Many of the concerns with labour hire arrangements explored in Chapter 3 of the report are evident in the operations of the National Disability Insurance Agency (NDIA) and the National Disability Insurance Scheme Quality and Safeguards Commission (NDIS Commission). These include:
an ongoing reliance on labour hire for core, ongoing work;
a diminished quality of service;
stressful and insecure conditions for staff; and
a lack of information on expenditure, particularly in regard to the wages paid to workers.
Similar to the DVA case study in Chapter 3, this section is not intended to be an exhaustive catalogue of the operations of the agencies. The committee merely considers it instructive to collate the evidence it received in order to contextualise and illustrate submitter concerns.
Concerns
The Community and Public Sector Union (CPSU) represents workers at both the NDIA and the NDIS Commission. It advised that its members in these agencies held deep concerns about the operations of both organisations which undermined the purpose of the National Disability Insurance Scheme (NDIS).
The CPSU argued that the NDIA had been unable to reach its potential due to a chronic overuse of labour hire arrangements. It cited data from June 2021 showing that over 1400 positions within the NDIA, or 26 per cent of the entire workforce, were engaged through labour hire arrangements.
The CPSU argued that labour hire workers were 'almost exclusively' undertaking core agency work. It posited that workload pressures were 'extreme' and that there was a pronounced backlog in reviews of planning decisions.
Additionally, the CPSU highlighted that the lack of job security, inadequate staffing, and high workloads due to KPI (key performance indicator) pressures led to high staff turnover and a loss of specialised knowledge and experience, which further exacerbated existing workload pressures.
Ms Beth Vincent-Pietsch, CPSU Deputy Secretary, set out the difference in conditions between labour hire staff and APS staff working together at the NDIA:
Labour hire staff are working besides NDIA staff, doing exactly the same job, but earning $10 or so less an hour. They're prohibited from discussing their pay, and they can be dismissed with an hour's notice. The lack of paid leave in the event of contracting COVID-19 is an ongoing source of anxiety, as they only receive one day of paid emergency leave in the event that they have to self-isolate.
The CPSU stated that the operations of the NDIS Commission had also been undermined by a staffing model reliant on labour hire contractors. Ms Vincent-Pietsch elaborated:
While the commission has received increases to their ASL [Average Staffing Level] in the past, this increase does not reduce the commission's reliance on labour hire, does not address the workload issues and does not address the serious workplace cultural issues. The workload issues are widely known within the agency, and the most recent APS census found that 85 per cent of staff indicated that they are working above capacity. In the reportable incidents team, staff members at any given time will have literally hundreds of serious incidents in their case load.
The CPSU argued that both agencies needed to be properly funded and resourced with an increase to permanent staffing proportionate to the increasing workloads that each is projected to have into the future. It emphasised that until the overreliance on labour hire was addressed, the CPSU considered that the 'full potential' of the agencies and the NDIS itself would not be reached.
The CPSU also reported that insufficient resources negatively impacted on NDIA and NDIS Commission workplace cultures and staff morale, particularly as the majority of people who worked for the two agencies considered themselves very committed to the purpose of the NDIS.
Labour hire arrangements at the NDIS Commission
As at 31 March 2021, the NDIS Commission had 163 labour hire workers, comprising approximately 33 per cent of its workforce.
The NDIS Commission stated that as part of the 2020 Budget it received a 'staffing uplift' of over 100 permanent ASL, and that while recruiting the additional Australian Public Service (APS) staff it had 'temporarily' increased its labour hire workforce (referred to as 'labour hire surge') to ease front line pressures and reduce backlog.
It noted that the timing of the commencement of the Budget measure had resulted in it having the capacity to retain an additional flexible surge workforce out to the second quarter of 2021–22 to further reduce backlog.
In light of this, it advised:
As at 1 July 2021, 16.7 per cent of the workforce headcount was labour hire.
As at 1 July 2021, when including labour hire, 'labour hire surge' and contractors, 32 per cent of the workforce total headcount were engaged through labour hire or contractor arrangements.
The total value of labour hire contracts entered into between 1 January 2021 and 30 June 2021 was nearly $9.550 million.
The NDIS Commission also explained that prior to additional funding in the 2020 Budget, its workforce comprised approximately 33.7 per cent labour hire.
Labour hire arrangements at the NDIA
In July 2021 the CPSU advised that it believed the NDIA utilised approximately 1430 labour hire staff from 46 different labour hire firms.
Given the lack of centralised, publicly reported data on APS labour hire (as discussed in Chapter 3), the committee sought specific information from the NDIA in order to build a picture of the expenditure on and extent of its labour hire arrangements.
As at 1 July 2021, the NDIA had 1500 'labour hire/contractors' in its workforce, with 24.6 per cent of the total headcount of staff engaged through labour hire arrangements.
As set out in the table below, the NDIA provided a breakdown of the number of labour hire contractors by period of employment as at 30 June 2021. Additionally, it stated that over the past two years, the average period of employment for a labour hire contractor was one year and three months, with the longest period of engagement being five years and nine months.
Number of labour hire contractors by period of employment as at 30 June 2021
Source: National Disability Insurance Agency, answers to questions on notice, 21 July 2021 (received 9 August 2021).
The NDIA advised the committee that it engaged with approximately 15 labour hire companies on a regular basis. It provided the committee with a list of 15 companies, as well as the amount paid to each between the period 1 July 2018 and 30 June 2021. The data showed that the NDIA spent a total of approximately $484.78 million on labour hire arrangements between 1 July 2018 and 30 June 2021.
Top 5 labour hire providers by contract amount
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Hays
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$153,622,382.70
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DFP
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$81,220,377.93
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Randstad
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$52,484,116.36
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Chandler Macleod
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$37,086,829.96
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Hoban
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$35,256,427.28
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Source: National Disability Insurance Agency, answers to questions on notice, 21 July 2021 (received 9 August 2021).
The NDIA noted that the amounts paid to the companies were the 'total invoice' rates, and in addition to GST were also inclusive of:
(2)
administration fees; and
It also noted that the supplier margins and administrative costs varied across the contracts.
The committee requested a breakdown of amounts for each of the three elements; however, the NDIA responded that it did not have the 'structured data' to provide that level of detail.
The NDIA informed that committee that it did not have any visibility of what labour hire workers in its agency were being paid. Dr Lisa Studdert, NDIA Deputy Chief Executive Officer, stated:
We don't have any view of that. That is between the labour hire firm and their contractor or employee.