AMMA head of policy Scott Barklamb writes about the latest development in the long-running campaign to further regulate the labour hire industry.

Scott Barklamb

Scott Barklamb

LABOUR hire has been subject to a number of federal and state inquiries in recent years. Unions have long sought to combat the use of labour hiring, even for highly remunerated and highly compliant work. The case for regulation has been aided by purported labour arrangements being linked to clear cases of underpayment, exploitation of lower paid (and often international) employees, and outright criminality.

Debate on labour hire too often treats all labour hiring as interchangeable and ignores the clear differences between the use of labour hiring in high remuneration, high compliance industries such as those AMMA represents, and essentially scam arrangements in some lower paying pockets of the economy.

The latest development in the long-running campaign to further regulate the labour hire industry is the release last week of the final report of Victoria’s Inquiry into ‘the labour hire industry and insecure work’.

The report makes 35 recommendations with the primary recommendation being the imposition of compulsory licensing of labour hire in Victoria, but restricting this to three specific industry sectors where the inquiry found particular problems (meat, horticulture and cleaning). The inquiry also recommended that host employers in such industries be obliged to only use licensed providers under threat of civil and potentially criminal penalties (see recommendations 13 – 25).

Other recommendations relevant to AMMA members include:

  • That labour hire employees be provided with the same pay and conditions as comparable employees of the host company (recommendation 2). This includes support for ‘parity clauses’ in host companies’ enterprise agreements that require labour hire employees to receive the pay and conditions of the workplaces in which they work.
    • In direct contrast with this recommendation, AMMA has strongly supported the Productivity Commission’s recommendation 25.2 that would see such parity clauses become unlawful terms that cannot be included in enterprise agreements.
  • New rules for standards of accommodation, the implementation of which may in some circumstances impact on resource organisations that provide accommodation (recommendations 9 and 10). AMMA intends to seek a briefing from Industrial Relations Victoria on the intended effect of these recommendations and provide information to interested members.
  • Further regulation of ‘sham contracting’ and a ‘fair engagement checklist for the engagement of independent contractors’ (recommendation 28, 29).

AMMA has consistently opposed compulsory licensing for labour hire in the resource sector, which is entirely different to the low paying, non-compliant examples which have given rise to various inquiries in recent years.

A further recommendation for compulsory licensing is unwelcome, however the approach recommended in Victoria differs (and differs positively) from that recommended to the governments of Queensland and South Australia following recent inquiries in those states.

The Victorian report recommends that licensing be restricted to specific sectors experiencing particular problems linked to labour hiring. This contrasts with the recommendations in Queensland and South Australia for universal licensing of the provision and use of labour hire across all industries.

As yet, neither the Victorian, Queensland nor South Australian governments have formally responded following the inquiries they instigated. However:

  • Indications at the release of the Victorian report were that the government intends to move quickly to substantially implement the recommendations it has received.
  • The release of the Victorian report completes the series of recent inquiries and state ministers of industrial relations have the recommendations of the three inquiries to consider as they craft their responses and plans for new legislation/ regulation.

AMMA understands there is an ongoing dialogue at the ministerial and departmental level between Labor state governments and there has been consideration of some coordination and consistency between approaches.

At the national level, as previously advised, the Senate Education and Employment References Committee is inquiring into ‘Corporate Avoidance of the Fair Work Act’ which includes terms of reference directed to labour hire arrangements. This comes on top of previous federal parliamentary inquiries that have addressed labour hire, as did policies the various parties took to the 2016 election.

AMMA has members that operate labour hire businesses, members that act as hosts and make use of labour hire services, and members that provide a wide range of contract services that we need to ensure do not unwittingly and inappropriately become caught up in any new regulation. As set out above, secondary considerations raised in these inquiries, such as employee accommodation, may also impact on AMMA members.

AMMA will continue to closely monitor developments in relation to the use of labour hiring at both the national and state level, and continue to argue for cost effective, practical access to this important option for doing business in the resource industry. In particular, AMMA will continue to seek to influence and closely monitor the response of the Victorian, Queensland and South Australian governments to the recommendations they have received.

AMMA members with queries on the various inquiries into labour hire, proposals for additional regulation, or the current state of play should contact Scott Barklamb via [email protected] or (03) 9614 4777.