Victorian Inquiry Into Thelabourhireindustryand Insecureworkintroduction

Victorian Inquiry Into TheLabourHireIndustryAnd InsecureWorkIntroduction.

Submission byShop,Distributive and AlliedEmployees’Association

Introduction

The Shop,DistributiveandAlliedEmployees’Association (SDA) is pleasedto make a submissiontothisimportantInquiry. TheSDAcommendstheAndrewsGovernment forinitiating thistimelyInquiry.TheSDAhopesthatitssubmission andrecommendationstotheinquiry areacceptedandacted upon.

TheSDAis theunion thatrepresentsemployees intheretail,fastfood,warehousing,pharmacyandmodelling industries.TheSDAhascoverageofthosewhowork in theseindustriesincluding anylabourhirecompaniesor agencies thatprovidelabourin theseareas.

It is timelythatthisInquiryis conductedintotheprevalenceof labourhire in Victoria andalsotheshifttowards insecurework, in particulartheexploitationbyunscrupulousemployersof thoseonworkingvisas.Thegrowthin labourhireengagement is afeatureofour growingand diversifiedeconomy andworkforce.Theexploitationof those onworking visas is afeatureof theillegalmethodssome employerstaketoadvantagethemselves.

Thegrowth in labourhireengagementhasbenefitsand drawbacks. Amoreflexibleworkforcecan beutilisedbya third party employerwithouthaving tohavetheresponsibilityofactuallyemployinganyone.This canbe veryefficient and easyto administer. Thefeepaid tothelabourhirecompanyoragencytakescareofthepayofthe labourhireworkerswhowork inyourworkplace.You arenot theemployerbut itis yourworkplace.

Thebenefitforlabourhireworkers istheflexibilityto workwhentheywant.Theycan refuse ashift,they arenotpermanentemployees. If theworkis ina unionisedworkplace, thelabourhireworkerswill usuallyhavethe benefitsofa unionenterpriseagreement andcould beunion members.Theyare usuallytreated asthecasualworkforceat thatsite.

Thedrawbackforlabourhireworkers is having nopermanencyor job security.You relyuponthenextphone callortexttobeoffered shifts. Ifyourefuseshiftsyoumaynotgetany more.If you arenot inawellrunorregulatedworksiteyourconditionsmaybetheawardminimum or worse.

Thereisnoproperregulation oflabourhireworkorthecompaniesoragenciesthatoperate inVictoria.This is not acriticism of labourhireorof alllabourhirecompaniesor agencies. Howeverthegrowth in labourhireengagementand thenumberofcompaniesand agenciesoperatingin Victoriameansthat it is timeforproperregulationofthisformof employment.

Insecureworkhasalso of recenttimesbecome a causeformediaattention.Thelong listof casesofworkingorstudentvisa holdersbeingseverely exploitedbyunscrupulousemployers isbecomingembarrassing.Thesecasescannotgo on;alllevelsof governmentmustactimmediately inacoordinatedwayto stampout theseillegal and immoralpractices.Australiahasbeen shamedbythesecases.

Whowould haveimaginedthat Australiawould beshowcasedto theworldas acountry thatexploitsforeignworkers?Wehaveseen numerous mediareports offoreign workersexploitedinothercountries.Butwhocould imaginethat acountrylikeAustralia, withour decentwages andworkingconditions,would face thesamemediaattention andberightlycondemnedforallowingsuchexploitationand seeming tobedoing nothing to stopit.

TheworkoftheInquiryis thereforetimely, andthe SDAlooksforwardtoitsfindings andrecommendations.MoreimportantlywehopethattheinquirywilleducateVictoriansabout theissues it raisesand thatpropersolutionswill befoundtoaddress anyissues.

Thetwo mainareasofthe inquiry, theuse oflabourhireand theincidenceof insecurework,areissuesof whichthe SDAhasknowledge.Inour submission there isa roleforlabourhire,thereis noroleforinsecurework.

