5.1
A medium-sized employment sector, the transport sector has traditionally employed mainly men in long-term, relatively stable, mostly full-time jobs. The largest occupation group in the sector is truck drivers, though it also includes posties and couriers, taxi and bus drivers, forklift drivers, train drivers, logistics managers, storepersons, and airline workers, among others.
5.2
The committee heard evidence that job security in a number of significant parts of the transport and distribution sector has come under increasing threat from 'a rise in outsourcing' over recent years. Companies' reasons for increasing their use of outsourcing and labour hire workers vary, but all are related to cost‑cutting.
5.3
This chapter looks at Amazon—a relatively new entrant to the transport and distribution sector in Australia—and considers the ways in which its influence on the market is disrupting relationships between employers and workers in the sector.
5.4
It charts the recent struggles of workers and their representatives to maintain secure jobs in trucking, distribution, and the aviation sector, including at some of Australia's biggest transport employers—FedEx Express Australia Pty Limited (FedEx), StarTrack Express Pty Limited (StarTrack), Toll Group (Toll), and Qantas Airways Limited (Qantas).
5.5
Looking at the so called 'Amazon effect'—downward economic pressure exerted on traditional transport companies by 'gig' businesses—on trucking and delivery services, and the decision of Qantas to outsource ground handling operations in 2020, this chapter then considers recent industrial action and its outcomes.
5.6
The chapter concludes with the committee's views, and outlines recommendations aimed at reversing the trend towards insecure work in the transport sector.
Size and characteristics of the workforce
5.7
The transport and distribution industry encompasses transport, distribution, logistics, postal and warehousing, freight, rail and air transport, and courier services. The top occupations are: truck drivers; couriers and postal deliverers; storepersons; bus, forklift and other types of drivers; transport and despatch clerks; supply, distribution and procurement managers; logistics clerks; air transport professionals; furniture removalists; and travel attendants. Most transport workers are categorised under the Australian Bureau of Statistics (ABS) workforce category 'Transport, Postal and Warehousing'.
Size
5.8
In August 2021, the Transport, Postal and Warehousing industry employed approximately 632 700 persons (seasonally adjusted), which accounted for 4.8 per cent of the total Australian workforce. Employment in the industry increased by 3.9 per cent over the past five years. Figure 5.1 below shows a significant loss of jobs in the sector in February and August 2020, due to the impacts of COVID‑19, followed by a sizable rebound in May 2021:
5.9
Truck drivers are by far the largest occupation in the industry, numbering around 114 300 in August 2021, followed by automobile drivers at 44 100, and posties and couriers at 37 000.
Demographics
5.10
Transport, Postal and Warehousing is traditionally a male-dominated industry where formal 'qualifications are generally not required' for many roles and 'almost half of the workers do not have post-school qualifications'. However, certain licences and industry 'tickets' are needed for many roles—such as a truck or forklift licence, construction white card, or 'working at heights ticket'.
5.11
In 2019, the median age for workers in the industry was 44 years and, in August 2020, median weekly earnings in the sector were around $1200 per week—although median weekly earnings for truck drivers were much higher at $1509.
5.12
Close to 80 per cent of jobs were filled by men (August 2021 data), and almost 77 per cent of roles were full-time—a high percentage compared with many industries, including Australia's biggest employing industry, Healthcare and Social Assistance. By way of comparison, the Healthcare and Social Assistance workforce consists of almost 1.4 million people, is over 77 per cent female, and has less than 56 per cent full-time roles.
5.13
Around 21 per cent of the workforce is self-employed—a relatively high percentage compared with most other industries, but not as high as some. For instance, while just 11 per cent of workers in Retail Trade are self‑employed, the figure is 35 per cent in Construction.
5.14
Most workers in the sector were classed as 'essential workers' during the COVID‑19 lockdowns. The National Secretary of the Transport Workers Union (TWU), Mr Michael Kaine, described the 'men and women' of the transport industry as a 'lifeline for us all', saying:
During COVID they proved this amply by delivering to us, running the gauntlet with the virus, keeping the supply chains open, and delivering parcels and food to our homes when we were in lockdown.
Work status and the impacts of COVID-19
5.15
Compared with jobs in Accommodation and Food Services, Arts and Recreation Services, Agriculture, Forestry and Fishing, and Retail Trade—Australia's four most highly-casualised industries—jobs in the transport sector have traditionally been more secure.
5.16
In 2019, before the impacts of COVID-19, the casual share of total employees in Transport, Postal and Warehousing was 22.9 per cent, compared with:
62.6 per cent for Accommodation and Food Services;
40.1 per cent for Arts and Recreation Services;
39.6 per cent for Agriculture, Forestry and Fishing; and
37.5 per cent for Retail Trade.
5.17
This puts the proportion of casual jobs in the sector around the same as for the workforce as a whole, or slightly lower. However, the percentage of self‑employed workers—such as owner-drivers and those engaged by gig platforms as independent contractors—adds at least another 21 per cent to the proportion of workers in non-standard employment in the sector.
Trucking and distribution
5.18
While there are a significant number of owner-drivers in the road transport sector, these workers have traditionally had pay and conditions above Award rates, set out in enterprise agreements achieved through enterprise bargaining. The TWU submitted that, while many of these enterprise agreements came up for negotiation 'early in the pandemic', transport workers 'agreed to defer negotiations to support their employers during uncertain times'.
5.19
However, COVID lockdowns actually saw the demand for trucking and distribution services 'boom', and 'revenues hit record highs for transport operators and the wealthy retailers whose goods they transport'.
5.20
Despite the uptick in demand for road transport and distribution, postal and courier services during the pandemic, the TWU submitted that road transport workers faced 'attacks on their job security' when enterprise bargaining resumed. These 'attacks' came as a result of unprecedented economic pressures on the industry. Mr Kaine explained:
The transport industry is being torn apart by a race to the bottom in terms of standards—driven, quite frankly, by supply chain greed, by buyers at the top of supply chains and, more recently, by the emergence of gig‑economy platforms like Uber and Amazon that pose an existential threat to good, safe jobs, because they pose a threat to transport operators.
5.21
According to the TWU, these pressures—detailed under 'the Amazon effect', below—are impacting the job security and physical safety of truck drivers and delivery personnel around Australia. Mr Kaine reported on a recent TWU survey of 1100 truck drivers, which found:
… over a third have been injured at work; one in four know someone who has died in a truck crash; 50 per cent have witnessed a truck crash; a fifth have felt pressured to speed; one in eight know of employers offering a list of drugs to keep drivers awake on the road; one in two have experienced wage theft of over $5,000; and three-quarters of owner-drivers have in the past two months had to complete runs for no profit at all.
Aviation
5.22
The impacts of COVID-19 lockdowns and border closures have been dramatic in the air transport sector. Mr Andrew Finch, General Counsel and Group Executive at Qantas, described the pandemic as 'the biggest crisis to hit the aviation industry in history'. Mr Finch explained that, in March 2020, '90 per cent or more' of Qantas' revenue 'disappeared almost overnight', causing 'an existential crisis' for the company. With only 'six to eight weeks' worth of cash' left at one point, Mr Finch said Qantas was 'fighting for its financial viability'.
5.23
Facing such a massive fall in revenue, Qantas took 'action that was unprecedented in [its] history and in aviation history'. According to Mr Finch, Qantas raised $1.4 billion in equity, 'mortgaged every asset [the company] could find', and 'started to sell land'. However, the biggest impacts have been on workers: Qantas stood down more than 90 per cent of its workforce, renegotiated contracts with all of its suppliers, and announced 'mass redundancies'—6000 initially, increasing to over 9000—including one third of the executive staff.
