“And the medal for idiocy goes to….”

Address to the 7th Annual Workplace and Industrial Relations National Conference, Sydney


In recent times, the Coalition has announced its Policy to Improve the Fair Work Laws.

Our policy will help make Australian workplaces even better, by improving the Fair Work laws to provide a stable, fair and prosperous future for all.

Workplaces are important to our economy and society. Higher living standards, better pay and more jobs all depend on having fair, productive, and effective workplaces. The prosperity of tomorrow is driven by what happens in our workplaces today and this is why it is in our national interest to make sure that the Fair Work laws are balanced and effective.

The Coalition’s plan embraces common sense and provides practical solutions to everyday problems. It will ensure that the Fair Work laws provide a strong and enforceable safety net for workers while helping business to grow, create new jobs and deliver higher real wage growth.

Under a Coalition Government, the pay and conditions of workers will be protected.

We believe in reward for effort and we believe in protecting people’s jobs.

We also understand the need for healthy businesses to create opportunities for workers to get ahead and ensure that nobody is left behind.

Our policy will encourage business to work innovatively and productively. This will drive prosperity and a strong economy to provide more job security and ensure sustainable wage increases.

The Coalition’s Policy to Improve the Fair Work Laws will:

  • Keep and improve the Fair Work laws – including the independent umpire
  • Re-establish the Australian Building and Construction Commission
  • Provide better protection for members of Registered Organisations
  • Provide practical help to small business workplaces
  • Guarantee workers have the right to access fair flexibility
  • Create realistic timeframes for Greenfield agreements
  • Ensure union right of entry provisions are sensible and fair
  • Give underpaid workers a better deal
  • Promote harmonious, sensible and productive enterprise bargaining
  • Ensure the laws work for everyone and undertake an independent review by the  respected Productivity Commission
  • Deliver a genuine paid parental leave scheme and lift female participation rates in Australian workplaces, helping productivity and population to boot
  • Ensure workplace bullying is comprehensively addressed
  • Urgently review the Remuneration Tribunal for the trucking industry 
  • Implement many recommendations from the Fair Work Review Panel report.

The Coalition’s Policy to Improve the Fair Work Laws will restore the balance back to the sensible centre. A Coalition Government will give workplaces, business and workers the hope, reward and opportunity they need to ensure a long term, stable and viable future for everyone.

Allow me to turn to some specific provisions of our policy.

Keep and improve the Fair Work laws – including the independent umpire

Some people have argued that there should be major changes to the Fair Work laws or that they should be repealed and replaced.

There are some problems with the current laws and how they operate. But there are also many positive aspects to the system and the Fair Work laws are still relatively new. The Coalition believes that it is better to work with and build on what we have now than it is to go back to square one and start again. We know that stability, certainty and clarity are important to workplaces and their plans for the future.

Since Mr Shorten took over as Workplace Relations Minister, we have had a period of the most partisan Minister in this space in a generation – and that partisanship started in his first weeks when he re-wrote the terms of reference for the Fair Work Act Review.

It is important that we have a forward looking and well considered review of the Fair Work Act, on the stated objectives and its impact on business, workers and the economy. There are important national interest questions to be answered about the Fair Work laws.

We believe that it is fundamentally important to make sure that the Fair Work laws work for everyone and will task the Productivity Commission with undertaking a comprehensive and broad review of the laws.

The Productivity Commission is independent and has previously conducted reviews, such as in relation to the NDIS, that have been adopted by Labor. This will be an important development and everyone will be given an opportunity to have a say.

Although the Coalition has no further plans to change the Fair Work laws, we will carefully consider the recommendations and findings of the Productivity Commission. If there is a good case for sensible and fair changes, they will be taken to an election before they are implemented.

Recognising a number of members of the Commission here today, a Coalition Government will monitor the welcome change programme which is currently underway commenced by the President. We believe it is crucial that our workplace relations system is supported by an efficient and modern tribunal which promptly provides effective and consistent decision-making. We have also said that we will give active consideration to the creation of an independent appeal jurisdiction and I would be interested in your views on this.

Guarantee workers have the right to access fair flexibility

Labor’s Individual Flexibility Arrangements were clearly designed to fail. You will recall that Forward with Fairness Mark I was silent on any form of individual flexibility and that it wasn’t until Kevin Rudd inserted them ahead of the release of Mark II that they were created.

Now knowing the contempt that Ms Gillard felt for Mr Rudd, it comes as no surprise that when drafting the Act she ensured that they were difficult to use and easy to terminate.

Many unions do not like individual workers and their employers agreeing on employment conditions that are different from everyone else. To appease union interests, Labor ensured that the Fair Work laws allow enterprise agreements to restrict the use of IFAs.

The Coalition believes that restricting the choice to use an IFA is unfair to workers who want to be better off overall, to work innovatively or to suit their personal situation, including perhaps winding down in the workforce or to spend more time with grandkids.