Termsof Reference

Inrelationto thetermsof reference,theSDAwishesto makesubmissionsand recommendationsinrelationto thefollowingsections:

a)Theextent,natureand consequenceof labourhireemploymentin Victoria,including but notlimitedto:

i.theemploymentstatusofworkersengagedbylabourhirecompanies:

Thepersonswho areengagedbylabourhirecompaniesultimatelyworkfora third partyemployer. Thethird party employerdirectsthelabourhireperson to workbut isnottheiremployer.It isnotalwaysclear thatthosepersonsengagedbylabourhirecompaniesarein factemployees.

Employeesof thelabour hirecompanythen havenopermanencyor regularworkunlessthe workcomesfroma third party employer.Thepayforthelabourhireemployeecomesfromthethird partyemployer.

Somelabourhireemployeesenjoylong periodsof regular workwitha third partyemployer. Theyreceive payand conditionswhilstworking at thethird partyemployer.Butthey arenotemployees ofthe thirdparty employerand donotenjoythe benefitsofbeing an employeeofthethirdpartyemployer.

Consideration should begiventodefinethatthoseengagedbylabourhirecompaniesareemployeesofthe labourhirecompanies andnotforexample,sub-contractors.Thoseengagedbylabourhirecompanies shouldbeemployed andnotbeengagedona contractforservice.

iv.the application ofindustrialrelationslaws andinstruments:

Theissuehereistheability ofthe labourhireemployeetobelegallypaid lessthantherateof payunderanyon-siteenterpriseagreement(EBA)thatcoversemployeesof thethirdpartyemployer. Asthe labourhireemployeemaynotbetechnicallycoveredbythe EBA,

theycan bepaidthe lowerratesof theapplicableindustryoroccupationalaward.Howeverthey perform the samework as theemployeesunderthe EBA.

Toavoid confusion andto properlyremunerate theworkdonebythelabourhireemployee,theyshould bepaidnolessthan theon-siteratesand conditions in anyEBA.

Alsolabourhireworkershavenoaccessto theEBAgrievanceprocedureand havenorealmechanism to resolveanyworkplacedispute thattheyhavewith thethird party employer.Thisneedsto beaddressed. Bothofthesechanges willrequirechangeto theFairWorkAct.

v.the legalrightsandobligations of labourhireemployees,companies andhostorganisations/entitiesandanyambiguitythatexistsbetween them:

Anychangeherewould beat a Federal level.In Victoriaforexample alabourhireemployeewho had been regularlyworking with a thirdpartyemployerandwas thennotofferedworkcould notcomplain thattheyhad beenunfairlydismissedor adverselyaffectedbythethird party employer.

As the labourhireworkersare notemployeesof thethirdpartyemployertheycannotbedismissed bythe thirdpartyemployer.If there isanyactionitwould beagainstthelabourhirecompany.Thelabourhirecompanyhasnotdismissed them eitherso wheredoessomeonegotocomplain ifthey losea good labourhireplacement?

A mechanismneedsto beestablishedtoallowforlabourhireemployeestobeable tocomplain abouttheirtreatmentbyathird partyemployer.If notby a changeto the FairWorkActthen acomplaintmechanism that relatesto thelicensing and regulation oflabourhirecompaniesor agenciesthatoperate in Victoria.

Further the grievanceprocedure oftheapplicableaward ortheon-site EBAshouldallowfordisputesbylabourhireworkers with thethird partyemployertobeaddressed.

vi.Allegationsthat labourhireandshamcontracting arrangementsarebeing usedtoavoidworkplacelaws,andotherstatutoryobligations, andthecurrenteffectivenessoftheenforcementof industrial relations,occupationalhealthand safety andworkerscompensation laws:

Generallythelabourhirecompaniesand agenciesthat the SDAdealwithin warehousesare longestablishedandreputable. Companiesandagenciesmayreplaceone anotherbutgenerallytherearenoshamarrangementsbeing usedtoavoid legalobligationsinwarehouses.Toavoid any potentialshamcontractingarrangementsandtoprovide thatlabourhireworkersareproperlyengagedandremunerated, labourhirecompaniesandagencies thatoperate in Victoriamustberegistered.TheVictorian Governmenthasthepowertoregulatelabourhirecompanies andagenciesandshould thereforepassenabling

legislationto allowfor a registrationregimetobeestablished along with a registrationagencytoadministerthelegislation and theregistration.

