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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-10-13 Daily Xml
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FAIR WORK (COMMONWEALTH POWERS) BILL

Introduction and First Reading

Received from the House of Assembly and read a first time.

Second Reading

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (20:48): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The Fair Work (Commonwealth Powers) Bill 2009 (the Bill) is part of a legislative package of two Bills that will refer power to the Commonwealth to facilitate South Australia's participation in a national system of industrial relations for the private sector from 2010.

Members will recall that on 9 June 2009 the Government publicly announced South Australia's intention to participate in the national system for the private sector from 1 January 2010, subject to the finalisation of a number of issues being resolved with the Commonwealth.

South Australia's private sector participation in the national industrial relations system has been the subject of extensive and detailed consultations with members of the Industrial Relations Advisory Committee and other key stakeholders. There is general support for our participation in the national system and for the proposed text based referral of powers to the Commonwealth.

There are many benefits for South Australians resulting from the referral of IR powers. A streamlined national system of industrial relations will result in significant red tape reductions for business and greater administrative efficiency by eliminating regulatory overlap and duplication. Businesses will no longer have to deal with complex jurisdictional questions about which system of industrial relations they are operating in.

A single set of general industrial relations laws for the private sector, with the retention of significant South Australian based education, information and enforcement services will have a positive impact on employers and employees generally, but particularly on small business, young workers, women, employees with a disability, workers in regional areas, indigenous Australians and workers from culturally and linguistically diverse backgrounds. These were the groups identified by numerous research projects and inquiries to be the most adversely affected by the previous Federal Government's WorkChoices legislation.

This historic Bill is a culmination of many months of multilateral and bilateral discussions with the Commonwealth and other states and territories, and extensive consultations with key South Australian stakeholders.

The package of Bills before the Parliament and the associated inter-governmental agreement are prime examples of what can be achieved by cooperative federalism. This proposal builds upon the reforms to industrial relations initiated since the election of the Commonwealth Government in November 2007 and will ensure that South Australia has a significant and ongoing say in the industrial relations laws that will apply in our community.

The Rudd Government was elected with a commitment to implement its industrial relations policy Forward with Fairness. Forward with Fairness includes the aim of creating a single national system of industrial relations for the private sector.

Many in the community considered major elements of the former Commonwealth Government's WorkChoices legislation to be divisive. The passing of the Commonwealth Fair Work Act 2009 removed the remaining vestiges of WorkChoices, established the national system and represented the cornerstone of a balanced, fair and equitable industrial relations legislative framework.

The previous WorkChoices system also resulted in confusion for many employers and employees given the uncertainty as to whether they were covered by the former Commonwealth legislation. The basis for South Australia's participation in the national system as outlined in this Bill, achieves the key public policy objective of providing certainty for all South Australians regarding their rights and responsibilities in the workplace.

The current Commonwealth industrial relations legislation and the previous WorkChoices legislation relied mainly on the Corporations Power of the Australian Constitution (section 51(20)) to regulate constitutional corporations. Most unincorporated employers and their employees remain in the South Australian industrial relations system. The difficulty has been that for some employers, their status as a constitutional corporation, or not, was not clear and depended upon the view that might by taken by the Courts and Tribunals from time to time.

Section 51(37) of the Australian Constitution provides for State Parliaments to refer powers to the Commonwealth Parliament to make laws in relation to referred matters. This Bill makes use of this constitutional power to refer the making of industrial relations laws for the private sector to the Commonwealth and in so doing to remove this jurisdictional uncertainty.

The Bill will provide for a text-based referral, an amendment reference and a subject matter transition reference to facilitate South Australia's participation in the national system of industrial relations for the private sector. This referral of powers is similar to the most recent Victorian reference of powers to the Commonwealth which is contained in the current Division 2A of the Commonwealth Fair Work Act 2009.

Contained in the Bill is a text-based reference to the Commonwealth that would be adopted in a form that reflects (in general terms) the approach already taken to facilitate the recent Victorian reference. The referred text:

(a) provides for South Australia to be recognised as a 'referring State';

(b) takes into account the provisions of this Bill as they relate to the exclusion of the public sector, local government and any other relevant exclusions (for example, this means that South Australia will still meet the definition of 'referring State' even though our Referral Bill excludes local government); and

(c) applies the Fair Work Act 2009 to South Australian employers and employees who are to be brought into the national industrial relations system on account of the South Australian referral. These provisions extend the existing definitions of 'national system employer' and 'national system employee' to include any employee and any employer in a referring State such as South Australia (except for those excluded from the referral) who would otherwise be outside of those definitions.

The proposed text for the text-based referral is set out in Schedule 1 of the Bill. We anticipate that this will be reflected in the changes to the Commonwealth Fair Work Act 2009 that will be made by the Commonwealth Parliament to accept our referral.

