Contract employment practices and the operations of labour-hire companies have been in the news a lot lately. The last few months have seen the industrial dispute at the Carlton and United Breweries (CUB) plant in Melbourne in relation to an enterprise agreement introduced by the then new labour-hire contractor for maintenance workers at the plant.
The agreement, reportedly providing for significant cuts in wages and conditions, was rejected by 55 electricians and fitters. The Australian Council of Trade Unions (ACTU) said the workers concerned were sacked and forced to reapply for their jobs with a 65% reduction in wages.
The enterprise agreement introduced by the new contractor at CUB was concluded under the name of a subsidiary enterprise. CUB’s position, according to the ACTU, was that the matter was one between the contractor and the employees concerned, and not its responsibility.
In October, the Fair Work Ombudsman (FWO) delivered the report of its national inquiry into the wages and conditions of people working under 417 Working Holiday visas. It was damning. Widespread underpayment, or non-payment, of wages; visa holders induced to offer payment to employers and third parties to gain second year work rights visas; sexual harassment and workplace health and safety issues, were some of the reported instances of exploitation of 417 visa holders.
The inquiry found that 417 visa holders were particularly vulnerable to exploitation because of their youth and language barriers. Also contributing to the power imbalance between 417 workers and employers, were “employers engaging in sophisticated labour supply chains involving sham contracting”.
Unscrupulous labour hire contractors “disappear like a puff of smoke” when her officers attempt to call on them, FWO Natalie James said.
The common denominator in the CUB and 417 visa holder situations, is the interleaving of additional layers in the employee–employer relationship in the quest for ever greater labour market flexibility. Outsourcing labour supply to contract providers, with its implications for organisational diffusion, responsibility shifting/avoidance, and diminution of effective regulatory capacity, can have adverse consequences for employees.
In an interview in the latest issue of Workplace Review (Spring 2016, Vol 7 No 3), Ms James says there is a “legitimate and often essential” place for businesses outsourcing labour, however, she notes that “complex” labour supply chain arrangements, utilising labour-hire companies, are also used by some operators to “deliberately exploit vulnerable workers”.
Ms James told Workplace Review, her agency “has identified a strong correlation between outsourcing of low-skilled work, the prevalence of vulnerable workers in such labour markets, and worker exploitation, through some operators taking advantage of these lawful options.”
In a wide-ranging interview which included discussion of her personal formative influences and the work of her agency – including its investigations and inquiries (eg into 7-Eleven), Natalie James concluded that tougher penalties, increased funding and data/intelligence for the FWO, and “community engagement”, were all important for building a “culture of compliance” with Federal workplace laws.
If you want to keep up-to-date with the people, practice, cases and trends that are making news in workplace relations, you can get your copy of Workplace Review here.