BILLS;Fair Entitlements Guarantee Bill 2012;Second Reading – 26 Nov 2012

I rise to speak on the Fair Entitlements Guarantee Bill 2012. The Gillard government made an election commitment in 2010 to better protect the entitlements of Australian employees impacted by the insolvency or bankruptcy of their employer. I am disappointed that the opposition voted against this bill in the other place and that it is their intention to vote against it here. It just goes to show that the opposition care little about Australian workers who are affected by the failure of the free market system.

The Protecting Workers’ Entitlements package is set to provide the strongest protection of employee entitlements working Australians have ever seen, and I am glad that the Senate is debating this today as the Fair Entitlements Guarantee Bill 2012. The changes in this bill will replace the General Employee Entitlements and Redundancy Scheme, GEERS, which is currently in place.

Losing your job is a situation no Australian worker wants to face. It obviously has a devastating impact on your life, on your family, on your self-esteem and on your economic health. It can affect your ability to pay your rent or your mortgage, and it can affect the education of your children. The situation is made worse when the company that you have worked and sweated hard for fails and you lose not only your job but also sickness pay, long service leave, redundancy, payment in lieu of notice, holiday pay and parts of your superannuation, which are all entitlements.

As a former organiser for the Australian Services Union, I have seen this happen. It is unjust and it is plain wrong. I remember that when Ansett collapsed in September 2001 I was working for the ASU, and the ASU represented around 4,500 Ansett employees. I saw how the collapse had a dramatic impact on the lives of those former Ansett employees. They were owed more than $750 million in employment entitlements, and the battle to reclaim these entitlements was very long and very protracted. While Ansett employees eventually received around $727 million of the money they were owed, they only just last year received their final entitlements payments, some 10 years after Ansett collapsed. No Australian workers should have to face that.

It is wrong that here in the 21st century Australian workers have to face this situation, and it is wrong that those on the other side of the chamber refuse to make the guaranteeing of workers’ entitlements the priority when a company collapses. This bill seeks to rectify this injustice. The bill will provide certainty for Australian employees who find themselves without a job and left out of pocket when their employer becomes insolvent or bankrupt and cannot pay the workers the employment entitlements they are owed. This bill will protect Australian employees under circumstances which are brought about through no fault or choice of their own, and it will ensure that Australian employees who are victims of employers’ insolvency or bankruptcy, where employment entitlements are owed, are supported by a government that actually supports Australian workers.

The Gillard Labor government is introducing a three-part package to enhance the protection of workers’ entitlements. This includes the Fair Entitlements Guarantee we are debating today, the Securing Super package and the strengthening of corporate and taxation law. The Fair Entitlements Guarantee will protect redundancy pay up to a maximum of four weeks for each year of service. This will mean that almost all Australian workers will receive all of the redundancy entitlements they are owed.

The Fair Entitlements Guarantee will replace the former coalition governments GEERS scheme, as I have said. The previous speaker said that he thought this was a name change only and that it was being done for political purposes. Can I say that under GEERS a worker is entitled only to a maximum of 16 weeks redundancy pay even if they have worked for the same company for decades. This means that, under the current GEERS arrangements, approximately one in five eligible workers do not receive their full redundancy entitlements. For workers who have been with the same company for many years or even decades, this could be a difference of tens of thousands of dollars—and, of course, not receiving that money means their futures are changed forever. In contrast, it is estimated that under the Fair Entitlements Guarantee about 97 per cent of eligible workers will receive all the redundancy payments they are owed. However, directors, family members of directors and contractors are also excluded from eligibility.

The Fair Entitlements Guarantee will also cover eligible employees for unpaid wages of up to 13 weeks. It is only right that employees should be covered for unpaid wages. They have done the work; they should be paid. Eligible employees will also be eligible for a payment in lieu of notice capped at five weeks. They have rent or mortgage payments, car repayments and electricity, gas and education costs that do not go away just because the company they worked for has gone bust. A guarantee of payment in lieu of notice will allow them to still meet their bills while searching for alternative employment. Eligible employees will also be covered for unpaid annual leave and long service leave. Assistance will not be provided to support any form of business restructure or where it is expected that there will be funds available to pay the person’s employment entitlements within 112 days.

This bill will allow the Gillard Labor government to enshrine the Fair Entitlements Guarantee in law, and this will improve on GEERS, which is an administrative scheme that can be amended or abolished with the stroke of a pen. The Fair Entitlements Guarantee will cost an additional $60.8 million over four years, and funding for this commitment will be fully offset over the forward estimates, consistent with the Gillard Labor government’s commitment to return the budget to surplus in three years.

Key changes this bill establishes also include removing eligibility requirements associated with deed of company arrangements and mirroring bankruptcy arrangements; extending eligibility for entitlements that crystallise after the appointment of an insolvency practitioner, which is essentially to cover that portion of the entitlement that the insolvency practitioner is not obliged to pay; simplifying transfer of business rules from 1 July 2014; and removing discretion to accept claims that are not made within 12 months of the later of the following events: the end of a person’s employment or the appointment of an insolvency practitioner. The bill includes arrangements for ministerial and/or departmental discretion to be used in a number of specific non-routine circumstances where the act of discretion supports the objects of the bill.

Australians work hard and deserve to know that their wages, superannuation and other entitlements are safe. After years—and, quite often, decades—of working for a company, a worker deserves the certainty of knowing that their entitlements are covered in the unfortunate event of that company going bankrupt. This bill provides greater certainty for affected employees than the current General Employee Entitlements and Redundancy Scheme.

As I have said, the opposition have stated that we are doing this for political purposes. I think we have just seen that there will not be any support for workers should the coalition become the government. All they will do is resurrect Work Choices—and I do not think that will be to the benefit of Australian workers. This bill enshrines Labor’s commitment to the Australian sense of a fair go, and I commend the bill to the Senate.