The advantage of this approach is that all of the Fair Work Act 2009 itself does not have to be tabled in the Parliament with this Bill; just the intended text of the Commonwealth Act to accept our referral as appended to this Bill.

The Bill also provides for an amendment reference that will refer power to the Commonwealth to enable it to make amendments with respect to defined subject matters. The definition of 'referred subject matters' for the purposes of the amendment reference generally reflects the main elements of the current national system as contained in the Fair Work Act 2009 including minimum terms and conditions of employment, bargaining, workplace rights and responsibilities, compliance, administration and application of that Act.

To enable the Commonwealth to make laws dealing with the transitional matters arising from the transfer of South Australian employers and employees from the State jurisdiction into the national system this Bill provides for a referral of this power via a transition reference.

It is important that the House appreciate that these subject matter references do not provide a 'blank cheque' to the Commonwealth similar to the original 1996 Victorian reference. Our ongoing role in ensuring that this State's interests are maintained is achieved through a combination of the amendment reference and the termination provisions evident in the Bill.

The amendment reference and termination provisions of this Bill restrict future changes from removing agreed fundamental elements (including the scope) of the national system. These provisions expressly exclude the power to make amendments based on our referral with respect to continuing State law matters that are 'saved' by section 27 of the Fair Work Act 2009 (including occupational health and safety, training and skills development, child labour etc) and with respect to the public sector, local government and any other excluded sectors.

This is achieved by including these matters in the definition of 'excluded subject matter' in the Bill.

The Bill also links the amendment reference limitations to the statutory based governance principles unanimously agreed to by the Workplace Relations Ministers Council on 23 May 2008. A translation of these principles is set out in the definition of the 'fundamental workplace relations principles' as provided in clause 4 of the Bill.

The significance of these principles is that it will permit the amendment reference to be terminated in certain circumstances by South Australia whilst retaining our status as a referring State. This is achieved as follows.

This Bill allows for termination of the references by a proclamation of the South Australian Governor. This is a standard provision in Referral legislation and in general terms a period of six months notice is normally required to be given to the Commonwealth if the State intends to terminate any of its references. Should South Australia do this in isolation from other referring States, and where the agreed national system principles have not been breached, South Australia would no longer be considered to be a referring State under the terms of the Fair Work Act 2009.

However, the Bill also provides for a termination of the amendment reference if the Governor, in the Proclamation giving effect to the termination, declares that, in his/her opinion, the Fair Work Act 2009 has been (or will be) amended in a manner that is inconsistent with one or more of the relevant fundamental workplace relations principles.

The termination of the amendment reference in this context would require three months notice and have the effect that the Commonwealth would not, after the date of effect of the Proclamation, be able to rely on South Australia's referral to enact amendments to the Fair Work Act 2009. Future amendments would not apply to non-constitutional employers and employees in South Australia, pending the resolution of the issues by the Parliament.

Under these provisions the remainder of the South Australian reference would remain intact. This also means that the Fair Work Act 2009, as amended up to the date of the Proclamation would continue to apply to non-constitutional employers and employees in South Australia.

Amendments to the Fair Work Act 2009 to reflect this are set out in Schedule 1 of the Bill.

This means that should a future Commonwealth government make changes to the Fair Work Act 2009 that are not consistent with the basis upon which we have agreed to participate in the national system, South Australia would be in a position to prevent further changes to the system applying to our referred parties until the Parliaments have resolved the issues. Unlike the normal six months notice provision, this approach would avoid the significant disruption, expense and uncertainty that would be caused by a withdrawal from the national system itself.

The Government considers that this approach to the amendment reference supplements the intent of the relevant Inter-Governmental Agreement. It also provides the system with the certainty and flexibility required to maintain a genuine national system into the future. Importantly, this approach also ensures that South Australia's interests are clearly taken into account in any future changes to the Commonwealth legislation.

It is envisaged that if all jurisdictions were meeting their obligations under the Inter-Governmental Agreement, the provisions of this Bill for the termination of the amendment reference (because of inconsistency with the fundamental workplace relations principles) would not need to be applied and in effect would only be contemplated in the most extreme circumstances where the agreed fundamentals of the national system are threatened.

The Bill's provisions relating to the amendment reference would not constrain the Commonwealth from making any minor or technical adjustments to the Fair Work Act 2009 nor from making progressive amendments to build on the fundamental principles into the future. Neither would it constrain the Commonwealth from making amendments to the FW Act that have been developed by the jurisdictions through the consultation and governance processes anticipated by the Inter-Governmental Agreement.

Participation in the national system, in the manner proposed in this Bill, will also ensure that South Australia is in a direct position to influence the future industrial relations laws that will apply in our community and to ensure appropriate and comprehensive education, information and enforcement services will be provided for the national system in this State.

When this package of Bills is enacted, South Australians will have an industrial relations system built on the foundation of a strong safety net, access to collective bargaining (including for the low paid) and protection of workplace rights. The new arrangements will have a positive impact on workers by removing the worst aspects of the previous WorkChoices amendments.

