Labour hire
The use of labour hire, 'on hire', or 'agency' workers has
primarily become an avoidance strategy where the legal fiction of a distinct
and separate workforce is used to mask gross exploitation and the shifting of
legal liability that would otherwise reside with the host employer under the Fair
Work Act 2009.[1]
5.1
The term 'labour hire' describes an indirect employment relationship in
which an employer, a 'host' company, instead of employing workers, contracts an
agency to provide workers in return for a fee. There is thus no direct employment
relationship between the host and employee, allowing in some situations the
company to avoid certain employment conditions and responsibilities, and
denying workers the entitlements and protections associated with direct
employment.
5.2
This chapter looks at the use of labour hire through evidence presented
by workers, employers and unions. The chapter focuses specifically on the ways
in which labour hire is used to avoid responsibilities under the Fair Work
Act 2009 (FWA, the Act), examined through case studies presented by
witnesses and submitters.
The growth of labour hire
5.3
Labour hire arrangements have been a feature of the labour market for
decades, however their use has grown steadily across industries in recent
years.[2]
Today Australia is near the top of Organisation for Economic Co-operation and
Development (OECD) country rankings for the use of agency work.[3]
5.4
The Australian Chamber of Commerce and Industry (ACCI) submits that the
use of labour hire is not in itself a deliberate non-compliance with the FWA,
and is instead one of many diverse forms of engagement. ACCI points to a
rapidly and perpetually changing employment environment which requires
flexibility and adaptability from employers, workers and unions:
In today’s society people will undertake multiple types of
work under a variety of arrangements across their working life. There is no
‘one size fits all’ employment model that will suit the circumstances of all
employees or all employers and no single ‘right method’ of labour engagement.[4]
5.5
The Productivity Commission (PC) looked at reasons for the prevalence of
employment forms which differ from traditional ongoing employment arrangements:
The prevalence of alternative forms of employment depends on
the degree to which they meet the needs of employers, match the preferences and
circumstances of workers and are affected by institutional factors. Whether or
not an employer seeks to use a certain form of work depends on their assessment
of how productive and how costly the workers might be.[5]
5.6
The following figure from the PC indicates that casual workers and other
forms of non-ongoing employment accounted for almost 40 per cent of employment
in recent years:
Figure 5.1—Stability
in the forms of employment, 2009–2013, per cent of total workforce
Source: Workplace Relations Framework, Productivity Commission,
Final Report, 2015, p. 800.
5.7
Details on the incidence of labour hire use are limited. ACCI submitted
that labour hire represents a relatively small percentage of the overall
Australian workforce, approximately 1.2 per cent.[6]
The Australian Council of Trade Unions (ACTU) reports that there are currently
between 2000 and 3500 temporary agencies operating in Australia, but fewer than
2 per cent of these employ more than 100 workers.[7]
5.8
ACCI cites the PC's view that alternative employment arrangements can
boost productivity and lower costs, and that the benefits of this ultimately
flow to the community as a whole. Furthermore, ACCI quotes the PC's conclusion
that arrangements such as labour hire are 'unlikely to undermine employee
bargaining power to any great extent.'[8]
5.9
The committee received a considerable volume of evidence challenging
this assertion. Although it is indisputable that labour hire arrangements benefit
employers and to a certain extent permit flexibility which might be attractive
to some workers, case studies the committee looked at suggest that labour hire:
-
has a pronounced and disruptive effect on enterprise bargaining;
and
-
is being used by some employers to minimise costs by undermining
the industrial system.
5.10
The critical distinction which must be made is that it is not labour
hire per se that has the above effects, but rather how employers use
labour hire workforces strategically to achieve these outcomes.
5.11
These points are outlined in the following sections.
Disposable workers
5.12
Labour hire was initially envisaged as a way of supplementing existing
workforces. Its continued exemption from mainstream industrial regulation means
labour hire is now also being used to replace existing workforces.[9]
This section looks at what labour hire employment entails.