Suchregistration shallmandatethatlabour hirecompanies and agencieshave aproperand legal businessstructure. No labourhirecompanyor agencydirector shall beabankrupt or have a criminalconviction.Suchregistration will giveconfidencetothoseworkerswhoregisterwitha labourhire companythatthecompany isbonafideandentitledto operateas a labourhirecompany.

b)Theextent,natureand consequenceofotherformsofinsecurework in Victoria,including butnot limitedto:

ithe useofworking visas,particularly in insecure,lowpaid,unskilled orsemi-skilledjobsand trades:

Theuseofworking visas inAustraliahasbecometoo common.From the SDA’sexperienceinthe retailand fastfood industries,the influxofworkers on studentvisas hasbeensignificant in thelasttenyears. Theseworkersarebeing used in preferenceto locallabourin too manyinstances.There is still a relativelyhigh unemploymentrate,especiallyamongstyoung people andthereforetheneed forso many employees onworking visastoworkin theseindustriescannotbejustified.

This is not a reflectionon thoseemployeesonworking visas, buta sign thatemployershavetakenonmanyworkingvisaemployeesbecausetheseworkersmaynotbeawareoftheirworking rights andcan betakenadvantageof byunscrupulousemployers.Becausethereare so manyemployeesonworkingvisasit isdifficultfor anyGovernment toproperlyregulatetheiremployment,including thattheyareproperlypaid andreceivesuperannuation andareworking in safeworkplaces,amongstotherthings.

ii.exploitationofworking visaholdersand othervulnerableclassesof workersincludingfemaleworkers:

Theregulationof workingvisas is a Federal governmentresponsibility.Therecent wellpublicisedabuses of internationalstudents, holidaymakersandvisitorswhilstworkingonvisashavebeen shocking.Ithasexposedhowunscrupulousemployerscan exploitvulnerable and naiveworkers.

Australia as anationshould becollectivelyashamedat theexploitativetreatment ofworkersonvisas.It is anationaland internationalblighton Australia, acountrythatdescribesitselfasgivingeveryone a fair go,not a rawdeal.

Workingvisasforinternationalstudents,visitors andholidaymakersshould onlybeusedtofill necessaryvacancies,either shortterm or longertermthat cannotbefilledbylocalworkers.Theuse of working visas fortoo manyjobsin Australiahasbecometoowidespread andthereforehaving an impacton localjobs.Ontheotherhand many

industriesrelyon workingvisa employeesto fill seasonaland temporaryvacancies,betheyinareaslikefruitpicking orharvesting orin hospitality jobseitherinwinterorsummer.

Thedangerwith therecentepisodesof exploitationofthoseon workingvisasisthat theworldwidepublicity willfrighten manypotentialworking visa holders,whoare generallyyoung,fromcoming to Australia,notto mention theirparents. Thenegativepublicityaboutworkingvisaswillforcemanyyoung internationalstudentsandvisitorsto thinktwiceaboutcoming toAustralia to study,workor holiday.

Thisscenarioisto beavoided.Howcan Australian workplacesbethought ofasworkplacesthat exploitworkers andnotonesthatreward hardwork.

Considerationmustbegiven byall governmentsto educatethoseonworkingvisas oftheirworkplacerights.Tothisend,theVictorianGovernment should initiate aneducationprogramin suchareas aseducationalinstitutionstoinformanystudentswho have aworkingvisaabouttheirworkplacerights.Theserightsincluderatesof pay,superannuation andhealthand safety.

3.3Questions inrelation tolabourhirework

Inrelationto thequestionsasked bytheInquiry in itsbackground paper in relation tolabourhiretheSDAoffersthefollowingcomments:

Labourhireis usedin thewarehousing industry in Victoria.TheSDAcoversa numberofretail warehouses in Victoria.Theseoperateunderenterprise agreementsregistered withthe Fair WorkCommission.