While we understand that there are many people who are content to work under standard conditions, we believe there should be an option for those who want to adapt their work to their particular circumstances to access genuine flexibility over their working arrangements provided they remain better off overall.

To provide workers genuine access to flexibility, the Coalition will ensure that IFA’s cannot be restricted in an enterprise agreement. This will ensure they are available to workers if they ask for one. To ensure an IFA will always lead to a worker being better off, the Coalition will retain Labor’s own ‘Better Off Overall Test’.

In addition, we will ensure that the notice period to terminate an IFA is extended to 13 weeks consistent with the recommendations of the Fair Work Review Panel[1] and a recent Full Bench decision of the Fair Work Commission.[2]

We will also adopt recommendations from the Fair Work Review to ensure that the IFA system is operating as intended.

In relation to our policy and more specifically in relation to IFAs, I found it interesting that Bill Shorten recently said in the House of Representatives that:

“They [the Coalition] want to propose—I love this, I do not know who dreamed it up, but they deserve a medal for idiocy—to make law that you can swap your hourly pay for nonmonetary benefits. Why didn't we think of that? What a great idea!”

Well, perhaps if Mr Shorten had taken the time to actively get across his portfolio brief he’d know that it was Ms Gillard in 2008 and then the Fair Work Review Panel in 2012 that introduced, legislated and want to enhance this so-called idiocy. What’s more, Mr Shorten actually voted for and campaigned for these policies.

The Explanatory Memorandum to the Fair Work Act is exceptionally clear that non-monetary benefits can be a consideration in an IFA:

You may remember ‘Danae’ at ‘The Pax Designs Pty Ltd’ who negotiates an IFA so she can pick up her school children three days per week and work late without attracting penalty rates for other days. In this example, it stands to reason that Danae would be trading up by sacrificing penalty rates two days a week for the nonmonetary benefit of spending time with her children.

Likewise, ‘Josh’, the membership consultant at a gymnasium who wants to leave early to coach his son’s under 12’s footy team would want his IFA to consider the benefit he receives from being involved in his son’s footy team and being an active community citizen.

So, as confirmed by the Fair Work Ombudsman as well, a worker can today, under Labor’s own existing Fair Work Act trade penalty rates for a non-monetary benefit provided that the worker is better off overall.

It is important to note that Labor’s hysterical reaction to the Coalition’s announcement and that we would adopt one of its own Fair Work Review Panel’s recommendations is a complete repudiation of its own existing policy.

Let’s be clear, the Fair Work Act today allows for non-monetary benefits to be a factor in an IFA, the Fair Work Review’s recommendation is to clarify the existing arrangements.

The Panel’s recommendation is very clear:

“The Panel recommends that the better off overall test in s. 144(4)(c) and s. 203(4) be amended to expressly permit an individual flexibility arrangement to confer a non-monetary benefit on an employee in exchange for a monetary benefit, provided that the value of the monetary benefit foregone is specified in writing and is relatively insignificant, and the value of the non-monetary benefit is proportionate.”

Importantly the Review also states that the IFA should estimate the value of the monetary benefits being forgone vs the non-monetary benefits received:

“It should be made clear that the BOOT can be satisfied by the provision of a non-monetary benefit to an employee in exchange for a monetary benefit provided that the non-monetary benefit is proportionate to the monetary benefit foregone and the latter is relatively insignificant. This formulation of the minimum requirements of the BOOT is intended to draw together various elements of the test referred to in an illustrative example provided on page 137 of the EM.  Of course, the employee foregoing a monetary benefit need not be an element of the arrangement between the employer and the employee. Many such arrangements, we would expect, would not have this element. However, if it is present, there should be a requirement that the written record of the IFA estimate the value of the monetary benefits foregone.”

Importantly, an IFA could only be enacted if BOTH the employee and the employer agree AND it meets the BOOT test. Importantly, as they won’t be a condition of employment, if an unsatisfactory item was suggested by the employer in an IFA in exchange for wages (apart from it not meeting the BOOT or the intention of the statements in the Review), if the employee decided not to sign the IFA, the employee would continue on their existing employment arrangements under the award/EBA. Further, a person cannot be treated adversely or discriminated against for refusing to agree to an IFA.

So in short, an employer cannot force an employee to enter an IFA and an employee can say “no” and not be adversely treated or discriminated against and it can only be commenced after an employee has already commenced work and leave the worker better off overall.

This is the case under Labor today and it would remain the case under the Coalition.

I also recognise Professor Andrew Stewart who, I think it’s fair to say cannot be described as an apologist Coalition, has confirmed that our changes to Individual Flexibility Arrangements are not overly significant and are in the spirit of the Fair Work Act.