5.13
Host companies which use labour hire often already have employed workers
performing those jobs, but under the protections of the FWA. Labour hire
involves the provision of labour only, not additional expertise beyond that
held by the company's existing employees. Workers have their services
effectively 'rented out' to clients of the labour hire business.[10]
5.14
Host companies which save on staffing costs by using labour hire
workforces have very few obligations to those workers, who in turn have very
few rights or means to influence their relationship with the host company:
Employers are successfully shielding their profits from the
demands of workers by making a third party employ the workers which shields
them from having to take any responsibility...and having any concern or care for
the welfare of those workers.[11]
5.15
The ACTU describes the use of labour hire as a rejection of the
fundamental policy intent of the FWA, and submits that this manifests in a
number of ways:
- The common law does not see an employment relationship between the host employer
that directs the work and the worker. Further, it has generally rejected the
idea that there could be more than one employer;
-
Labour hire workers cannot bargain for a collective agreement with the
host employer, or participate in bargaining for such an agreement. Whilst
labour hire workers can make a collective agreement with the labour hire agency
(subject to the practical barriers which attach to their predominantly casual
form of engagement), the agency is not the entity that on a day to day basis
controls the work that they perform and the conditions under which and location
where it will be performed;
-
Labour hire workers cannot make an unfair dismissal claim against a host
employer, even where the host employer is the decision maker as to whether the worker
will have a continuing job at the workplace or not;
-
The “General Protections” contained in the Fair Work Act 2009 (Cth)
adapt poorly to the work situations of labour hire workers because in the main
they protect the labour hire agency itself from “adverse action” rather than
the workers the agency employs and makes available to workplaces; and
-
Workers in labour hire arrangements are less inclined to speak up about
matters of concern to them as they understand that the decision to request that
they no longer be supplied to the workplace can be made by the host employer at
any time, and may mean they have an uncertain period of time before another
host engagement becomes available.[12]
5.16
Research from the University of Melbourne, cited by the ACTU, finds that
labour hire workers are believed to experience the most volatile weekly hours
of work.[13]
Some workers report being required to be available on the worksite for a full
week, but receiving daily text message notifications telling them whether they
would be required the following working day. Such jobs deny workers the ability
to bargain for better conditions and lack basic security, including the
security of employment needed to obtain a home or car loan.[14]
Labour hire workers, the ACTU submits, 'come closest to the "disposable
worker" model at the heart of the "just-in-time" workforce that
has cemented itself in the Australian labour market over the last twenty-five
years:'[15]
Labour hire is overwhelmingly used as an avoidance strategy
and its continued operation in the present regulatory setting is untenable
unless one accepts that the workers who are engaged by labour hire agencies are
second class citizens.[16]
5.17
In some circumstances, labour hire companies establish opaque corporate
and employment structures. While the leading temporary work agencies operating
in Australia are Skilled, Manpower, Spotless, Programmed Maintenance Services (Programmed)
and Chandler Macleod, these companies often engage subcontractors through
complex and sometimes opaque corporate arrangements which can make it difficult
to ascertain which company a particular worker is actually employed by:
[A] labour hire employee may be legally situated deep within complex
layers of inter-corporate subcontracting arrangements as well as the commercial
arrangements between the labour hire and host. The case reported in Matthew
Reid v Broadspectrum Australia Pty Ltd identifies some of the practical
difficulties that this can present; namely, complying with the practice and
procedure at one's workplace can lead to one being terminated by one's employer
– who is not at one's workplace.[17]
5.18
The federal government has done little to address concerns regarding
labour hire. By contrast, the ACTU reports, some state governments have been
more receptive. In Victoria, for example, the state government has considered
the findings of an extensive inquiry and agreed to establish a system for
licencing labour hire agencies operating in the horticultural, cleaning and
meat industries.[18]
The ACTU reported that a consultation process is currently underway on labour
hire regulation in Queensland and in South Australia, following similar parliamentary
inquiries in those states.[19]
Since that time the committee understands that a bill has been introduced into
the Queensland Parliament to create a labour hire licensing regime in that
state.