Thelabourhireworkersthat are engaged in retailwarehousesaregenerallyusedascasuals.Manyretailwarehouses willoutsourcetheir casualworkforcetoa labourhirecompanyor agency.These workerswillworksolelyorpredominantlyattheonesite,sometimesformanyyears.Theywillworkat thedirectionofthe third party employerbuthavenoemploymentrelationship withthe thirdparty employer.

Themainretail warehousesare situated inmetropolitan Melbourne. The mainlabourhireagencies intheseestablishmentsarewellknown andlongstanding entities.The large retailand wholesalewarehouseswantto workwith establishedlabourhirecompanies,for goodreason.

In theretailwarehousesthat the SDAcoverslabourhirecompanyworkersareengaged asemployeesofthe labourhirecompany.Somelabourhireworkersareengagedby multiplelabourhirecompanies,they canwork ina differentindustryeveryday.

Labourhireworkers can receive theenterprise agreementrates attheworksiteor theaward rates.Itis up tothe labourhirecompanywhatit will follow.Theremaybea labourhireemployment contractthat requiresthelabourhireemployeestobepaid theenterpriseagreement,theonsiterates,or theremaybenoarrangement and then theaward applies.

Generallyin largesiteswith an EBA,labourhireworkers arepaid theonsiterates,nottheaward rates. Butnotall EBA ratesmayapply;thelabourhirecompanymaynotpayabovethe generalentryrate intheEBA asthisratewill exceed any rate inthe applicableaward.

Themain differencebetween the direct employeesofthe third partyemployerand labourhireworkerswillbe theaccesstopermanent workandthebenefitof anyhigherratesofpaythan theapplicableaward.Directemployees ofthethird party employer, includingcasuals, have a permanentemployer.

A steadyjobandregular income isthemaindifference. Howeverlabourhireengagementinretailwarehousesisgenerallytoprovidecasuallabour andthereforemanylabourhirecasuals in retailwarehouseswho receive theonsiteratesarebeing paid abovetheaward.

Generallyin largeretailwarehouses,labourhireworkershaveaccessto unionmembershipand theprotection andbenefits thatgo withthat.Ingeneral,labourhireengagementinlarge retailwarehouses,wherethere isa union presence,is notusedtoevadeworkplacelawsandother legalobligations.

If thereare anyissuesthentheunion isavailabletoapproach both thelabourhirecompany andthe thirdpartyemployer. Union presencein workplacesthatengagelabourhirehas a beneficialeffecton theemployment conditionsof thelabourhireworkers.Aunion presence willhelp ensure that properwagesand conditions areadheredtoandthathealth and safetyisnotneglectedforlabourhireworkers.

Therearepositive outcomesfortheuseof labourhireforVictorian workers,businessesand thebroadercommunity.Wherelabourhireisused for thepurposeof casualor shorttermworkandtheworkers are properlyremuneratedand receivestandard workplaceconditionsofemployment,then theworkersbenefit,businessesthatusethembenefit andingeneral theworkdoneisvaluableto thecommunity.

Thereareproblemswhenlong termlabourhireworkerslookforpermanentwork withthethird party employer.Employershavealsobecometooreliantonlabourhireemploymentinstead ofdirectemployment.

Direct,permanentemployeesat thethirdpartyemployerworkplacearenotalwaysreplaced.Ifthereare vacancieslongtermlabourhireworkerswould likethechancetobecomepermanent.Thisisnotalwayspossible; manypeoplearechasing fewerand fewerpermanentvacancieswiththird party employers.

Ultimatelylabourhireengagementshould only beused tosupplementpermanentemployment.As acommunity,theneedfor long termemploymentis crucialforworkerstosustain theirlives,theirfamilies and their financialcommitments.

A long termlabourhireposition willneverreplace along term permanent positionforproviding financial securityand job satisfaction.