5.24
However, it was Qantas' decision to outsource around 2000 ground handling employees, announced on 30 November 2020, which led the TWU to commence proceedings against Qantas in the Federal Court of Australia. On 25 August 2021, Justice Michael Lee 'declared the decision to be unlawful'. Qantas' decision and its impacts on workers are discussed below.
Outsourcing in transport and distribution
5.25
According to the TWU, outsourcing and the erosion of job security have been a problem in the transport sector for decades and a key focus for the union. Outsourcing and an increase in the use of labour hire have occurred as a result of a 'race to the bottom' on contract pricing, caused by 'competing market driven factors' that put downward pressure on transport companies. In order to win contracts, companies look for ways to provide services at 'significantly lower rates' than their competitors—one way to do this is to bypass directly hired workers on enterprise agreements, and engage cheap temporary labour.
5.26
The TWU submitted that outsourcing to labour hire workers and contractors 'has accelerated at an alarming rate within the road transport industry', often leading to 'a compromise on safety, fairness, and ongoing sustainability in the industry'.
Trucking and delivery—the 'Amazon effect'
5.27
The 'Amazon effect' is the name given to the influence that 'new wave' or new technology companies are having on the traditional transport and distribution sector. According to Mr Kaine, the choice of platform companies to avoid using traditional employment models to engage workers means these companies are 'outside the system', and pose a threat to it:
The gig economy doesn't contemplate employers at all; it deliberately bypasses them. Employers have traditionally been a moderating effect within our system. We'll have our arguments, yes, but they're inside the system. Gig companies are outside the system, and this has led to them dragging down standards and leading otherwise good transport operators into reflex panic reactions, pushing down standards in an effort to compete with those that don't even have to obey the rules. This is what we call the Amazon effect.
5.28
With these additional pressures, the TWU said traditionally 'good companies' are now being 'forced' to 'attack their workers' rights' to compete. Another aspect of the Amazon effect is that it breaks the traditional 'chain of responsibility', Mr Kaine said. In the past, the big supermarkets and 'other consumers of transport services' have been held responsible 'for the work that's performed to move their goods', providing an initial layer of 'accountability'. In contrast, the current system is:
… permitting, and being allowed to permit through inaction, companies like Amazon and Uber to create transport operations that deliberately fall entirely outside our existing system of protections ... and that means that not only are workers affected, by not having secure jobs and appropriate rates of pay that reach the minimum—deadly, in road transport, as we all know—but also there's a deeper systemic problem.
5.29
Asked if they believed these new market entrants were a threat to their business, representatives from Toll said they didn't see it impacting them specifically, because their business is heavily-focussed on moving large loads, business-to-business. However, representatives from FedEx were more concerned, saying:
… as people's buying behaviours change and we see less of the consumer going to the traditional bricks-and-mortar shopfront to purchase their goods and more going into this gig economy B-to-C environment, then we will see more of the traditional work that would be transported by FedEx moving into this space. So it is a threat in that sense that there is a change about the way people are now going about purchasing their goods and the way in which those goods are being delivered. We do have to monitor and watch closely over the next short period of time in terms of how that happens.
5.30
The TWU warned of an impending crisis in the road transport sector if companies like Uber and Amazon are allowed to set up unregulated freight delivery programs, where on-demand platform workers are engaged as independent contractors with inferior training, pay, protections and conditions.
5.31
Mr Kaine said that Uber, and Amazon, with its 'last mile' or Amazon Flex offering, 'are literally exploiting workers, paying them half of the minimum wage and putting them in precarious situations, which has actually seen them die'.
5.32
The TWU submitted that 'Uber Freight' and 'Amazon Freight Partners', which have 'expanded rapidly in the US and other foreign markets', will attempt to set up in Australia in coming years if governments do not regulate to stop them—with 'catastrophic' impacts on working conditions and safety.
5.33
With 'heavy vehicle fatalities' accounting for 56 per cent of 'all fatalities as a result of a vehicle collision' in 2019, the TWU said road transport workers are already 'the most likely to be killed at work, with a fatality rate 9.4 times higher than the average across all industries'. According to the union, over the past 10 years, 1896 transport workers and members of the general public 'have been killed as a result of collisions with heavy vehicles alone'.
5.34
The TWU argued that, in practice, the Amazon effect could mean 'this dangerous model of work will soon become the only competitive one', unless governments intervene to regulate against unsustainable and unfair models.
Workforce arrangements at Amazon
5.35
Amazon Australia (Amazon) launched the Amazon.com.au online store in December 2017. Amazon has four fulfilment centres in Australia: Dandenong South, in Melbourne; Moorebank, in Sydney; Lytton, in Brisbane; and Perth Airport. At the time of writing, Amazon was fitting out the new Amazon Robotics Fulfilment Centre in Western Sydney, to be operational in early 2022.
5.36
Amazon directly employs over 3500 people across its business in Australia, and announced in 2020 that it intends to employ another 2000 people—1500 of whom will work at the new fulfilment centre in Western Sydney. Amazon submitted that its employees—including 'software developers, engineers, corporate teams and operational and customer fulfilment roles'—receive 'competitive pay', 'comprehensive benefits', 'subsidised private health care', and 'up to 20-weeks of paid parental leave'.
5.37
Amazon also uses a significant number of labour hire workers, particularly in its fulfilment centres. It has 600 directly-employed workers in its fulfilment centres and uses a labour hire firm—Adecco—to provide '840 casual workers … in a non-peak period'. The number of casual labour hire workers used is higher in peak periods. Amazon reported that it is aiming to have two-thirds of its off-peak fulfilment centre staff being directly employed by Amazon 'by the end of 2022'.
5.38
Mr Bernie Smith, Branch Secretary-Treasurer of the Shop, Distributive and Allied Employees Association, NSW Branch, told the committee about several matters the union has had to address on behalf of Amazon workers, including:
an Adecco associate working at Amazon was reportedly fired after asking to join a union, then asking for additional hours of work—the issue was resolved between the union and Adecco;
an Amazon worker who complained of being racially-vilified at work was not supported by Amazon, even despite there being witnesses to the treatment—this matter has been taken to the Fair Work Commission; and
an Adecco casual who, while in the process of being transferred to a permanent position at Amazon, informed the company she was pregnant—'all of a sudden the job offer disappeared and the company claimed there were issues around her pick rates and her attendance at work which had never been raised previously'.
The third matter is before the Federal Court, where the union alleges 'pregnancy discrimination [and] the silencing of a worker in their workplace'.
5.39
Amazon was asked to respond to reports about the labour hire firm, Adecco's employment practices (low pay, poor conditions, etc), and its representatives denied the claims, saying:
… when Amazon uses a labour hire company, the labour hire company is required to comply with all Australian laws, including in relation to rates and awards, and I'm pleased to confirm that Adecco does that in Australia. So, there is no concern here that the people we are engaging through this agency are not being paid in accordance with Australian law.
5.40
However, Amazon acknowledged that while directly employed fulfilment centre workers commence on a rate of $28 an hour, casual workers employed through Adecco earn around $27 an hour even after receiving the 25 per cent casual loading, for the same work, and do not receive the additional benefits, such as subsidised health care and paid parental leave.
