Labour Hire Abuses Rife, Queensland Union Says 1

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Wednesday, June 15th, 2016
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Labour hire arrangements throughout Queensland are driving down wages, jeopardising safety and locking workers into insecure forms of employment, according to the state’s biggest construction sector union.

In a recent submission to an inquiry into labour hire practices throughout the state, the Queensland branch of the Construction, Forestry, Mining and Energy Union said the collective experience of many of the union’s members and a number of research studies had shown that:

  • labour hire and casual workers were being used in order to avoid paying employee entitlements
  • the use of labour hire workers undermines the pay and working conditions of direct hire working people
  • occupational health and safety outcomes are considerably worse for people who work for a labour hire agency
  • instead of lifting productivity, the use of labour hire workers undermines long-term skill development

Current conditions experienced by many who work under labour hire arrangements are inadequate whilst a number of labour hire companies are exploiting temporary foreign labour and undertaking sham independent contract arrangements, the union said.

It also argued that notions of labour hire companies providing ‘flexibility’ and opportunities for workers are misleading as many employed under labour hire arrangements would prefer to be directly hired whilst insecure arrangements rarely lead to opportunities for secure, permanent work.

“Appalling stories of exploitation from people working under labour hire agencies in Queensland show that the negative consequences of labour hire and insecure work are real, disturbing and intolerably common,” the union said in its submission.

“Submissions from people who are faced with precarious work to the CFMEU, including through labour hire agencies, have consistently shown that they do not believe they are paid fairly, their workplaces are not always safe and that they cannot discuss pay or safety without risking their jobs.”

The CFMEU is not alone in its concern. The Building Services Contractors Association of Australia says it is aware of multiple instances where legitimate businesses in areas such as cleaning, security and facilities management have been undercut as unscrupulous operators used labour hire agencies to provide workers at lower costs compared with award employees.

In one case, a BSCAA member was approached by a labour hire organisation who offered to supply workers at $25 per hour irrespective of when the work in question was set to be performed.

This, the BSCAA says, was despite the fact that based on the current minimum wage, the minimum hourly cost of a part-time employee to an employer working day work – let alone including any allowance for penalty rates or business running costs – was $28.50.

When queried about this, the representative of the labour hire organisation indicated that the workers – who were nearly all South Korean nationals on foreign worker visas – would be paid only $20 per hour, and would be required to work for 10 hours but in fact would be paid for only eight.

Throughout a number of states in Australia, concern has been growing about increasing reports of worker exploitation through labour hire arrangements, and inquiries into practices within the sector are being held in both Queensland and Victoria.

According to RMIT labour market policy researcher Dr Elsa Underhill, for example, a number of studies have demonstrated that compared with their permanent employee counterparts, labour hire workers are paid lower wages, afforded fewer opportunities for training, promotion or advancement, are made to perform higher risk duties, and generally have lower levels of financial and employment security.

In its submission, the CFMEU says examples of what can go wrong can be seen in a number of cases.

In one case, ‘Shane’ – a carpenter-joiner from Logan – approached an employer in Beenleigh about employment at a factory two years ago but was made to work as a ‘contractor’ under a labour hire arrangement despite performing substantive duties under the direct control of the host employer.

Upon the employer going into administration late last year, Shane has not received thousands of dollars’ worth of unpaid wages – his labour hire firm insisting than any wages outstanding were in fact owed not by them but rather by his employer.

Another worker, ‘Raymond’ – who performed infrastructure maintenance work for the Queensland Department of Transport and Main Roads at a depot in the Gold Coast Hinterland – was made redundant after eight years in 2014 and was re-engaged by a labour hire firm to perform the same work.

In order to clean up the industry, the union wants a number of changes.

These include requirements for labour hire companies to be licensed and hold minimum amounts of capital, beefed up enforcement, minimum periods for labour hire assignments, the prohibition of labour hire arrangements for certain classes of foreign workers and a requirement for labour hire firms to pay market rates.

Employer groups, however, stress that labour hire is an important tool for business and argue that existing protections are adequate.

In its submission to the aforementioned inquiry, for example, the Housing Industry Association argued that labour hire arrangements provided an effective and necessary means by which to acquire specialist skills for short-term projects.

As for protections against abuse, the HIA argued that similar responsibilities which applied to employers at law applied to labour hire companies as employers also, and that existing regulation under the Fair Work Act, the Corporations Law and laws relating to health and safety and long service leave as well as various other areas of legislation was already adequate.

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  1. Les Williams

    The incidence of phoenix trading in the labour hire market is extremely high the record indicates. Most skilled workers have permanent employment. The HIA must have a standard answer for everything. If the current rules are working then why do we have problems . How are tenders fair when some pricing work are pricing according to the rules and some not.