Thefollowingarecaseexamplesof issueswith labourhireemployment inlargeretailwarehouses in Victoria:

Whatworkingconditionsdo labour hireworkerstypicallyhave? Whatdifferences arethere,ifany,between theconditionsofdirectemployeesof a hostorganisationandlabour hireworkers?

Typicallylabourhireworkersworking within theretailwarehouseswerepresenthavetheirworkingconditionscovered bytheStorageServicesand WholesaleAward2010.In mostcases inthewarehouses theSDArepresentsthere isacertifiedenterprise agreementwhichcoverstheworking conditionsof thedirectemployees oftheorganisation.Labourhireworkersarenotentitledtothe termsandconditionsoftheenterpriseagreement.Theenterpriseagreementswhichwe negotiatewiththe retail warehouseshave anumberofconditionswhich aregreater thanwhat isofferedunder the StorageServices andWholesaleAward2010including therateof pay.Labourhireworkersdonothaveaccessto theseimprovedprovisions intheenterpriseagreements. Thereare a numberof clear differencesbetween theworking conditionsof labourhireworkers anddirect employeeswhichinclude;voluntaryworkon publicholidaysand accesstotheenterprise agreementgrievanceprocedure.Labourhireemployees canoften bedisadvantaged duetothefacttheyarenotcovered bytheconditionsof theenterprise agreement. With thatbeing said,itiscommonpracticeforlabourhireworkerstobepaidatthesame rateofpayasdirectemployeesofthe warehouse as per theenterprise agreement.This isthecase ina numberoflarge retailwarehouseswe represent.

There isonlyone exampleof a largewarehousetheSDArepresentswhich doesn’tpaytheenterpriseagreementratetolabourhireworkers.In this case labourhireworkerswhocompleteworkatthe warehousearepaidas per theStorageServicesand Wholesale Award2010.Thismeansthat labourhireworkers arebeing paidless thanthe directemployeeswho arebeing paid aspertheenterpriseagreementwhich has a higherrateof pay. Inthiswarehousetherearelabourhireworkerscompletingthesametasksand roles asdirectemployeesbutarebeing paid less thendirectemployees.

Inall warehouseswerepresentone commonconcernis that traditionallylabourhireworkersareonly paidtheminimumrateof pay in theenterpriseagreement.Mostenterpriseagreementswhichhave been negotiated bytheSDAhavea numberofdifferentlevelsandclassificationswhich providehigherratesofpayforemployees. Therehavebeenexamplesof labourhireworkersbeing long term workers attheonewarehouseand notbeing paid anymorethan theminimumin theagreement. This is a clear disadvantageforlabourhireworkerscompared to directemployeeswho havetheabilityto moveup throughthe classifications andgetthehigherratesof pay.

One ofthemain issuesforlabourhireworkersin oneofourmajorretailwarehousesis thatthey arenotcoveredbythegrievanceprocedure intheenterprise agreement.Thismeans

they arelimitedin what action they cantakewhentheyhave a dispute in theworkplace. Theenterprise agreementalso hasa clausewhich restrictshowthecompanyhandlesunderperforming employees.Thisprogrammeaimstoprovidea twowayconversationbetweenemployeeand employerwhendealing with potentialperformanceissues.Theprogrammehas amulti step processwhichthe companymustfollowwhendealingwithunderperforming employees. Thisprogrammegivestheemployeea significantopportunitytoimproveperformanceand putstheemployee inthe bestpositionto succeedin therole inthe longterm.Labourhireworkersdonothaveaccess to thisprogrammeand areas suchdisadvantaged comparedtodirectemployeesofthe company. Inourexperienceif a Labourhireworkeris notperformingtotherequiredtargettheyareinformedtheyneed toimprove. Ifthecompanydoesn’tseeanyimprovement theyhaveon manyoccasionsinformed thelabourhirecompanythatthespecificworkeris notrequired anymore.Thecompanydoesnothave therestrictionsof theprogrammetofollowand donothavetoworkwiththelabourhireworkerto tryandhelp improveperformance. Ifperformance doesn’tapprovetheycan simplyletthelabourhireemployee go.This isoneofthe

majordisadvantagesfacing labourhireworkers in thisspecificwarehouse.