5.41
Amazon was asked to comment on the suggestion that, according to law, casuals should receive a 25 per cent loading on top of the full-time rate—which would be a rate of $35 an hour. Director of Public Policy, Australia and New Zealand, Mr Michael Cooley said: 'I'm not particularly familiar with the references you're making'. Later, on notice, Amazon submitted that the Adecco casual associates are paid 'in line with the Storage Services & Wholesale Award, including a casual loading of 25%'. It is clear Adecco casuals receive a 25 per cent loading on the Award rate, rather than a 25 per cent loading on the rate earned by permanent Amazon employees.
5.42
The committee notes that Amazon chose not to—or was unable to—provide information about the average tenure of either directly employed Amazon associates, or Adecco associates working at Amazon. Other companies participating in the inquiry have generally been able to provide this information.
5.43
Amazon's disappointing engagement with certain aspects of the inquiry—including its failure to provide fulsome, detailed answers to a number of questions—will be further explored in the committee's final report.
Amazon Flex
5.44
A major concern with the way in which Amazon has chosen to distribute its goods, is the introduction of Amazon Flex. While Amazon submitted that it partners 'with trucking companies and carriers of all sizes to move Amazon packages' around Australia (from 'family-owned businesses' to 'some of the largest carriers in Australia'), the company also defended its use of platform workers to take packages 'the last mile'.
5.45
The committee has previously written about Amazon's last mile parcel delivery service, Amazon Flex, in its first interim report. The committee discussed evidence relating to low rates of pay, the use of unsuitable vehicles, inadequate training and unsafe loading practices, as well problems with right‑of‑entry for union officials seeking legitimate access to Amazon work sites.
5.46
A major concern was that the introduction of Amazon Flex in Australia is not creating new jobs, but 'cannibalising' existing, more secure jobs. The TWU submitted that Amazon Flex will simply replace existing transport sector jobs with 'low-paid and unsafe counterfeits':
Prior to the introduction of Amazon Flex in Australia, Amazon outsourced the majority of its last-mile delivery work to established transport operators like Australia Post, CEVA, Toll & Fastway. The expansion of Amazon Flex has only replaced the outsourced component with internal Amazon Flex work. This trend is also consistent with those in the US where the growth of Amazon Flex has seen work increasingly taken away from major transport operators like the United Postal Service and FedEx.
5.47
Amazon insists that its Amazon Flex drivers are paid in accordance with owner driver rates in States including Victoria. However the TWU submitted to the inquiry that the $27 per hour paid by Amazon to its Flex drivers does not comply with the Victorian guidance rates, which for owner drivers of vehicles up to 1 tonne is $40.71 per hour.
5.48
The committee invited Amazon to re-appear to address the contradictory claims and provided Amazon with a copy of the Victorian schedule of owner driver rates in advance. Amazon nevertheless continued to insist that its $27 hourly rate is compliant with $40.71 hourly owner driver rates in Victoria. When asked about the contradictory figures in front of him, Mr Cooley repeatedly declined to answer the committee’s questions.
5.49
The committee continues to gather evidence on Amazon Flex, and intends to discuss this new evidence in its final report, where the issue of on-demand platform work in Australia, and the recommendations of the committee's first interim report, will be revisited.
Outsourcing at StarTrack
5.50
According to the TWU, the Amazon effect has accelerated a trend towards outsourcing. The union said it has noticed a 'significant increase' at StarTrack and FedEx in 'work being contracted out' instead of given to direct hire employees on enterprise agreements.
5.51
At StarTrack, the TWU noted 'an increase' in the use of 'agency workers/outside hire/labour hire workers' for warehousing and freight tasks, with workers in South Australia (SA) estimating around 70 per cent of work in some locations is now done by labour hire. In Western Australian (WA) air freight, the TWU submitted that 'only one in nine workers is a direct employee of StarTrack'. The TWU said StarTrack is also engaging more 'small fleet owners':
The total value in the 2019–2020 of labour hire and related agencies was more than $100 million. We also know by the Company's own admission that approximately 37% of all labour engaged by StarTrack and Australia Post are contractors.
5.52
Conversely, StarTrack told the committee that it is 'acutely aware of the central importance of job security' and that labour hire and casual contractors account for just 19 per cent its workforce. General Manager of Corporate Affairs, Ms Michelle Skehan said:
StarTrack employs 3545 people;
the average length of service is 7.3 years;
StarTrack uses labour hire and contractors 'to address short-term and temporary fluctuations in resourcing needs';
StarTrack is 'the only major transport company' that provides 'full site rates to labour hire and outside hire workers nationally'; and
StarTrack does 'not engage as part of the gig economy'.
5.53
Ms Skehan responded to the claim that 70 per cent of the SA workforce was labour hire by saying that, while there had been an increase in the use of labour hire to cover shortages during the pandemic in SA, labour hire currently sits at 23 per cent in that state.
5.54
Ms Skehan also highlighted the dramatic impacts of COVID-19 on the workforce, saying:
As at 1 October, just a couple of weeks ago, we've so far provided 6,400 employees paid benefits under the pandemic leave policy. That's at a cost of around $5.1 million to the business. As Wayne mentioned before, in recent months, on some days we've had up to 200 employees of StarTrack in isolation, and those mandatory isolation requirements have certainly impacted our business. During the pandemic, to date, we've had 8,887 employees who have been required to isolate, with 7½ thousand of those returning to work and about 600 in isolation as at today.
5.55
Mr Kaine said the TWU represents tens of thousands of small business owner‑drivers who 'have chosen' to be independent contractors, which the TWU supports. However, these owner-drivers need to be 'properly supported' and 'get appropriate cost recovery for their effort and for their entrepreneurial risk'—something Mr Kaine argued is not currently occurring at StarTrack.
5.56
The TWU submitted the 'underpayment' of labour hire and outside hire workers who are 'engaged side by side' with workers on enterprise agreements puts all workers at risk, because:
(a)
it threatens the job security of workers who are engaged on better agreements; and
(b)
'When outside labour is regularly engaged by any transport company the result is generally poorer safety outcomes and increased inefficiencies due to the financial pressure to rush or take risks, and because skilled labour with intimate knowledge of the businesses operations is not properly valued and retained'.
Box 5.1: StarTrack—use of labour hire
Mr Matthew Spring's evidence
Mr Spring is an employee of StarTrack with seven years' experience at the company. Mr Spring told the committee that, when he first started at StarTrack, most of the workers were employees, with labour hire only used to cover surge demand.
Since the pandemic started, Mr Spring said, he now sees around '20 regular outside hire people who come in every day', and 'are guaranteed work'. These workers arrive in Budget branded trucks, pick up deliveries and deliver them.
According to Mr Spring, these workers are like 'regular employees', but when asked they say they are being paid as independent contractors—'on $25 an hour on a flat rate on an ABN'. When Mr Spring raised this issue with StarTrack, he said the company told him the workers were in fact 'permanent part time', on an hourly rate of $26.62 per hour.
In another example, Mr Spring said that StarTrack outsources freight handling to a company called 'SOS', which employs its workers as casuals. These workers may be offered a full position at StarTrack, but not until after 12 months because—according to Mr Spring—'it's too expensive for [StarTrack] to employ them because we have to pay the finder's fee'. In order for StarTrack to avoid paying a 'finder's fee' to the recruitment company, these workers have no job security. Mr Spring said this is common in the industry.
5.57
Inquiry participants, including Mr Spring, suggested that workers for labour hire company, Xpress may be vulnerable to exploitation due to questionable visa status or language barriers. Mr Spring said:
When we suggest that [StarTrack] go and employ some of the people, because they say, 'We can't find employees,' the response is 'There are visa issues.' So in my opinion they know but they choose not to. If they know they can't employ them because of visa issues, they must know what's going on. If they can't employ them because of visa issues, how can Xpress employ them? … [StarTrack] refuse to accept that Xpress is not paying them correctly, but they accept that they can't employ them, because there are visa issues and they can't employ them for the hours they work—and they know exactly how long they work.