Loss of conditions
5.19
Legal Aid NSW submits that using labour hire allows host companies to
avoid paying redundancy entitlements when they no longer require workers. Even
where the worker has spent years performing identical work to an employee of
the host company, that worker is not entitled to a redundancy payment.[20]
5.20
This is particularly problematic where the decision that a worker's
service is no longer required is seemingly unconnected to the worker's
performance or conduct. The CFMEU explains that labour hire workers face
jurisdictional impediments and considerable difficulty in making an application
for an unfair dismissal remedy:
Our members have had their employment terminated after having
worked on a full time basis for one host employer for a considerable time,
often several years. They are often simply told by the labour hire agency that
the host employer no longer desires their presence on site. Because of the
current prohibitions under the unfair dismissal regime in the FW Act, these
labour hire employees do not have any recourse to challenge their dismissals.[21]
5.21
Similarly, even where labour hire workers are dismissed for reasons
relating to performance, this may occur without the worker being accorded
procedural fairness.[22]
5.22
The Act provides certain provisions requiring labour hire companies to
consult with their employees if they are no longer required by the host
company. The labour hire company has, for example, an obligation to consider
redeploying their employee elsewhere; however, this is subject to redeployment
options being available. Legal Aid NSW submits, however, that a large portion
of labour hire employees are engaged on a casual basis, and as such they are
not entitled to redundancy payouts under the FWA.[23]
5.23
The Australasian Meat Industry Employees' Union (AMIEU) reports that
labour hire arrangements help employers minimise their workers' compensation
insurance premiums.[24]
Reduction of corporate responsibility for injuries and deaths at work is of
grave concern, particularly given media reporting around deaths at work in the
building and construction industry, where the use of labour hire is rife and
some construction sites are known for their concentrations of young,
inexperienced workers—unsupervised apprentices, inexperienced backpackers. The
committee notes a recent example, the October 2016 death at a Finbar
construction site in Perth of a young German backpacker, recruited through a
labour hire firm, whose death on site did not prompt the host company to pause
work on site or even contact the police promptly.[25]
5.24
The Queensland Council of Unions (QCU) cites research suggesting that
labour hire is also used as 'a coercive discipline over the workforce by the
threat of unemployment.'[26]
The primary reason employers seek to use labour hire, however, is to reduce
staffing costs.
5.25
The case study below illustrates this point.
Carlton & United Breweries
5.26
Carlton & United Breweries (CUB) produces some of Australia's
best-known beer, including VB, Carlton Draught, Crown Lager and Cascade. The
company has around 1500 workers nation-wide; 420 of these are operational
employees working in breweries. CUB reports significant investment in training
and development, and seeks to position itself as an 'employer of choice' by
providing pay and employment conditions which exceed the National Employment
Standards (NES) and relevant awards.[27]
5.27
CUB has been taking gradual steps to outsource its workforce since 2009.
In 2009, the company outsourced its Abbottsford site in-house maintenance
employees to a labour hire company, ABB. At the time, those workers secured an
enterprise agreement with ABB which 'substantially maintained the majority of
their existing terms and conditions.'[28]
5.28
The labour hire contract was awarded to a new agency, Quant, in 2014,
again with substantially preserved terms and conditions for the maintenance workers.
