Australian PM skirts Senate row

CANBERRA (Reuters) - Australian Prime Minister Kevin Rudd on Friday pushed key work laws through a hostile upper house after compromising with opponents, skirting the first in a series of Senate roadblocks that could prompt early elections.

Rudd and his deputy Julia Gillard struck an 11th-hour deal with two key independent senators to pass unfair dismissal laws promised after Rudd's 2007 election victory, but in a phased introduction guarding jobs ahead of a widely expected recession.

"All this speculation about an early election, that's clearly starting to recede," Monash University political analyst Nick Economou told Reuters after the deal was reached during a special extended sitting of the parliament.

The centre-left government controls the lower house but needs the support of the opposition conservatives, or the backing of five Green senators and two independents to pass laws through the upper house.

The Senate had earlier rejected the government's laws, prompting a warning from Rudd that he expected the parliament to "respect the will of the Australian people, who voted absolutely clearly at the last election."

Rudd can call an early election for both houses if any laws are rejected twice by the Senate, with a three-month gap between votes. The next scheduled election is in late 2010.

With even bigger battles ahead for the government over a planned carbon Emissions Trading Scheme, or ETS, opposed by most lawmakers and business, Economou said Rudd still faced significant hurdles that could prompt an early poll.

"The ETS is the next big one. I expect that will be slightly more difficult, because the Greens will be the big stumbling block," Economou said.

WORKER PROTECTION

Rudd and Gillard rejected Senate changes that would cut 500,000 workers from the safety net of unfair dismissal laws, but agreed to a transitional introduction helping small business owners cope with an expected recession peaking mid-next year.

"All this is about, all it's ever been about, all it ever will be about, is this side of the house believes in fairness and decency at work, and the (conservative) Liberal Party does not," Gillard told parliament.

The conservatives and crossbench senators had wanted unfair dismissal laws limited to small firms with the equivalent of 20 full-time staff, rather than 15 as sought by the government.

Independent senator Steve Fielding says the deal meant that until 2011, a small business would be defined as having fewer than 15 full-time, part-time or casual staff. After that, it would only apply to businesses with fewer than 15 staff total.

Australian Greens Leader Bob Brown warned the conservatives and both independents that if they had insisted on their changes, they risked Rudd calling another poll, possibly later this year. (Additional reporting by James Grubel; Editing by )