5.58
StarTrack responded to the allegations raised in relation to Xpress, which operates in WA and SA. General Manager of StarTrack Operations, Mr Wayne Josh, said StarTrack had investigated the allegations and found no visa issues, and also that:
The individual was paid the EBA rate, which was a labour component, and the on-costs of the vehicle were supplied by that company. We were satisfied at that point, given all the information that we'd seen and sited, that there was no wrongdoing in any of the payments to that individual.
5.59
On notice StarTrack provided further details about the matter, saying it had requested Xpress to provide 'proof of payments made to workers'. Xpress had provided redacted payment summaries demonstrating that the workers were paid $27.70 per hour: 'an amount above the relevant minimums in the StarTrack National Enterprise Agreement for the work performed at StarTrack's Wingfield depot, and which also identified superannuation deductions'.
5.60
StarTrack 'determined the matter closed', and said 'no further concerns' had been raised. StarTrack submitted that it sought and received 'confirmation from Xpress that it maintains workers compensation insurance that covers workers performing services for StarTrack', and StarTrack reported that it has sighted the Certificate of Currency for the insurance policy in South Australia. However, StarTrack also stated that it 'will be conducting further investigations', including into the 'allegations referred to by the Chair' during the committee's hearing.
Box 5.2: StarTrack—erosion of pay and conditions
Kim White's story
Ms Kim White was a supplementary/labour hire worker with StarTrack, employed by APS (Industrial) Pty Limited (APS).
In August 2021, Ms White noticed 'a drop in her pay' and asked APS to 'clarify her rate of remuneration'. She received an email saying:
StarTrack notified APS this year that they wanted us to revert back to Award conditions for all sites rather than their EBA [Enterprise Agreement].
Having worked for over a year at StarTrack, on 'regular hours plus overtime', Ms White's last shift at Star Track was on 20 August 2021. According to the TWU, this was 'the same day [APS's] email was used as evidence by the TWU of the job security threat to employees'.
Ms White 'did not receive her next roster'. Her husband—a direct employee at StarTrack—contacted his manager to ask why Kim was not rostered. According to the TWU, Kim's husband was told that 'Kim would "no longer be required"'.
The matter is now the subject of 'a general protections dispute' that has been lodged before the Fair Work Commission in Brisbane.
5.61
Representatives of StarTrack were asked to comment on Ms White's case during a public hearing. StarTrack's General Counsel and Corporate Secretary, Mr Nick Macdonald, said the case is 'an issue between her and her employer, rather than between her and StarTrack'. On notice, StarTrack confirmed that it is, in fact, a party to the case in the Fair Work Commission. However:
StarTrack maintains the view that it is not a party to the dispute—which is a matter for Ms White and her employer.
Ms White raised a claim with the Fair Work Commission against the labour hire agency that employed Ms White, and against StarTrack. As part of her claim, Ms White states that she was dismissed from her employment. StarTrack did not employ Ms White and does not consider that it has breached any provisions of the Fair Work Act 2009 (Cth) in relation to Ms White. Notwithstanding, StarTrack attended a conciliation conference regarding the claim on 19 October 2021, as part of the Commission’s ordinary processes. StarTrack will take account of any findings reached in relation to this matter that relate to StarTrack.
Job security at FedEx
5.62
Similar trends towards outsourcing and greater use of labour hire have been observed at FedEx, with the TWU reporting that directly engaged owner drivers on enterprise agreements 'are being phased out and replaced by owner drivers on inferior pay tied to the Award':
These owner drivers have fewer rights, such as guaranteed hours, superannuation and redundancy provisions. These lower paid drivers now make up two thirds of all owner drivers engaged by FedEx, demonstrating a trend towards slashing pay and conditions.
5.63
Conversely, FedEx representatives talked about how much the company prides itself on its commitment to job security, and said that, 'wherever possible, the company will utilise full-time transport workers in preference to casual or part-time transport workers, labour hire and outside hire'.
5.64
Managing Director of Operations at FedEx, Mr Peter Gutsche, said the company has 'robust processes in place' to assess its outside hire and labour hire suppliers to ensure that they 'are fully compliant with applicable laws, including in respect to work health and safety and chain of responsibility'. FedEx's current enterprise agreement with the TWU also 'requires' FedEx to 'ensure outside hire and labour hire suppliers pay their staff at rates above the applicable minimums'.
5.65
Asked about the TWU's claims that FedEx was 'phasing out' owner drivers on enterprise agreements in favour of drivers on Award rates, Mr Gutsche said he believed this allegation was 'in reference to some legacy owner-drivers', on 'very aged contracts, going back to the very early TNT days'. These are contract arrangements the company is 'not looking to take forward at this point in time'. Mr Gutsche clarified that owner drivers on those terms now are secure in their employment, but if they choose to retire or leave, they will be replaced with 'directly employed company employees', rather than similar contractors.
5.66
FedEx was asked if it recognised 'the link between unsustainable rates of pay and unsafe driving practices'. Mr Gutsche replied:
Yes, we do. We need to ensure that we pay our contractors the appropriate rate of pay to ensure that they're maintaining their vehicles in the correct way. So, in addition to having in place the processes which we do today, that enables us to audit and review the arrangements that they have for maintaining vehicles. They need the capacity to do that, and part of that is about the rate of pay in order to ensure that that can be done. So I would say we do recognise that link.
Toll—a 'good track record' in the industry
5.67
Representatives from Toll emphasised the company's strong focus on safety and job security. President of Global Logistics at Toll, Mr Peter Stokes, said that Toll 'prides itself on being an employer of choice in the Australian transport and logistics industry'. According to Mr Stokes, Toll:
provides 'some of the best pay, conditions and job security in the industry';
treats its workers 'very well' in order to 'differentiate' itself from its competitors;
is 'committed to a greater proportion of permanent employees across [the] Australian business';
has been reducing its use of 'casuals and fleet operators' (owners of trucks who employ drivers), despite the challenges posted by the pandemic.
5.68
Mr Stokes acknowledged that the transport and logistics industry is currently 'witnessing significant disruption', with new technologies, and new market entrants 'influencing how goods make their way to the end customer'. However, Toll has chosen to maintain its focus on a 'permanent workforce', while also acknowledging the 'critical role' of casuals and fleet operators in helping to manage 'peak demand' periods, like Christmas.
5.69
Mr Stokes said Toll also 'looks after' its casual workforce:
Our casual employees are paid on an hourly basis, which is at or above award rates, in alignment with our agreements. Casuals at Toll are not paid on a per-unit or per-delivery basis…
5.70
The TWU acknowledged that Toll is 'known and recognised' as a 'safe, fair, and sustainable' employer. It has 'a good track record' in terms of its 'attitude' and dealings with employees. However, even Toll has not been immune from the pressures of the Amazon effect. The TWU said: 'It is important that operators like Toll, are not pressured to compromise on safety or the job security of their employees to maintain a competitive edge'.
5.71
A number of companies have been asked during the inquiry if they monitor the pay, conditions and performance of their contractors in relation to their treatment of workers, workers safety and incidents, etc. Some companies have indicated they do not—for instance, see the evidence from Qantas in the next section.
5.72
However, when Toll was asked this question—specifically whether it keeps 'a record of the injury rates, and death rates', of workers within its supply chain when those workers are engaged through labour hire or contracted to other operators, Mr Stokes said:
Yes, we do. We record in our safety statistics for any contractor who works for us as well, whether that is an injury or a serious safety incident, even not resulting in an injury. They are all reported through to our business, including all of our casuals, and all the casuals might work at other companies as well.
