a principled stance on the matter—the stance that the Liberal Party has taken. As I mentioned earlier, it is a sad day for South Australia, especially for small business in this state.

The Hon. B.V. FINNIGAN (17:13): I was not intending to make a contribution on the third reading, but the sheer hypocrisy and audacity of members of the opposition compel a response. The entire reason we have the bills before us relating to referral of powers to the commonwealth in relation to IR can be summed up in one word: WorkChoices.

The federal Liberal government, under John Howard, effectively nullified and castrated the state industrial relations system by using the corporations power to legislate for a national IR system, which was (regrettably, in my view) upheld by the High Court.

Where was the Hon. Mr Lawson—the great state's rightist—when the Howard government was trashing the state industrial relations system? Where was the Hon. Mr Lawson when he used the corporations power to decide that the federal government could legislate for IR for all corporations, which is the vast majority of employees?

The Hon. R.D. Lawson interjecting:

The PRESIDENT: Order! I remind the Hon. Mr Lawson that he was listened to in silence.

The Hon. B.V. FINNIGAN: We see yet again that the Liberal opposition has surrendered any claim to economic credibility and any claim to being an alternative government of this state. We see yet again the complete hypocrisy of the Liberals, with their federal colleagues saying one thing and the state Liberals saying another.

The Senate committee inquiry into the relevant federal bill said that the problem with it is that it gives too much power to the states. Yet here is the Hon. Mr Lawson saying, 'This is the end of South Australia as we know it. It's taking away the state's power—this terrible, draconian plot by the Labor government, the unions and big business, getting into bed together and ruining the constitutional power of South Australia.' Yet, his colleagues in Canberra are saying that the problem with this whole system is that it gives too much power to the states. Why are they saying that? Because they are the ones who brought in this system. The Liberal Party effectively ended state industrial relations systems for the vast majority of employers in the private sector when it brought in WorkChoices. These bills do not get rid of the state industrial relations system, and there will still be a large number of state and local employees who will be covered by the state system, and that will ensure that the commission has more than enough work to do.

However, the ruin of the state industrial relations system for private sector employees was brought about by the Liberal Party and, here it is, claiming that it is all some conspiracy between the ACTU or big unions and big employers. The Hon. Mr Lawson referred to the industrial relations club. Well, we know the industrial relations club that came up with WorkChoices—it was the Business Council, it was ACCI, it was some senior private law firms who actually wrote the legislation. It is one of the only times that legislation has been written by private sector law firms to suit the interests of private sector big business. So, we know who the club was that drafted that legislation. We know whose interest that was there to serve. It is because of that WorkChoices legislation and the High Court decision that upheld it that we have before us now the legislation—

Members interjecting:

The PRESIDENT: Order!

The Hon. B.V. FINNIGAN: —which refers powers to the commonwealth in relation to industrial relations.

Let us just recognise the hypocrisy and the absurd position—the position with no credibility or substance—that the Liberal opposition has taken. Suddenly, it is the great states' righter. Members opposite were as silent as the grave when John Howard was trashing the Constitution, taking away the powers of the states, using the corporation's power to completely nullify the role that the state industrial relations systems had in the corporate sector. They were as silent as the grave then but, now, suddenly, they are the great defenders of the states. They are the great states' righters. We all know that that is a complete furphy. It is hypocrisy. It is an absolute charade, and it should be recognised for what it is.

The council divided on the third reading:

AYES (10)
Bressington, A. Darley, J.A. Finnigan, B.V.
Gago, G.E. Gazzola, J.M. Holloway, P. (teller)
Hunter, I.K. Parnell, M. Wortley, R.P.
Zollo, C.
NOES (9)
Brokenshire, R.L. Dawkins, J.S.L. Hood, D.G.E.
Lawson, R.D. (teller) Lensink, J.M.A. Lucas, R.I.
Schaefer, C.V. Stephens, T.J. Wade, S.G.
PAIRS (2)
Winderlich, D.N. Ridgway, D.W.

Majority of 1 for the ayes.

Third reading thus carried.

Bill passed.

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