In late 2015 Quant entered into bargaining with the maintenance workforce and
an Enterprise Agreement, still substantially preserving their terms and
conditions, was voted on in early January 2016, and was still in effect.[29]
However, seven weeks before that contract expired, 55 maintenance workers were
called to an off-site meeting and told that their employment had been terminated.[30]
These workers, who became known as the 'CUB55' during the protracted dispute
which followed, had over 900 years of combined service at CUB between them.[31]
5.29
This was not a last-minute decision by CUB; it was part of a careful,
strategic plan for reducing its expenditure on labour without necessarily
changing its workforce. CUB had a pre-arranged, temporary, replacement
workforce ready and in place on the next working day—labour hire workers flown
in from other breweries, their accommodation paid for—and these workers were
brought in on buses in front of long-serving ex-employees protesting outside.[32]
5.30
The CUB55 workers were told they could re-apply for their jobs, but
through CUB's new labour hire agency, Catalyst Recruitment, a subsidiary of Programmed,
which CUB had entered into a new contract with for the provision of labour hire.[33]
Predictably, the contracts on offer through Catalyst entailed considerable reductions
in pay and conditions. The ETU explained that the Catalyst enterprise agreement
have reduced wages by 65 per cent. It was also a pre-existing agreement which had
lain dormant for five years. Its harsh terms and conditions had in fact been
put in place years earlier, when Catalyst used three casual employees to secure
a non-union enterprise agreement which was in no way connected to CUB.[34]
5.31
Without warning for the workers, Programmed/Catalyst terminated their
contract with CUB around September 2016. The ETU reports that 'CUB refused to
tell the union the terms and conditions upon which the new employees [were]
engaged' at the time.[35]
5.32
Far from being an isolated incident, the AMWU submits that the CUB
example reflects a serious consequence of the nature of the labour hire
industry more broadly:
This unfairness is compounded by the influence of the 'labour
hire' market, where labour hire employers are under competitive pressure to
reduce the amount for which they are prepared to provide the labour, even
though they may not have the labour which they are purporting to be providing.
This particular example at CUB is the norm in many long term labour hire
arrangements, where the incoming labour hire employer attempts to hire all or a
significant proportion of the outgoing labour hire employer's employees.[36]
From the workers' perspective
5.33
The committee received a submission from the CUB55 outlining events at
the Abbotsford brewery. Excerpts from individual workers are provided below,
and tell of the workers' shock at being treated so poorly after years of loyal
service.
CUB55 in their own words[37]
So they sacked us on the Friday, on the Monday there
was already an alternative workforce doing our job. That takes time.
Chris
I’ve worked at the Brewery for 40 years...I’m hardly
labour hire.
Allen
I worked on Thursday 6pm to 6am and I get a phone call,
from a mate actually, not even from the company... I had to go straight after
work, after doing a 12-hour nightshift. So I went to the hotel, and we were
told we were all sacked. They wouldn’t tell us who the contractor was or what
the conditions were, but we were told we could apply for our jobs.
Chris B
We all have a unique set of skills, not the skills you
can just import. Skills that were learned by us over a number of years, that
are unique to this industry. So the injustice of throwing us out, trying to
import skills from all walks of Australia. It clearly hasn’t worked. It would
never work. That is the injustice we all feel.
Paul
The cost on their personal lives is much bigger. You
can’t read it, you can’t see it but everyone is suffering in some way. I am
suffering myself too.
Andy
With this new Agreement there is no provision for us
apprentices anymore...After 4½ years of a 5 year apprenticeship we are now
left, we can’t get our trade certificates...At the end of this year we would
have been qualified in dual trades, electrical and instrumentation, we can’t
get that anymore.
Apprentices
I know I work with the most talented guys in Australia.
We work really hard to get the machinery up to a world class maintainable
standard.
And for that to be thrown away through substandard
practices just breaks my heart. A question a lot of people ask us is, how can
this happen in our country?
I can’t really answer that. I honestly do not know.
Chris
CUB manager's diary entry
5.34
Evidence in the form of a diary belonging to Mr Sebastian Siccita, part
of the CUB management team during the industrial dispute, came to light during
the inquiry. The contents of the diary, which Mr Siccita and CUB's new
management team distanced themselves from when questioned by the committee;
appear to suggest CUB was prepared to stop at nothing to crush its embattled
workers.[38]
5.35
Under the title 'Winning a War', the diary excerpt lists a number of
tactical suggestions, quoted below:
-
Shoot the shit out of them.
-
Play by rules they're not prepared to play by.