5.73
Mr Stokes said some other large businesses, such as Linfox, have similar systems in place, and he would recommend it for all major transport and logistics operators, because: 'It's the only way that you can ensure that everyone is looking after the safety of everyone who works in their business'.
5.74
In relation to rates of pay for labour hire or contracted workforces, Mr Stokes said 'we can't necessarily force' contractors to 'put a certain rate in', but Toll monitors and 'manages' this, and only selects contractors who pass agreed criteria, including having adequate 'safety and fatigue management systems'.
5.75
Ms Elizabeth Ferrier, Group Head of Employee and Industrial Relations at Toll Group, added that where Toll engages fleet operators, the company has provisions in its enterprise agreement 'in relation to the minimum payments that need to be paid to those employees', and Toll audits 'those requirements'.
Outsourcing at Qantas
5.76
On 30 November 2020, Qantas announced it had decided to outsource ground handling functions at ten airports where those functions were previously performed by workers who were directly engaged (by Qantas Air Services), or engaged through a subsidiary, Qantas Ground Services Pty Ltd. The decision impacted approximately 2000 ground handling staff and was successfully challenged as 'unlawful' by the TWU in the Federal Court of Australia in 2021.
5.77
Qantas argued that its outsourcing decision was entirely based on the impacts of COVID‑19 (evidence discussed in detail below). However, Mr Finch agreed with the assertion that Qantas has previously moved to indirect employment arrangements to 'ensure that the needs of the business, the markets in which [Qantas] competed and generally the competitive landscape allowed … services to be provided in a competitive fashion'.
Qantas Ground Services
5.78
In 2009, Qantas set up an 'internal labour hire company', Qantas Ground Services (QGS). Workers engaged by the new entity were not covered by the collectively-negotiated Qantas enterprise agreements that workers employed by Qantas Airways Ltd were covered by, even where they were 'doing the exact same work and working beside the exact same people'. Committee Chair, Senator Tony Sheldon, noted that this model was 'pioneered' by Qantas and 'replicated by companies like BHP', with its Operations Services labour hire division.
5.79
Mr Kaine said that QGS was created shortly after the union had just signed the 2008 enterprise agreement with Qantas, at a time when all workers 'were engaged directly by Qantas in a mainline agreement':
I signed off on an arrangement in good faith, and, literally days after that document was signed and registered, there was an announcement made that the QGS labour hire company would be created and that from then on workers would be engaged in that entity on inferior terms and conditions.
5.80
This experience led Mr Kaine to believe that more recently, in 2020, Qantas used the pandemic as 'an opportunity' to pursue an outsourcing agenda, to further move away from a unionised workforce.
5.81
Asked if Qantas would have set up QGS if it had been required by law to provide QGS workers with 'the same pay and conditions as their Qantas [Airways Ltd] counterparts', Mr Finch said:
If QGS could not accommodate the needs of the businesses which it served then there would have been little need to set up QGS, that's true … It depends on what other work practices would be able to be implemented through a separate entity like QGS—productivity changes, efficiency changes, roster changes and the like.
5.82
On notice, Qantas also responded that QGS and other internal labour hire providers 'are not used to pay employees lower rates of pay'. Qantas said these entities 'pay at or above market rates', and are 'covered by enterprise agreements negotiated with the relevant unions'.
Why were these jobs outsourced?
5.83
Qantas was in a good position going into the pandemic, with multi-billion dollar profits, large dividends and the highest paid airline CEO in the world, but argued it had to act drastically to prevent financial collapse. Group Executive of Corporate Affairs at Qantas, Mr Andrew McGinnes, reported that total revenue at Qantas 'is expected to cross $20 billion in revenue losses' by Christmas 2021, and its 'statutory losses across two financial years now stand at over $5 billion'. This is why the company 'acted early to raise capital and restructure its business', Mr McGinnes claimed—'to protect the national carrier from collapse and, in doing so, preserve as many jobs as possible'.
5.84
Qantas claimed that saving on wages was not the company's aim when it decided to outsource ground handling services. Mr Finch claimed 'wages were not considered at all'. Qantas could save over $100 million per year because of the efficiencies gained by using 'specialised ground handlers'—dnata, Swissport, and Menzies:
This is their business; this is what they do worldwide, and they do it much more efficiently. … Let's put it in context. We insourced ground handling at only 10 of our roughly 120 ports worldwide. We had no scale, no efficiencies and, following COVID, no ability to invest further in that business. The dnatas of the world operate in nearly 300 airports. They have 23,000 employees, and they work for 270 airlines. So, in any airport at any one time, they've always got a customer that's using the ground-handling business …
5.85
As well as saving on wages, Mr Finch claimed Qantas would save on 'maintenance on equipment', 'hire and leasing of storage areas for that equipment', and 'utility costs'.
5.86
Qantas representatives were asked to comment on a 2011 article from the Sydney Morning Herald in which reporter Matt O'Sullivan reported on leaked internal documents revealing Qantas was—at that time—planning to outsource its ground handling operations by 2020. Mr McGinnes claimed the choice to outsource ground services was 'a direct result of the impact of the [COVID-19] crisis and the implications that had for the airline'. In fact, before the pandemic, Mr McGinnes said Qantas was 'actively hiring into its ground-handling function' and investing in new 'ground‑servicing equipment'.
5.87
Mr Finch also disputed the idea that the plan to outsource ground services pre‑dated the pandemic, saying: 'It would have been a very odd plan that had us investing heavily and employing into our ground-handling business in early 2020'. Asked to explain how Mr O'Sullivan could have correctly identified in 2011 the very year—2020—that Qantas would choose to outsource ground services jobs, Mr Finch said: 'Unless he had advance notice of the COVID pandemic, I would say it was a mere coincidence'.
Federal Court Judgement
5.88
Federal Court Justice Lee ordered on 25 August 2021 that Qantas had contravened section 340(1)(b) of the Fair Work Act 2009 (Cth) (Fair Work Act) in announcing the decision to outsource ground handling operations 'by taking adverse action against':
(c)
affected directly-employed Qantas Airways Limited and QCatering Limited employees covered under the Transport Workers Agreement 2018 'by prejudicially altering Qantas employees' positions'; and
(d)
affected employees of QGS covered by the Qantas Ground Services Pty Limited Ground Handling Agreement 2015 'by altering QGS' position to its prejudice in relation to its contract for services with Qantas'.
5.89
Justice Lee did not agree with Qantas' argument that the decision-makers were 'solely concerned' with 'operational continuity', and stated that he was 'comfortably satisfied' that:
… part of what distinctly mattered to [the decision-makers] was the prospect of the event of Qantas having to deal, in 2021, with the actual exercise by the Union and employees covered by the Enterprise Agreements of the workplace rights identified, and part of [the] reasoning in endorsing outsourcing in November 2020 was to prevent an anticipated event, being the exercise of these rights ... This was all part of [an] overall desire to avoid the Union being able to exert industrial power by organising protected industrial action following the Enterprise Agreements reaching their nominal expiry date and protected action being taken for the purpose of supporting or advancing claims in relation to a proposed enterprise agreement.
5.90
In other words, Justice Lee agreed with the union's argument that Qantas had chosen to outsource those operations at that time to prevent employees engaging in protected industrial action and to circumvent enterprise bargaining.
