The Coalition has rejected Senate amendments to prevent older workers being sacked or losing hours to make way for new hires aged 35 and under who qualify for jobmaker wage subsidies.
In a rare display of unity on Tuesday, Labor, the Greens, One Nation and senators Rex Patrick and Jacqui Lambie voted to add the safeguard to the government’s jobmaker hiring credit bill, which will grant subsidies of up to $200 a week for younger workers.
On Wednesday morning the Coalition rejected the amendment to the bill in the House of Representatives, setting up a standoff with Labor and the Senate.
For now, the opposition is insisting on the amended version despite supporting the subsidy scheme in principle.
Far from shying away from the fight, Labor used every one of its questions in question time to probe jobmaker, including the exclusion of workers over 35, lack of safeguards, and discriminatory job ads seeking younger workers.
In response, Scott Morrison doubled down on incorrect claims he made in October that employers could not sack existing staff and receive the subsidy.
Morrison cited safeguards in the rules that require employers to increase their headcount and payroll to access jobmaker hiring credits, and counter-punched by accusing Labor of “seeking to create fear in a pandemic”.
The stalemate opens the possibility the Senate could rise on Thursday without the bill having passed – unless the Coalition reverses course on the safeguard or can change crossbench parties’ votes.
Earlier, before the vote, the Labor leader, Anthony Albanese, told the lower house it was “totally unacceptable” that the unamended bill would provide a financial incentive for employers to sack existing staff.
Albanese said if the government was “fair dinkum” about creating additional jobs, it had to vote for the safeguard.
“The fact is Labor will not tolerate a circumstance where those aged over 35 get done over, as a result of legislation passed by this parliament.”
The shadow employment minister, Brendan O’Connor, warned loopholes in the scheme would be exploited by “rogue employers”.
If the Coalition opposed the amendment “the only conclusion is that the government have absolutely no regard for job security in this country”, he said.
But O’Connor also sounded a more conciliatory note, stating Labor supports the bill “in principle and in practice because it will support employment”.
The Greens leader, Adam Bandt, said the safeguard does no more than legislate what the prime minister believes is the status quo, “that you can’t sack someone or reduce their hours of work to get this credit”.
Bandt rejected Morrison’s view by noting the scheme allows employers to “to pick up and put on two people on minimum wage at low hours of work” to replace one full-time worker.
The government claims that as well as the new headcount requirements, existing protections against unfair dismissal and adverse action in the Fair Work Act would prevent workers losing their jobs or hours.
The attorney general, Christian Porter, said that “all the usual protections apply” and sacking a worker to hire another on wage subsidies “would never be a valid reason” in law.
At the Senate inquiry, the Australian Council of Trade Unions president, Michele O’Neil, warned that casuals lack the protection of unfair dismissal laws, while adverse action laws had been “read down” to the point they were unusable.
Payments for the subsidy scheme will not be made until February and the government is consulting on the scheme’s rules until 27 November, giving Labor time to insist on safeguards without in fact delaying payments.
But treasurer, Josh Frydenberg, said in question time that Labor’s position is “delaying certainty” for business. He argued the credit was needed because in the last recession, youth unemployment took 15 years to return to pre-recession levels.
The safeguard was approved by 30 votes to 28 in the Senate.
The One Nation leader, Pauline Hanson, has warned that jobmaker has “too many flaws to successfully entice businesses into hiring extra employees”.
Hanson favours spending the $4bn budgeted for the program to build infrastructure or offer a payroll tax reduction to employers.
In a Senate speech on Tuesday, Hanson said jobmaker leaves older jobseekers “overlooked and disadvantaged”.
“It is my concern that jobmaker would encourage the loss of full-time jobs and reduce job security,” she said.