-
Cut their supply lines and starve them out.[39]
5.36
The excerpt also includes arrows pointing to the words 'lawyer fees' and
'defamation'. The committee sought clarity on whether CUB had a legal strategy
in place during the dispute, which CUB management confirmed but did not wish to
elaborate on:
At the time, yes, we had lawyers involved. We would certainly
be interested in any attorney-client privilege that would be attached to that.[40]
5.37
The committee notes that Mr Siccita had difficulty recalling whether he
was familiar with the diary or its contents despite leafing through its pages
during a public hearing. Minutes later Mr Siccita contradicted this position by
attempting to retain possession of the diary on the grounds that it was his.
The committee thanked Mr Siccita for confirming that the diary was his.[41]
The resolution
5.38
The committee notes that six months after having their employment
terminated without warning, following large-scale community picket and campaign
and a damaging national boycott of CUB products, the company abandoned its
industrial strategy and all workers were reinstated on agreed pay and
conditions based on those that applied prior to the dispute.
5.39
It is noteworthy that CUB came under new management in late 2016. Unlike
their predecessors, the new management team engaged with workers and the union
for an effective resolution to the dispute, and has committed to a more open,
consultative and positive relationship with its workers and their
representative unions in future:
One of the first acts of our new management team in October
last year was to review the industrial dispute at our Abbotsford brewery and
reach an expeditious resolution. We were pleased that the dispute at the
Abbotsford brewery was successfully resolved within two months of CUB's new
management taking up their new roles Returning operations to normal and
reaching an amicable outcome with the unions and workers was important for our
business in Australia and a statement of how we intend to do business here.[42]
Committee view
5.40
The committee recognises the lack of legal recourse for the CUB55 under
the FWA and therefore the critical role the community campaign and national
boycott played in resolving the CUB dispute. The committee notes that this is
not the only instance of financial pressure coming to bear on a company's
actions.
5.41
The committee wishes to acknowledge that CUB's new management team
engaged with the inquiry process and took responsibility for the company's
actions. The committee particularly applauds CUB's commitment to learning from
the experience and taking proactive steps to ensure that its workers are treated
fairly, with dignity and respect, in future.
Oxford Cold Storage
5.42
The committee was also provided with an example of a company alleged to
have established a number of labour hire companies, as shelf companies, in an
elaborate attempt to avoid negotiating enterprise agreements with its
employees.
5.43
Oxford Cold Storage is one of the largest cold storage warehouses in the
southern hemisphere. The National Union of Workers (NUW) estimates that only 21
workers, out of an approximately 400-strong workforce, are employed directly by
the company. The rest, the union states, are employed through eight different
employing entities—a mix of legitimate labour hire agencies and labour hire
agencies whose workers are employed exclusively at Oxford Cold Storage. It is a
complex arrangement:
In addition, further complicating matters is that four of
those entities at Oxford have enterprise agreements registered to them,
including Daniel's. Daniel is employed by a labour hire agency, you could say,
which has an enterprise agreement which provides for lower pay and conditions
than he is currently working on. So it is a very tenuous and precarious
position that hundreds of the workers at Oxford are in, because technically
their employer is not Oxford; it is a shelf company, more or less, which does
not have office space and does not supply workers to any other worksite but
nonetheless is the entity which technically has control over their pay and
conditions.[43]
5.44
Mr Daniel Draicchio, a worker employed on the site, explained that he
was originally employed by a labour hire agency as a casual, at a lower rate of
pay than full-time workers on site. Mr Draichhio's employment was transferred
through a number of different agencies, and he was eventually placed as a
permanent employee, with better rates of pay and improved conditions. When the
enterprise agreement he was employed under was due to expire, the company asked
Mr Draicchio and fellow employees to sign on with a new agency:
I asked them about the EBA and if we had to negotiate with
that. They said, 'No, an EBA has already been filed with Fair Work; you just
have to sign over once it's been approved.' So we were called back in and
signed over, and that was done; we were on to a new agency. When the EBA
expired for Oxford under the 21 people that were doing negotiations, we were
sent out a letter to say, 'If you don't sign the new common-law contract by a
certain date, your pay will drop.' We did not know what the drop was, because
we had never seen our actual EBA; we had never been told about it. We found out
it was about $7 less an hour than what we are getting now. There are people
that have been there for over 10 years and have never, ever bargained for an
EBA—not once.[44]
5.45
Once workers are made permanent, the company allegedly transfers them
from shelf company to shelf company, always just before a collective agreement
is set to expire, in order to avoid having to negotiate a new enterprise
agreement.