Is there evidence oflabourhirebeing usedtoevade workplacelawsand otherlegalobligations?

Thereisevidenceof labourhireworkersnotbeingoffered workby their hostemployersuddenly andnotbeingoffered anyexplanation.Labourhireworkersarefar morerestricted in actiontheycan take againsta hostemployer if they areessentiallydismissedfromtheiremployment. Hostemployersarenotbound bythe sameregulationswhen itcomesto unfairdismissalsunder the FairWork Act.TheLabourhireagency istheemployerof theworkerand thehostemployer can decidethat aworkerisnolongerrequired. Thisenables hostemployersto havelessregard forthelegislation andtheycandecidetoterminatetheemploymentrelationship withalabourhireworkerwithlittletonorecourseavailabletotheLabourHireworkersagainstthehostemployer. Thelabourhireworkersareusuallythenjustsenttoanotherworkplacewhichmayhave lessfavourablepayandentitlements.

Thereisalso theissueofmorelabourhireworkersbeing employedin certain warehousesthen directemployees. Thisenablestheemployerto have amoreflexibleworkforcewheretheycan pick andchoosewhichemployeestheywanttouseand arenotbound bytheconditionsofemploymentwithintheenterpriseagreement.

In whatways dohoststypically uselabourhire workers?Arethey usedto supplementorto replace ongoingworkforcesordirectemployees?

It appears that inmostcases thatthelabourhireworkersarebeing usedtosupplementdirectemployees.Howeverthereareexamplesofwarehousesusing labourhireworkersasthe primarysourceof employment.At timeswithin a specific warehousetherehavebeen agreaternumberof labourhireworkersworkingcompared to directemployedemployees.Thisappearstobesomewhat ofan isolatedexperience. It isourexperiencethatlabourhireworkersaregenerallyusedto supplement theworkforce.

Inoneoftheenterpriseagreementswhich coversone ofthewarehouseswerepresentthere areclauses intheagreementwhichguaranteetheamountof directemployedpermanentemployees in thewarehouse.Thereis alsoaclausewhichstatesthat theemployer willoffer a number ofpermanent jobsto long term labourhireworkersperyearduring thelifeof theagreement.

To whatextentislabourhire usedin Victoria?Inwhich industriesand regionsis itmostprevalent?

It isour experiencethatlabourhireemployeesareused largelythroughoutwarehousing anddistribution centres. InalloftheWarehousesandDistribution CentrestheSDAcoversthereare a numberof labourhireworkersemployedwithintheworkplace.Different distributioncentresuselabourhireworkersdifferently,withsomeusing them to supplementtheirworkforceof directemployees andsomeusingmorelabourhireworkersthendirectemployees.

4.5Questions in relation toinsecurework

Inrelationto thequestionsasked bytheInquiry in itsbackground paper in relation toinsecureworktheSDAoffersthefollowingcomments:

Whatexperience orevidence canyou provide ofexploitation ofvulnerableworkers inVictoria?Thiscould includeworkingvisa holders,youngorolderworkers,workersfrom anon-Englishspeakingbackground,women workers,workerswithlow levelsofformaleducation,workerswith adisabilityorothervulnerable workers.

Whatexperience orevidence canyou provide ofthe use–ormisuse–ofworkingvisasinVictoria?Whichindustriesand regions arethey usedin?Whatkindsofjobsdoworkingvisa holdersobtain?

7-Eleven

TheSDAhasbeensupportingmany 7-Elevenemployees,byhelping themtorecovertheir legalentitlements, whichhavebeen subjecttoasystematicpatternof exploitation bymany 7-Elevenfranchisees.

Theseemployees,mostof whoareon studentvisas,need tobeaware thatjustbecause some ofthemmaynotbeAustralian citizens, theystill haveindustrialrightsunderAustralian law.

