By Patricia Karvelas

Kevin Rudd has fulfilled his election pledge to scrap Work Choices and establish a new industrial relations order, after a Senate deal with Family First’s Steve Fielding yesterday ended a deadlock that threatened to stall the Government’s workplace agenda.

After a day of tense negotiations, Julia Gillard persuaded Senator Fielding to allow her to keep her promise to define a small business, for purposes of unfair dismissal concessions, as having fewer than 15 workers.

In return, the Deputy Prime Minister and Workplace Relations Minister agreed to impose an 18-month phase-in period, during which a tougher, 15 full-time-equivalent-worker definition will apply.

Under the deal, a small business will be defined by a simple head count of less than 15 workers -which was always Labor’s policy- from January 1, 2011. All workers will regain the right to claim unfair dismissal that existed before the Howard government’s Work Choices laws. But small businesses with fewer than 15 staff will be exempt from claims from new employees for 12 months. The probation period for other employers will be six months.

Ms Gillard hugged Senator Fielding after he agreed to support the legislative centrepiece of the Government’s 2007 election platform.

The new laws will increase union workplace entry rights and provide for a centralised umpire, Fair Work Australia, to set minimum wages, settle industrial disputes and hear unfair dismissal claims.

An emotional Ms Gillard, who was in the Senate chamber with former ACTU secretary Greg Combet when the bill passed, said Work Choices was “finally buried”.

Ms Gillard said the Rudd Government had fulfilled its promise to get rid of the Howard government’s industrial relation laws almost three years after they were introduced.

“Every step of the way we’ve had to fight against Liberal Party opposition. Even today, in the last hour in the Senate, the Liberal Party was twisting and turning and fighting to keep Work Choices,” Ms Gillard said.

“Today, despite their opposition, we have buried Work Choices.”

But Malcolm Turnbull claimed the Coalition had won significant amendments on right of entry and greenfields agreements.

Ms Gillard insisted not one amendment that had passed had been authored by the Coalition.

The Opposition Leader said monthly unemployment figures would be the real test of how many jobs the Government’s new industrial laws destroy.

“The three criteria on which this law will be judged is jobs, jobs, jobs,” Mr Turnbull said.

“Every month there will be a report card, the jobs figures, and it will be from that report card that we and all Australians will know the real impact of this law on jobs.”

Mr Turnbull said the Coalition had helped make the laws “less bad” so they would destroy fewer jobs.

As negotiations dragged into the afternoon with parliament held back to pass the laws, the small business definition became the crucial sticking point between the two independent senators, the Opposition and the Government.

This was because it represented the cut-off at which unfair dismissal laws applied for 12 months for new employees, rather than the six-month probation period for larger workplaces.

Independent senator Nick Xenophon and the Opposition lost a vote to keep the definition at less than 20 employees.

Senator Xenophon voted with the Opposition after Senator Fielding undercut his original deal with the Government.

Senator Xenophon had been pushing for the transition to the 15-worker head count to take three years, but Senator Fielding intervened and struck a deal to make it 18 months.

Because of the way the Government worded the motion in the Senate yesterday, it only needed one of the two senators to get its Fair Work Bill passed, and relied on Senator Fielding.

It also meant the Coalition did not have to vote on the full bill because the Senate was only required to vote on whether or not it would insist on its amendments.

The full bill passed the Senate early yesterday morning but the Government would not accept a Coalition supported amendment to raise an unfair dismissal threshold for small business from fewer than 15 employees to 20.

Senator Xenophon last night told The Weekend Australian a three-year transition period was his bottom line, and he could not accept the deal Senator Fielding had done with the Government.

“Instead of buying small business the time they needed during the financial crisis they’ve ended up with a stop watch,” he said.

Other changes secured by both crossbench senators include that the bill will acknowledge the special circumstance of small and medium size enterprises.

Senator Xenophon, before his talks broke down, also managed to secure a specialist information and assistance unit for small and medium size enterprises to be be established within the Office of the Fair Work Ombudsman.

ACTU president Sharan Burrow said the passage of the Fair Work Bill marked an historic moment in restoring workers’ rights.

“After a decade of attacks on working people by the Liberal and National parties the tide has turned,” Ms Burrow said.

“While the Liberal Party remains hopelessly devoted to Work Choices, the Australian people want workers’ rights restored.”

She said everyone involved in the Your Rights at Work campaign and all those who voted against Work Choices would be relieved to see the laws pass through parliament.

“We can take pride in what we have achieved,” she said.

Australian Chamber of Commerce and Industry chief executive Peter Anderson said the pressure of politics had won over the interests of employers and small businesses.

“The rush to get rid of Work Choices has left employers and small business exposed to higher labour costs, extra employment red tape and new tribunal and union powers, with only minor changes by the Senate,” he said.

“Many of these employers and small businesses will feel let down by their government and the Senate, if not today then when these new costs, regulations and unfair dismissal claims start impacting on them and the jobs they offer.”

The Australian