To be clear: the purpose of the transfers—whether it is the
sole purpose or not is difficult for us to say, but it is clearly the main
purpose, in our view—is to deny workers the ability to collectively bargain. So
the transfers occur some months before a collective agreement is set to expire,
and people are transferred to an entity that already has a collective agreement
in place that will run for probably four years. That cycle has occurred a
number of times in relation to a number of different entities at this workplace.[45]
5.46
Despite being moved from employer to employer, the workers continue to
perform the same work, on the same site, throughout.
5.47
The committee contacted Oxford Cold Storage for a response. The company
submitted that it was proud to employ many long-term workers and offered some
of the highest hourly rates of pay in the Victorian cold storage industry. The
allegations above were not addressed.[46]
Industry perspectives
5.48
The Australian Industry Group (Ai Group) advocated for flexible
workplace arrangements, describing them as fundamental to improved
productivity, important for national competitiveness and continuing to raise
Australian living standards.[47]
5.49
The Australian economy, Ai Group submits, faces multiple challenges,
including seismic shifts in the global economy due to continued
industrialisation in populous countries such as China, India and Indonesia, and
a rapid pace of technological development. It is essential, Ai Group holds,
that workplace arrangements in Australia 'remain agile and in a position to readily
adapt to technological changes.'[48]
5.50
In light of this, the committee sought to better understand whether
industry groups acknowledge that there are problems in the labour hire sector,
and what their views are on the challenges insecure work presents for workers.
5.51
The Recruitment and Consulting Services Association (RCSA), Australia's
peak industry body representing employment services, informed the committee
that the association takes steps to monitor and address member organisations'
behaviour:
We do not support, as the RCSA supports, on-hire contractor
or independent contractor services in unskilled, semi-skilled, or even most
trade relationships. We say that it should be the reserve of those who have the
bargaining power, the professional insight and the know-how and the back-end
capacity to manage what is essentially meant to be a business-to-business
relationship. So, if any circumstances arise where we see workers with low
bargaining power—especially unskilled and semi-skilled—being engaged as independent
contractors, we will call out that behaviour with our members under our code,
and we are also prepared to pull them into line to the extent that we have the
power to do so.[49]
5.52
The association has developed an employment certification program which
is designed to address key failures in the sector:
Very simply, it deals with issues of fit and proper people to
run these businesses...The second one is worker status and remuneration, which
goes to the Fair Work entitlements, ensuring that individuals are paid in
accordance with those minimum entitlements; work health and safety;
migration—we are very mindful of vulnerable workers around migration, and we
are working with the foreign worker task force and are about to present to them
on our certification program—and financial assurances as well, making sure that
there is evidence of them having a sustainable and proven record of reporting
and otherwise, so that you do not simply get a mobile phone and say, 'Hey,
here's Jimmy the Afghan's labour hire,' as it was recently referred to in the
media, 'and I can find you a whole heap of people.' The final one relates to
suitable accommodation to try and address the issue of foreign workers being
housed in inappropriate conditions.[50]
5.53
However, the RCSA explained that many complaints around poor conduct
made to its ethics registrar relate to the practices of non-members, and as
such the association is powerless to compel these companies to be bound by a
code.[51]
5.54
Noting that Programmed—the largest labour hire company in the Australian
market and a key player in the CUB case—is in fact a member organisation of the
RCSA, the committee asked whether, in RCSA's view, Programmed had sought to
undermine workers' pay and conditions by seeking to use Catalyst to re-hire the
CUB workforce. In response, RCSA informed the committee that its interest was
limited to ensuring that members comply with legislation:
Our interest there is to ensure that any of our members are
complying with the legislation that applies in the circumstances. I am sure you
and I understand that the Fair Work Act does not prohibit the engagement of
individuals for the purpose of making an enterprise agreement.[52]
Committee view
5.55
The committee notes steps the RCSA is taking to ensure that minimum
standards are adhered to in the labour hire sector. However, this does not
appear to address the key issue around labour hire—the minimum standards do not
set a very high bar, which is precisely the reason that employers are supplementing,
and in some cases replacing, their workforces through labour hire arrangements.