Government assistance to Qantas
5.91
Qantas was asked about the government assistance it received through measures designed to support the company during the pandemic. Mr McGinnes said the company had received 'approximately $1.6 billion', and is 'conscious that it is a significant amount of money and that it is taxpayer money'. Mr McGinnes maintained that Qantas is 'very grateful for that funding', and outlined what it was used for:
… a large proportion of it went to support our people directly who were stood down, who had no work and who were at home wondering how they were going to make ends meet. For them, that was an absolute lifeline. That was through JobKeeper. That's been half of it. The other component has been fee for service, in terms of the repatriation flights that we've operated—over 400 of them—to bring about 30,000 Australians home and about 1,800 freight flights that we've operated to take a lot of Australia's exports—often agricultural exports—to the world, given that cargo markets have been turned on their head through the pandemic.
5.92
Mr McGinnes was asked if there were any conditions on the funding which required Qantas to 'not outsource or to consult the government before making any outsource decisions', regardless of the government assistance. Mr McGinnes replied: 'In terms of the ground-handling decision, there was no requirement for us to consult with government on that'.
5.93
Qantas was asked to explain the company's decision to outsource 2000 workers after accepting JobKeeper payments for them, when 'the intention of JobKeeper [was] to keep workers connected'. Mr McGinnes argued that the purpose of JobKeeper was 'to keep people connected to jobs that had a life beyond the pandemic'. It was the view of Qantas that the ground handling jobs 'were not sustainable beyond the pandemic'. The committee notes that these jobs continue to be performed, albeit now by an outsourced provider.
Effects of outsourcing
5.94
The TWU reported a 'drastic decline in safety' as a result of the outsourcing of ground handling at Qantas. Mr Kaine said the unions has seen 'holes in planes; incorrect weight information given to pilots; and damaged property, including a child's smashed wheelchair'. Concerns were also raised about wages and conditions for workers in the companies to which Qantas has outsourced its ground operations, primarily Swissport.
5.95
On 16 November 2021, the Australian Transport Safety Bureau reported that a safety problem which forced a Qantas Boeing 787 undertaking a Sydney to Perth flight to return to Sydney Airport, was partly caused by the inexperience of the Swissport ground staff.
5.96
Qantas was asked to comment on the Fair Work Commission's rejection of Swissport's enterprise agreement, which failed the 'better off overall' test (or BOOT), as well as media reports about substandard working conditions for Swissport workers. Mr Finch said he could not 'comment on the veracity of those reports', but acknowledged having seen them.
5.97
Mr Finch referred to the 'global' scale of Swissport, which has 66 000 employees in over 307 airports worldwide, who—Mr Finch suggested—'are seemingly happy to work with and want to work with that company'. Swissport 'has to comply with the laws, the regulations and the standards' of the countries it works in, and Qantas expects Swissport and other contractors, such as dnata and Menzies, to comply with Qantas' supplier requirements, which include 'safety and management systems'. Mr Finch concluded: 'We've not had any instances of which we're aware of Swissport, dnata, Menzies or Oceania failing those supply requirements'.
5.98
Mr Finch was asked if failing the BOOT test when developing an enterprise agreement, or failing to pay workers 'a living wage', was not a 'breach' of the supplier requirements for Qantas. Mr Finch said: 'Why would we be intervening in negotiations between Swissport and their workforce, any more than we'd expect Swissport to be intervening in ours?' He also asked: 'What is a living wage?'
5.99
Asked if they understood that people working for contractors and labour hire companies providing ground handling services for Qantas 'are being paid less than the Qantas direct workers were being paid' for the same work, the Qantas representatives said they did not 'have information on the pay rates and income of those contractors', and 'whether they're part time versus casual versus full time'. Mr Finch added:
We pay on a per turn basis, so, when an aircraft comes in to discharge and then receive passengers, we pay per turn of that aircraft. We don't have a breakdown on what their costs are for each turn. There will be some capital expenditure, there will be some utility, there will be some leasing and of course there will be staff.
5.100
Qantas was asked why the company chose not to have visibility around the rates of pay for workers performing work for the company through contractors and labour hire providers. Mr Finch suggested pay rates are not the priority issue for Qantas in relation to these contracts, with issues such as 'the efficiencies they provide'—'the cost savings'—being more critical: 'Our focus has been simply on efficiency, cost savings and variability and, to the extent we can and to the extent that it's relevant, avoiding capital expenditure'.
5.101
In addition, with almost 12 000 suppliers, Mr Finch claimed it would be 'impossible' for Qantas 'to interrogate the terms and conditions', including pay rates, of all of its suppliers. Mr McGinnes added to this that Qantas relies on what it sees as the inherent 'safeguards built into the system' by the existence in Australia of 'an enterprise bargaining process', 'award rates', and 'minimum wages'—which 'should give us all confidence regarding those things'.
5.102
Mr Donald Dixon, a Qantas employee of more than 20 years until he was among the 2 000 workers outsourced during the pandemic, described the impact the decision has had among his colleagues, many of whom had worked at Qantas for decades:
The other thing is that the amount of people who have rung me, as the head delegate, with mental health issues is horrible. I get phone calls from people who are losing their homes. They are going to see doctors and they're on antidepressants. It's just horrible…When you ring up the boss and say, 'I'd like to go for the job. I'm 55 years old'—or 60 or whatever the case may be—the phone doesn't ring back. People are saying to me, 'I've had 50 or 60 job interviews. I didn't get a call back'—as soon as they mention their age. Yet, at Qantas, they had responsibilities that far exceeded the jobs that they were going for—putting baked beans on the shelves at Woolworths.
5.103
As at the time of writing, the committee has not yet heard evidence from Swissport. However, the committee has invited Swissport to give evidence at a future public hearing, and may revisit this matter in its final report.
Box 5.3: Qantas outsourcing
Theo Seremetidis—stood down from Qantas Ground Services
Mr Seremetidis worked for Qantas for almost seven years. While working for Qantas Ground Services in 2020, Mr Seremetidis was stood down, and his role 'was later outsourced'.
According to Mr Seremetidis, working conditions at Qantas have eroded over time. In his earlier years at Qantas, 'there were plenty of hours for everybody', 'good conditions and fair pay', and management 'really cooperated' with workers. However, Mr Seremetidis noticed a 'change in culture', where management became 'more aggressive', 'changing the rosters without consultation', 'cost cutting' and compromising safety.
To improve safety for workers, Mr Seremetidis became a health and safety representative. He reported successfully issuing 'about 25 provisional improvement notices in one year' for breaches under the Work Health and Safety Act 2011.
Impact of the pandemic
Mr Seremetidis reported a number of serious concerns with safety at Qantas early in the pandemic:
At the start of the pandemic, we were directed to clean planes with just water—no sanitiser for the trays or anything. [Personal protective equipment] PPE was not mandated despite managers wearing hazmat suits. We were not even provided with masks or disinfectant. I made numerous approaches to management to ask for further PPE or for the risk assessments they had done. After everything was declined, I directed a group of workers to cease unsafe work, which is one of the health and safety representative powers. On the day this occurred, I was stood down immediately. At the same time, I and other workers received threats of disciplinary action.
The day Mr Seremetidis was stood down was his last day at Qantas. His position was later outsourced along with 2000 others in February 2021.
Mr Seremetidis reported loss of income and psychological impacts, including 'stress and anxiety'—'I didn't know what they were going to do to me or what allegations they were going to bring against me'—as well as being concerned for his co-workers who were left without a safety rep.