So, I have rhetorically entitled today’s address “And the medal for idiocy goes to…”. I’ll let you fill in with more. The hint is – the initials are B.S. and that ironically is a good summary of Labor’s attack.

Ensure union right of entry provisions are sensible and fair

Labor's Forward with Fairness document prior to the 2007 election contained an express commitment to retain existing right of entry provisions. Indeed, the then Shadow Minister Julia Gillard told us:

“We will make sure that current right of entry provisions stay. We understand that entering on the premises of an employer needs to happen in an orderly way. We will keep the right of entry provisions.”[3]

Indeed, she was so confident of keeping this promise that she pledged:

“I’m happy to do whatever you would like, if you’d like me to pledge to resign, sign a contract in blood, take a polygraph, bet my house on it, give you my mother as a hostage, whatever you’d like…”[4]

A Coalition Government will change the Fair Work laws to ensure union right of entry provisions are modelled on the promise that Julia Gillard made in 2007. We will also oppose Labor’s latest attempts to go even further, and, if they become law, a Coalition Government will repeal them.

Fair Work Amendment Bill 2013

I’m sure that most of you in the room are familiar with the Fair Work Amendment Bill 2013 that passed the House of Representatives in the last sitting week.

Prior to the Bill being brought on for debate, Independents Rob Oakeshott and Tony Windsor held a press conference to say that they would not support any amendments to the Fair Work Act unless they were bipartisan.

Knowing of a number of positive aspects of this Bill, my office immediately commenced discussions with the Minister’s Office to try and reach a bi-partisan position on the Bill.

We both gave some concessions to reach that position. One of the key concessions was that Labor would remove the right of entry provisions from the Bill.

Despite a clear commitment from Labor and circulating amendments to do so, Labor pulled the amendments at the last minute under pressure from union bosses.

It’s now clear for all to see that Labor can’t be trusted on workplace relations. They will say one thing before and then change their minds after union boss intervention if it means more union boss privileges and more union boss power.

What is incomparably shameful out of this is not just the breach of commitment but that when the Coalition moved Mr Shorten’s amendments, we lost that division by just 1 courtesy of the Speaker’s casting vote – so but Tony Windsor who deliberately absented himself from the chamber for the vote, we could have avoided the lunch room invasion by union bosses.

So, not content with breaking their 2007 promise, Labor will now go even further and Tony Windsor has given Labor the green light yet again to do so.

The Labor alternative

At the last election, Labor pledged that they would make no changes to the Fair Work laws if they were re-elected and demanded the same from us. But since 2010, we have seen more than 400 pages of amendments from Labor – largely to give union bosses more power.

We’ve also had Labor toy with the idea of compulsory arbitration in direct defiance of Labor promises and the Government’s own legal advice…

The Coalition has a clear policy on the table. The Labor Party does not.

It’s time for Bill Shorten to come clean on what exactly a re-elected Labor Party would change in the Fair Work Laws, indeed to use his own words it’s time that Labor “comes out from under the policy doona” and “bring[s] his plans for Australian workplaces out of witness protection”.


Although the Labor Party are going above and beyond to prove otherwise, government in Australia is a privilege.

It is bestowed by the people. Those elected are given government on trust of the people for three years.

The Coalition recognises that government is a privilege.

In other words, we are taking nothing for granted and understand that we need to work hard to gain the support of our fellow Australians.

In the event that the Australian people are minded to entrust us with government, I would respectfully remind them that if they want a change of policy direction for our country, they will not only need to change the government – they will need to change the Senate as well.

The ALP/Green alliance dominated Senate has used its numbers in a ruthless and arrogant manner – unparalleled – in the Senate’s history.

You may recall the Coalition was heavily condemned for using its Senate majority to guillotine 32 Bills in 3 years between 2004 and 2007. To date, since the last election no less than 161 Bills have been guillotined and counting.

Let there be no mistake – the vital role of the Senate in our parliamentary system is best protected by the Liberal National Party Coalition as opposed to the Green/Labor Alliance.

The Greens have lost whatever credibility they had as the self-described honest-broker and protector of the Senate.

If brief, if given the privilege of government in less than 90 days now, we will:

  • Keep the framework of the Fair Work Act;
  • Provide practical solutions to practical problems;
  • Be balanced and moderate; and
  • Make sure no-one gets left behind whilst advancing our economy which is the only sustainable path to job security and wages growth.

It’s the challenge we hope we are given by the Australian people on the 14th of September.

[1]Recommendation 12

[2]Modern Awards Review 2012—Award Flexibility [2013] FWCFB 2170 (15 April 2013)

[3] Julia Gillard, 28  August 2007, Press Conference

[4] Julia Gillard, 8 November 2007, National Press Club Debate

About Eric

Eric Abetz has been a Liberal Senator for Tasmania since 1994 and has served in a range of Leadership, Ministerial and Shadow Ministerial roles.

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