5.56
The committee is disappointed to learn that CUB and Programmed were not
held accountable for their actions during this high-profile dispute, and that
the test for appropriate conduct in the sector is whether employers adhere to
the letter of the law. The committee is firmly of the view that CUB and
Programmed applied an interpretation of the law which suited their financial
interests, with little regard for the spirit of the FWA. Considering that CUB
and Programmed are alleged to have gamed the system by exploiting loopholes in
the FWA—not necessarily contravened the Act—in the committee's view the
question of whether the two companies adhered to the legislation is moot.
5.57
Furthermore, the committee is unconvinced by arguments heard from
industry groups concerning the challenges facing Australia's economy. There is
a propensity to use words such as 'agile' to describe workforces, ignoring the
fact that 'agile' often translates to 'casual' or insecure work. There is a
large body of evidence, on record as part of this inquiry, indicating that
employers are using labour hire specifically to drive down wages and reduce
workers' conditions and entitlements. As explained by the AMWU, by giving
primacy to enterprise bargaining, the FWA in fact ties productivity to wages at
the enterprise level. Labour hire is becoming a vehicle companies are using to
break this connection between productivity and wage increases:
Within this silo of 'labour hire' the work they perform and
the productivity increases they achieve for the business are no longer
connected to their wage increases. Their 'host employer' is insulated by the
'labour hire employer' from any pressure to increase wages.[53]
5.58
In this context, it is worth noting that economists, the governor of the
Reserve Bank of Australia, and the OECD have warned against further stagnation
in wage growth and its deleterious effect on the national economy. Calls for
increasing the use of labour hire and other forms of insecure work are, in the
committee's view, deeply counterproductive and against the national interest.
It is short-sighted to think that allowing wages to fall will have any effect
on the economy beyond redistributing wealth in favour of profits for the
private sector, as shown in Chapter 9 of this report.
Recommendation 2
5.59
The committee recommends that federal and state governments work
together to establish labour hire licensing authorities in each state and
territory, and that licensed labour hire operators be required to provide data
on the numbers of workers engaged.
Recommendation 3
5.60
The committee recommends that the government legislate to require
that a person or organisation supplying a worker to another person or
organisation must:
- be a
licenced labour hire operator; and
- only
engage in such activity through a registered business.
Recommendation 4
5.61
The committee recommends that, upon establishment of labour hire
licensing schemes (Recommendation 2), the government impose a legal obligation
for hosts to use only licensed labour hire providers.
Recommendation 5
5.62
The committee recommends that the National Employment Standards
be amended to provide casual employees, whether directly or indirectly engaged,
the right to elect to become a permanent employee after twelve months regular
and systematic service with the same employer.
Recommendation 6
5.63
The committee recommends that labour hire workers be covered by,
be able to participate in and negotiate collective agreements directly with the
host employer.
Recommendation 7
5.64
Consistent with Recommendation 6, the committee recommends that
host employers have responsibility for ensuring all labour standards provided
in the Fair Work Act are afforded to labour hire workers. Such
provisions could draw on the concept of the Person in Control of a Business or
Undertaking (PCBU) definition found in the Model OHSWHS laws.
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