Victoria Announces Inquiry Into Labour Hire Industry and Work Security
Thursday 19 November 2015 @ 12.05 p.m. | Industrial Law | Torts, Damages & Civil Liability | Trade & Commerce
Following on debates as to whether or not the employment conditions of Australian workers are adequately protected under the recently concluded Free Trade Agreements and the recent revelations by Fairfax Media and The ABC relating to the working conditions at 7-Eleven convenience stores and similar casual hire employers (see our article Fair Work Inspectors Spot Check 7-Eleven Stores After Reports Of Staff Underpayment) - it is interesting to see that the Victorian Government has progressed with an extensive inquiry into the "Labour Hire Industry and Insecure Work". The Inquiry was announced in September 2015 by the Victorian Minister for Industrial Relations Ms Natalie Hutchins MP and is tasked, in broad terms, to:
". . . investigate the practices of rogue labour hire companies, insecure work, sham contracting and the abuse of visas to avoid workplace laws and undermine minimum employment standards".
Why there are Valid Reasons to Inquire
In the area of "labour hire" a recent SMH Report (1 October 2015) points out the wide extent of the problem saying:
The report goes on to say that a comprehensive study in conjunction with Monash University has:
". . . revealed 80 percent of foreign language advertisements offering wages below legal rates. Many of them are openly advertised as 'black jobs'".
With respect to "work security" and the growing trend toward the "casualisation" of employment it will be timely to have some practical research into how such trends impact upon the financial security, housing affordability and overall standard of living of workers employed under such arrangements.
The Chair of the Inquiry
The Inquiry is to be chaired by Professor Anthony Forsyth of the RMIT University Graduate School of Business and Law. He teaches labour law and legal research at RMIT University and as a consultant with Corrs Chambers Westgarth's Workplace Relations Group, he also advises corporate and public sector clients on employment and workplace relations issues. His recent work includes:
- a study of the Fair Work Commission's role in enterprise bargaining;
- an overview of workplace privacy law for the Japan Institute for Labour Policy; and
- contribution to a comparative study of workplace dispute resolution in ten countries for the International Labour Organization.
Writing for The Conversation about his Inquiry Professor Forsyth says of the Inquiry:
"This move has turned out to be quite prescient, given the greatly increased focus on the emergence of a 'black labour market' in Australia over the last 12 months."
The Inquiry's Terms of Reference
The Inquiry is to investigate and report on two main areas, namely:
(1) The extent, nature and consequence of labour hire employment in Victoria.
In this respect some of the key areas to be investigated are the: employment status of workers engaged by labour hire companies;
- the use of labour hire in particular industries and/or regions;
- the use and impact of labour hire arrangements in the supply chains of particular sectors, and the roles and responsibilities of various entities in those supply chains;
- the application of industrial relations laws and instruments;
- the legal rights and obligations of labour hire employees, companies and host organisations/entities and any ambiguity that exists between them;
- allegations that labour hire and sham contracting arrangements are being used to avoid workplace laws, and other statutory obligations, and the current effectiveness of the enforcement of industrial relations, occupational health and safety and workers compensation laws;
- the need for labour hire companies and host organisations/entities to provide workers with suitable accommodation; and
- the extent and impact on long-term workforce needs of the practice of replacing permanent employees, apprentices and trainees with labour hire workers.
(2) The extent, nature and consequence of other forms of insecure work in Victoria.
In this respect some of the key areas to be investigated are:
- the use of working visas, particularly in insecure, low paid, unskilled or semi-skilled jobs and trades;
- exploitation of working visa holders and other vulnerable classes of workers including female workers;
- sham contracting and the use of ‘phoenix’ corporate structures;
- the impact of insecure work on workers, their families and relationships, and on the local community, including financial and housing stress;
- the social and economic impacts for Victoria; and
- the ways in which unscrupulous employment practices create an uneven playing field for competing businesses.
The Extent of the Problems
Labour Hire Employment has been growing in Australia since approximately 2005 and as Professor Forsyth says:
"The labour hire sector is of particular interest as this is a major industry in Victoria and nationally, with around 6000 operators employing up to half a million workers. It also generates almost $20 billion a year in revenue."
It is known there are many reputable labour hire companies, but as is clear from the SMH Report and the ABC Four Corners investigations there are also some that mistreat workers. These companies are often, when complained about or litigated against for breaches of the Fair Work laws, able to be liquidated and then restart business again elsewhere.
The Inquiry Timetable
The Inquiry is to report to the Minister by 31 July 2016 and public hearings are to be conducted at various locations in Victoria in the period 23 November 2015 to 1 March 2016 ( see Department Website for Details).
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