Ongoing legal action
5.104
Qantas has appealed the ruling and an appeal hearing will likely be set for February 2022. In the meantime, 'reinstatement hearings' have been set to begin on 13 December 2021, where the Federal Court will hear evidence on whether or not reinstatement is possible or desirable:
These remedy hearings will see the TWU and Qantas provide evidence over whether the outsourced workers should have their roles reinstated at the airline. Other means of compensation will be discussed at a later hearing, if necessary.
The union has continued to push for the unlawfully outsourced workers to be reinstated at the airline.
5.105
A TWU survey of more than 1500 of the approximately 2000 outsourced workers revealed 78 per cent want their old jobs with Qantas back.
5.106
Justice Lee indicated that he wanted a decision handed down on reinstatement by Christmas so that 'a very large number of people [could] have some certainty about their lives'. However, it has been reported that Justice Lee previously indicated it is 'unlikely' the workers will be reinstated, due to complicating factors including that workers have received 'finalised redundancy payouts, the time that has passed and the fact that many affected workers are likely to have undertaken new jobs'.
Industrial action and its outcomes
5.107
The year 2021 has seen significant industrial action across the transport sector. With a number of enterprise agreements up for re-negotiation, and many transport companies doing unprecedented levels of trade, the TWU resumed bargaining in 2021 after holding off in 2020 due to the pandemic. Disputes with some companies have led to industrial action, including strikes and stoppages.
5.108
Mr Kaine was asked if he considered it responsible to 'threaten the supply chains of Australian retail' with transport strikes when retail was already under strain due to COVID-19. Mr Kaine responded that 'decades of evidence' support the view that 'poor conditions in road transport', along with 'poor job security and poor rates' leads to 'increased incidence' of truck crashes and fatalities, endangering drivers and the general public. As such, Mr Kaine argued that fighting to defend the pay and conditions of drivers was the 'responsible thing to do'.
5.109
The TWU also highlighted the 'legal industrial right' of workers to 'withdraw their labour' as part of the bargaining process, saying workers in the transport sector 'have gone through the process of agonising and detailed negotiations with these companies over months', and strikes are a last option.
5.110
The TWU submitted that the union has sought to strengthen job security through recent enterprise bargaining rounds by pursuing the following 'core claims':
Enhanced consultation clauses, particularly in relation to decisions about the introduction of outside hire/agency workers/labour hire with a requirement for each FedEx and StarTrack to consult with the TWU before any definite decision is made. …
Improved transparency in relation to the engagement of alternate labour by enhanced auditing and compliance provisions. …
Enhanced full utilisation provisions that ensure that all available overtime is first offered to full-time direct hire employees, part-time direct hire employees and direct hire owner drivers before it is otherwise outsourced to labour hire agencies or any other form of alternate labour. …
Outside hire ratios that limit the amount of outside hire engaged by the businesses and protect our members position within the business. …
5.111
While being 'met with reluctance to include these provisions' by some companies, the TWU was able to sign agreements with Toll, StarTrack, and others, that guaranteed job security. However, the TWU reported that FedEx 'has advised the TWU it does not consider these matters appropriate for inclusion in a negotiated enterprise agreement'.
Agreements with Toll and others
5.112
At the public hearing, Mr Kaine announced that the TWU had reached an 'in‑principle arrangement' with Toll on a deal that would 'provide enhanced job security provisions … and an industry-leading 15 per cent superannuation'.
5.113
The deal included 'enhanced protections around outsourcing' and 'enhanced provisions relating to priority'—meaning work would first be offered to permanent workers before being given to outside hire. According to Mr Kaine:
There is understanding that companies at times need to flex up their workforce to deal with peaks. We've always been able to deal with that in transport, and Toll, through this settlement, has acknowledged the need to get the balance right between the need to meet peaks and the need to ensure that the workforce have secure jobs that can't just be contracted out willy-nilly. This is a company that has now agreed to a proportion of work always remaining permanently engaged by the company and to discussions and investigations about how that proportion can be increased over time.
5.114
On 28 October 2021, the TWU announced that it had signed agreements with six major road transport companies—Linfox, BevChain, Toll, Global Express, Ceva and ACFS, which 'lock in key job security provisions, as well as fair pay and super increases, setting the stage for when we're back at the bargaining table in 2023'. Following the TWU’s and StarTrack’s appearance before the committee, an agreement was also reached between the two parties, with FedEx the only employer continuing to resist calls for job security.
Proposals for reform
5.115
According to Mr Kaine, the current industrial relations framework and bargaining system 'allow employers to contract out jobs'—in other words, 'job insecurity … is sanctioned by our current system'. The TWU argued there is a need for legislative change to prevent companies simply outsourcing when they are 'under increasing pressure to contract out work' due to the Amazon effect:
So we're getting squeezed from both sides as transport workers, and that's why these workers have made a stand across the economy in the last few weeks and will do so in the coming weeks.
5.116
Mr Kaine recommended that traditional transport companies continue to support workers—'in partnership'—by signing onto 'appropriate arrangements which ensure job security', and support the unions by supporting the recommendations of the Job Security inquiry. In particular, Mr Kaine encouraged transport employers to lobby the Australian Government to instigate reforms that will 'bring those operators operating outside of the system—getting a completely unfair advantage, exploiting workers and bypassing good employers … back within the system'.
5.117
The key recommendation from the TWU to protect job security and safety in the transport sector was its call for the Australian Government to put in place a National Tribunal which could provide transport workers in 'dependent arrangements', including owner drivers and gig workers, 'access to the rights they deserve while promoting fair, sustainable and safe competitive practices':
A tribunal which has the ability to determine the extent of rights and entitlements categories of workers should receive, depending on the degree or level of dependency.
A tribunal which has the capacity to resolve (including where necessary through binding decisions) transport supply chain / contract network disputes, including those in relation to the unfair terminations of engagement.
The ability for all workers to join and be represented by their union in the creation of such standards. An ancillary role for the tribunal to facilitate collective bargaining.
Ensuring all such standards and conditions are legally enforceable on all supply chain and contracting parties to ensure that minimum standards are upheld. An effective enforcement regime to ensure that these legally enforceable standards are realised.
5.118
Mr Kaine said such a tribunal would be an 'independent body' that could 'set and enforce minimum standards' in the industry to provide certainty for businesses and workers, and 'a level playing field' for employers.
5.119
Toll was asked if it would support the creation of a tribunal 'to inquire into arrangements like Uber and make determinations about minimum entitlements'. Ms Ferrier said that, as 'an industry leader in rates and conditions', Toll would support 'lifting and levelling … the playing field, primarily to ensure that workers work in a manner which is safe and sustainable'. Toll did not have a view on the exact mechanism for achieving this, but expressed support for initiatives that would create 'a level playing field for operators'.
5.120
FedEx agreed that all companies should be held to the same standards. Mr Gutsche said:
In our view, all transport companies, both new entrants and established providers, should be held to the same regulatory standards that we are held to in terms of engaging contractors and owner-drivers. We are concerned that the current regulatory environment does not create a level playing field amongst all providers in the industry. The state and federal governments should ensure that all transport companies play by the same rules and should be obligated to provide their contractors and owner‑drivers with fair rates and conditions.
5.121
Mr Peter Anderson from the Victorian Transport Association and the Australian Road Transport Industrial Organisation, argued for 'minimum standards in supply chains'. Asked if enforceable minimum standards should include making clients accountable for ensuring their contractors are operating 'in a fair way', Mr Anderson said 'a minimum standards regime' would provide assurance for customers that suppliers they engage are operating with an adequate level of 'ethical and physical standards'—'So, yes, we believe there should be that level of understanding and formalised standards between the parties in the contract'.
