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Read all the latest news from Brendan O'Connor MP


September 30, 2016

SUBJECT/S: Penalty Rates; CUB Dispute; Unemployment.

PETER VAN ONSELEN: Shadow Minister for Employment and Workplace relations Brendan O’Connor, he joins us live out of Adelaide. What are you doing in Adelaide, Mr O’Connor? You’re supposed to be Melbourne based.

BRENDAN O'CONNOR, SHADOW MINSITER FOR EMPLYOMENT AND WORKPLACE RELATIONS: Hi. I’m a Federal Shadow Minister and it’s a big country and out of sitting weeks as you know Peter, we like to get around engaging with stakeholders and that’s one of the reasons I’m here.

VAN ONSELEN: Alright, fair enough. I can always look at your diary - I hear Labor doesn’t have any drama with that.

O’CONNOR: And we table all of our travel in the Parliament every six months, you know that.

VAN ONSLEN: Alright, let’s move on.

I want to start by asking you about penalty rates because I know that on your side of the Parliament there has been a lot of talk about penalty rates and what the Government might want to happen, but isn’t it true that if it wasn’t for the amendment to the Fair Work Act that Bill Shorten made when he was the relevant Minister in Government, there wouldn’t even be a look at penalty rates on a four year basis by the Fair Work Commission? That only happens because of that change he made to the legislation?

O’CONNOR: Well it wasn’t a specific measure to look at penalty rates, it was to allow for a review of the Award system and I think that’s important. In fact it has only really been Labor that’s brought down the thousands of Awards to a manageable number. So yes, the Commission is in a position to examine these matters, but the issue is not the mechanism by which the matter is examined, it’s whether in fact the Commission should consider cutting real income for low and middle income earners at a time when wage growth is at its lowest in a generation and we would argue strongly that it shouldn’t be.

VAN ONSLELEN: Sure, but you know my point is, it may have been part of a suite of other changes, but you could have carved out penalty rates from those looking at Awards every four years by the Fair Work Commission. Had that been the case, then there wouldn’t even be this risk that without political intervention from either side that the Fair Work Commission can just maybe make an adjustment to penalty rates?

O’CONNOR: I have to say Labor has said we support the independence of the Commission, but if there is a cut in real income for workers as a result of a decision by the Commission, we will certainly have to examine the way in which these matters are determined. As you know with enterprise bargaining you can’t reduce people’s overall conditions of employment. It would be an unfortunate thing if we saw people’s real income for as I say for low and middle income earners being reduced as a result of an examination of modernising Awards. That’s why we made a submission strenuously arguing that it is not appropriate for people to have real cuts to their pay. We wish the Turnbull Government would join us in supporting our submission but to date, they have chosen not to.

VAN ONSELEN: Would you take another look at that adjustment to the Fair Work Act if Labor wins government and maybe provide that protection for penalty rates not changing by carving it out of what was amended by Bill Shorten?

O’CONNOR: Let’s wait and see what the Fair Work Commission does. As we said, if elected we would have intervened as we have a right on behalf of the Commonwealth and argue against any real reduction. I’m not concerned about penalty rates being altered if overall workers are as well off or better off than they were before if that provides support. And indeed unions bargain with employers to change arrangements including penalty rates. It’s just the idea to see a net loss of income and we are arguing strongly that we don’t’ want that to happen. I think it won’t happen if the government joins Labor and makes a strong submission that at a time when you are seeing wage growth at its lowest since at least 1998, Peter, then the Commission will take that into account.

VAN ONSLEN: I’ve seen some reports about this Carlton & United Brewery dispute, without really being across it frankly, what are the details of this dispute, is it likely to escalate?

O’CONNOR: Look this is a dispute that has gone on for a very long time and we would hope that the parties could sit down and work through the conflict. What’s happened here is that 55 maintenance workers’ functions were outsourced and their conditions of employment and when the contract came up again there was a tender process which allowed for the company to enable another contractor so they could do the work and pay people as little as 40 per cent of their current income. The way they did that was they had 3 casual workers in Perth approve an Enterprise Agreement which had no direct applicability to those workers and use that instrument to win the tendering process. Now, the concern Labor has is if that were to happen across the labour market generally we would see many, many CUB disputes and we will examine whether in fact the laws are sufficiently fair and afford protection for workers so that employers are not able to obviate their employment obligations to their workforce. We are concerned that this dispute would enable employers effectively to escape Award and Enterprise Agreement conditions and we’re going to look at the reasons for this dispute and talk to the employers and unions about what we need to do, as I say, to prevent unfair avoidance of obligations by employers.

VAN ONSELEN: Do you share, on not that issue but the same broader issue on working conditions, the concerns of the union movement around organisations such as Airtasker which I’ve seen getting reported – you know concerns about pay and conditions?

O’CONNOR: Look, again that’s another area – there’s all these new manifestations of employment arrangements. Now, can I say this - We support genuine independent contractors but we’ve never wanted to see a sham contacting arrangement or we’ve never agreed with the proposition that you can find ways to avoid decent obligations to your work force. Now good employers do treat their workforce well. In fact the best employers always have a high regard for their workforce but what happens, Peter, is if there are ways to avoid obligations and some employers start to do that it forces the majority of employers to do the same just to compete. Then we have this racing to the bottom mentality. Now, what was the company you mentioned?

VAN ONSELEN: Airtasker.

O’CONNOR: Airtasker. Again, this is a new arrangement and there is an argument that this is operating like a labour hire company. It is not entirely a labour hire company but I am talking to a number of people, including Professor Andrew Stewart from this State who has raised some issues about this new employment relationship – what is it? Is it an employee employer relationship? And, is it really being used to avoid decent standards of employment conditions? What Labor wants to do is make sure we have a flexible labour market but not allow for the avoidance of obligations under the Fair Work Act and there are employers who are always finding loopholes and we have to find ways to make sure the system is fair because I think otherwise we’re going to see downward pressure on wages, cost of living – making it harder for people because their real income is falling – and that is not the sort of society in which I want to live and I would say most Australians would agree with Labor on that.

VAN ONSELEN: Just finally if I can, Brendan O’Connor. The unemployment numbers have come down, they’re at a three year low. At face value that sounds like a good thing – you certainly wouldn’t want them going the other way – but it does also look like the participation rate is coming down and that isn’t a good thing. Take us through some of the detail.

O’CONNOR: That’s right. So we saw a point one per cent fall in last month’s figures. However, jobs in real terms fell. There was about 4,000 job losses. That’s not a big number but what is concerning – even though the unemployment rate did fall as you said, Peter, our participation rate is now is at its lowest in 12 months, 64.7 per cent. Anything below 65 per cent is a fail as far as I’m concerned and the other concern we have is that even when there is employment growth, it’s mainly part time. We’re not seeing a sufficient number of full time work for people. That’s why we have 1.1 million Australians now looking for more work but not being able to find it. It’s the largest number of workers in this country seeking more work but unable to find it and that underemployment, that underutilisation of the labour market has economic consequences and social consequences and it’s no point saying part time work is suitable for everyone, of course it’s an important form of employment but people also need full time work to make ends meet and to have a decent standard of living and there’s just not enough jobs in the labour market at the present moment.

VAN ONSELEN: Brendan O’Connor always appreciate having you on Newsday, thanks once again.

O’CONNOR: Yeah thanks very much, Peter.