The Commonwealth Government has made special arrangements for small businesses in the unfair dismissal jurisdiction and Fair Work Australia has established a special unit to support small businesses in the new system.

An agreement has also been negotiated between the Fair Work Ombudsman and SafeWork SA to provide for the local delivery of South Australian compliance, education and advisory services. As part of these service delivery arrangements SafeWork SA officers will be undertaking a large number of education visits to workplaces transferring from the state system to the federal jurisdiction over the next three years.

Transitional arrangements and other assistance for those employers and employees transferring to the national system are also currently being finalised between this Government, the Commonwealth and the other referring States. Extensive consultation with local stakeholders on these matters has taken place and will continue. The aim is to provide a smooth transition to the national system, recognising the particular needs of both employers and employees during that process.

South Australia's participation in a national system of industrial relations for the private sector reflects a new era of cooperation with the Commonwealth. Although there have been numerous attempts to achieve a unified system since Federation, this Government has led the way in assisting to create a new, simple, fair and accessible industrial relations system for South Australian employers and employees.

We are proud to take this opportunity for South Australia to participate in a national system of industrial relations for the private sector, while maintaining a contemporary and equitable State system for the public sector and local government.

I commend the Bill to Members.

Explanation of Clauses

1—Short title

This clause is formal.

2—Commencement

The measure will be brought into operation by proclamation.

3—Interpretation

This clause defines certain terms and expressions used in the proposed Act.

4—Fundamental workplace relations principles

This clause is relevant to the operation of clause 9. It is intended to recognise certain principles as being fundamental to the arrangements under which the State is willing to grant a reference under this measure.

5—Reference of matters

This clause provides for the reference of matters to the Commonwealth.

Clause 5(1)(a) provides for the inclusion of the initial referred provisions in a Commonwealth Act enacted in the terms, or substantially in the terms, of the tabled text. The expression "substantially in the terms" of the scheduled text will enable minor adjustments to be made to the text.

Clause 5(1)(b) provides for the reference of the matters within the definition of referred subject matters. This is referred to as the "amendment reference".

Clause 5(1)(c) provides a reference for any necessary transitional provisions associated with the transition from the old industrial relations regime to the regime provided by the Commonwealth Fair Work Act.

Clause 5(2) makes it clear that the reference of a matter has effect only to the extent that the matter is not otherwise within the legislative power of the Commonwealth Parliament and to the extent that the matter is within the legislative power of the State Parliament.

Clause 5(3) removes a possible argument that 1 of the references might be limited by any other of the references.

Clause 5(4) makes it clear that the State Parliament envisages that the Commonwealth Fair Work Act can be amended or affected by Commonwealth legislation enacted in reliance on other powers.

Clause 5(5) specifies the periods during which a reference has effect.

6—Matters excluded from the reference

The following matters are to be excluded from the reference:

(a) matters relating to Ministers, Members of Parliament, judicial officers or members of tribunals established by or under a law of the State;

(b) matters relating to public sector employees;

(c) matters relating to persons engaged as a member of a Minister's personal staff;

(d) matters relating to persons—

(i) appointed under section 68 of the Constitution Act 1934; or

(ii) appointed or engaged by the Governor or a Minister under any other Act, law or authority;

(e) matters relating to persons holding office as Parliamentary officers or employed under the Parliament (Joint Services) Act 1985;

(f) matters relating to persons holding office or employed under the Courts Administration Act 1993;

(g) matters relating to—

(i) members of SA Police under the Police Act 1998; or

(ii) police cadets, police medical officers or special constables; or

(iii) persons employed as protective security officers under the Protective Security Act 2007;

(h) matters relating to local government sector employees.

7—Termination of references

This clause deals with the termination of the period of the references specified under clause 5 (namely, the period ending on a day fixed by the Governor by proclamation). The clause enables the periods of all references to be terminated at the same time or only the periods of any or all of the amendment references.

8—Effect of termination of amendment reference or transition reference before initial reference

This clause makes it clear that the separate termination of the period of the amendment reference does not affect laws already in place. Accordingly, the amendment reference continues to have effect to support those laws unless the period of the initial reference is also terminated.

9—Period for termination of references

As a general proposition, a day fixed for the termination of a reference must be at least 6 months after the day on which the relevant proclamation is published. However, if the termination only relates to the amendment reference and the Governor is acting on account of an assessment that the Commonwealth is acting, or has acted, in a manner that is inconsistent with 1 or more of the fundamental workplace relations principles, the period set for the termination of the amendment reference may be reduced to 3 months. In such a case, the Minister will be required to provide a report to the Parliament relating to the matter.

Schedule 1

This schedule sets out the text for the purposes of the initial reference.

Debate adjourned on motion of Hon. S.G. Wade.

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