5.122
Mr Anderson added that a minimum standards tribunal could enforce these standards:
What we really need is a level of minimum standard upon which people operate—that we agree, as an economy and as a community, that we can't go below a certain level. I would like to see a minimum standards tribunal. That would help the industry in a great way.
Committee view
5.123
Transport workers move our country. They help get us safely where we need to go; transport the fuel, medicines, produce and goods we rely on; and deliver mail and packages to our loved ones.
5.124
During the pandemic, transport workers kept Australians in lockdown supplied with essentials, kept businesses trading by delivering products sold online, and transported key medical supplies, including COVID tests and vaccines, around the nation.
5.125
While some transport workers were stood down from their jobs as a result of the pandemic—mainly in the aviation sector—many transport workers stood up. Truckies, posties and couriers carried unprecedented volumes of cargo, as the demand for groceries, consumer goods, and even garden supplies, reached unexpected highs.
5.126
In this context, many transport workers were on the frontline of COVID-19. Putting themselves and their families at risk, travelling across state borders, required to maintain strict hygiene practices, and manage regular testing regimes.
5.127
Transport workers are essential, and their jobs are essential.
Aviation—responding to outsourcing
5.128
The committee is concerned but not entirely surprised that Qantas chose to use the cover of a global pandemic to outsource 2000 ground handling jobs.
5.129
There will always be commercial arguments to be made as to the savings and efficiencies achieved—and the committee has no doubt that these arguments were a factor in the decision—but, like Justice Lee, the committee believes the desire to prevent workers from exercising their industrial rights was front and centre.
5.130
As concerning as the loss of 2000 quality Australian jobs, is the fact that Qantas has no interest in the pay and conditions that will be offered to the workers who will now handle its ground services. Representatives from Qantas told the committee that it is not a priority for Qantas to make itself aware of the pay rates or contract conditions offered by its contractors—Qantas is interested in 'the efficiencies they provide' and 'the cost savings'.
5.131
It is deeply concerning to this committee that Australia's largest airline—our national airline—does not care enough about Australian jobs to insist that these subcontracted workers are paid and treated fairly.
5.132
The committee believes it is a failure of Australian Government policy that Qantas was handed between $1.6 to $2 billion in public bailout money, and at the same time was permitted to illegally outsource 2000 ongoing jobs. This disgraceful behaviour should prompt the introduction of new standards upon highly profitable large businesses in receipt of large sums of public funding.
5.133
The committee recognises the merit of an independent body with the power to make and enforce binding standards on aviation supply chain participants, including airports and their central role. Those standards include 'same job, same pay' for outsourced and labour hire workers performing functions directly connected to aviation operations, job security protections, and fair procurement standards. The committee recommends the Australian Government consults with industry participants, including unions, employers, and other stakeholders on the development of this body.
5.134
The committee recommends the Australian Government imposes obligations upon companies in receipt of future public bailouts, which prioritise job security and guarantee that companies cannot follow Qantas’ lead, and exploit emergencies to engage in illegal workforce restructuring.
Road transport—defending job security
5.135
Without security in the road transport sector, safety suffers. Drivers forced to work long hours to make a living wage are more vulnerable to fatigue. Workers pushed to meet unrealistic deadlines may resort to speeding, or breaking road rules, putting themselves and the public at risk.
5.136
Unions and workers in this sector have worked hard over decades—alongside employers—to craft enterprise agreements that provide fair and adequate pay, reasonable conditions, and appropriate safety standards. These achievements are now being put under threat.
5.137
New market players in the transport and distribution industry, like Uber and Amazon, are threatening traditional employment relationships and undermining fair and reasonable contracting arrangements by engaging workers on insecure and inferior terms. This is the Amazon effect.
5.138
Employers must recognise that participating in this 'race to the bottom' will not benefit them or the sector. It can only lead to the loss of skilled and experienced workers, an increase in accidents and fatalities, and skills shortages in the sector—as demonstrated by the truckie shortages in the United Kingdom.
5.139
The committee commends Toll, StarTrack, and the other companies that have signed agreements with the TWU that include provisions that protect job security. We strongly encourage FedEx to agree to these job security clauses—to protect and strengthen the transport industry in Australia, and ensure it can continue to provide secure, high quality jobs into the future.
5.140
The implementation of Recommendations 1, 2, 3, 4 and 7 from Chapter 2 in this report would ensure that:
labour hire workers had the option to sign on under the enterprise agreement in force at their host employer;
wages and conditions for labour hire workers were equivalent to directly employed workers;
employers were not able to specifically utilise labour hire as a means to reduce wages and conditions of their permanent workforce;
labour hire workers would be protected by a national labour hire licensing scheme covering all business sectors, and requiring mandatory registration and continuous compliance by all operators with all legal obligations; and
labour hire workers would be encouraged to promptly raise workplace health and safety concerns with both their host organisations and labour hire operators, and be safeguarded from reprisals.
5.141
In its first interim report, which addressed the insecure, precarious and often exploitative conditions of work in the on-demand platform sector, the committee made a number of recommendations designed to provide greater protections for workers who are not employees, including independent contractors. These included:
Recommendation 7, aimed at expanding the definitions of 'employment' and 'employees' in the Fair Work Act 2009 to 'capture new and evolving forms of work', and extending the coverage of rights and standards protected under the Act to workers who fall outside the definition of employment, 'including low-leveraged and highly dependent workers'.
Recommendation 9, which would expand the powers of the Fair Work Commission to allow it to 'resolve disputes and make orders for minimum standards and conditions in relation to all forms of work', as well as to:
adjudicate work status disputes;
set 'binding minimum standards and conditions in relation to non-standard forms of work, regardless of employment status'; and
resolve disputes 'in a low-cost and effective manner'.
Recommendation 11, which was designed to provide:
… greater protections for independent contractors who are sole traders by establishing an accessible low-cost national tribunal to advise on, oversee, and make rulings relating to employment relationships involving low-leveraged independent contractors, such as those in the rideshare and other platform sectors.
5.142
While the committee sought feedback on, and intends to revisit, the recommendations from its first interim report, these recommendations—if implemented—would provide significant benefits for many workers in the transport sector.
5.143
However, evidence presented in this report demonstrates that there is also a need for specific additional reform in the transport sector, due to the nature of the work and the inherent risks to safety. As such, Government must move to enforce minimum standards in the industry and protect the standards and conditions that workers have struggled to achieve over decades. All transport companies, including new entrants, should be held to the same minimum standards on safety, pay and conditions.
5.144
Companies that contract out work must be accountable for ensuring that their contractors adhere to the same standards to which they themselves are held. Workers who work side by side, doing the same job, should receive the same pay and labour hire must not be used to undermine better, and more secure jobs.
5.145
The committee is supporting the establishment of an independent body to provide oversight of workforce arrangements, standards and conditions in the transport sector. In establishing such a body, the Government should consider jurisdictional issues—specifically which categories of workers should be covered by the body, and which functions it should undertake—as well as which functions would be better undertaken by the Fair Work Commission.
5.146
The committee recommends the Australian Government works with the Transport Workers' Union, the transport industry, and relevant stakeholders to establish an independent body, such as a National Transport Tribunal, which would:
review and set minimum standards for safety, pay and conditions for all operators and workers including contractors in the transport sector;
ensure minimum standards are enforceable on all supply chain and contracting parties, including by providing an effective enforcement regime and penalties for infringements;
adjudicate transport contract network disputes, including in relation to the unfair termination of engagements; and
defend the rights of all workers, including contractors, to join and be represented by their union and facilitate collective bargaining.