7-Elevenworkershaverights:

•Tobepaid forthehoursworked;

•Penaltyratesforlatenightand weekend work;

•Sickpayandannualleaveifpermanent employees;and

•Theemployer cannotdockpayif thetill isshortor if an employee isheld up.

On 24September2015,theSDAappeared asa witnessbeforetheAustralian SenateStandingCommitteeon Education and EmploymentInquiryinto‘Theimpactof Australia’stemporaryworkvisa programsontheAustralian labourmarket andonthetemporaryworkvisaholders’. Attachedisa copyof theSDA’ssubmission totheInquiryforconsideration bythisinquiry.

Thekey elementin oursubmission is theacknowledgementofunderpayments,be itwith wagesornon-observanceofconditions,which should beseen and taken asexploitation drivenprimarilybyaseverepowerimbalanceinthe relationship between avisaworkerandtheemployer.

TheSDAis seeking that the Federal governmentput inplaceaspecial amnesty visawhich a personbeing employedunder a student visa,amigrantworkervisa, a holiday-makervisa or a457visacouldactivate ifaffectedwhennotreceiving theirlegalworkplaceentitlements.Ourexperiencetellsusthat it istheemployeeswhoarethevictimsandthe systematthemoment putstheonuson themtoprovethattheyshould notsuffer theconsequencesof immigration law.TheSDAwould liketoseethe onusreversed.

Theotherkeyitemsin oursubmissiongoto theFairWorkOmbudsman'sresources. TheSDAsubmitsthat itis notrealistic to considerthat theFairWorkOmbudsman isabletoappropriatelyenforce thelabourlawsinthiscountry,fora rangeof reasonsincluded inoursubmission. Webelieve thatadditionalresourcesshould begiven.

Theotherkeyelementofoursubmission is that theSDA is seekingthe separation of theinspectoratepowersof the Fair WorkOmbudsman,which should be focusedonupholding Laborstandards. Wewantthatseparatedclearlyfromanydualobligationsthattheyhavewith theDepartment ofImmigration andBorderProtection.Student workersfeel asthough theycannotputtheir hand up andgoto theFair WorkOmbudsman,becausetheycould beputting theirvisaentitlements atrisk.

TheworkplaceissuestheSDAhaveseen include,quiteoften,7-Elevenemployeesworking doublethe hoursthatareon theirpayslip.Effectively,theseemployeesaregetting halfthe pay.That isquitecommon.Theothercommon approach isthat employeesworktherighthours,but,to makethe franchisesgetthewagesdown,employeesarerequired togivebacksome wagesas cash andthis cashisoftenused bythefranchiseetopayotheremployeeswhodonotappear onthebooksanywhere.

Further, the hourlyrateofpay–whichis aflatrate –appliesfornightwork,weekend workandpublicholidays.TheSDAhas also comeacrossissuesaround superannuation. In somecircumstances,it isjustnotpaid.7-Elevenemployeesare told whentheystart,'this is just anaccount.' They mighthavetofilloutsomepaperworkwhichcan beshownto othersuponinspection,butnothing goes in.Otheremployeeshavetold usthatsome superhasgonein,but,obviously,if you aregetting halfthepay,you arenotgetting yourfullsuperentitlement.

Theotherunfortunateandrecurring themesarethat7-Elevenemployeeshavetocompensate thefranchiseeforlossesarising fromshoplifting and, if their cash registeris short,there isanothercommon patternthat they haveto makeup thedifference intheregisterattheendoftheir shift.

Threeformer7-Elevenemployees,fromtwostates,alsoappearedwith the SDAbeforetheSenateInquiry. It doesnotmatterwhich stateyougoto,thestories areverysimilar.With theframeworkofthe exploitation,thereare patterns.

Therearesome thingsthathave comeout in thedetail that wehavethat gotothecultureoftheworkplace.There isa realpowerimbalance.These7-Elevenemployees areyoungand thereforedonot havemuchlifeexperience.They arein a foreign country.They donothavethenormalsupportnetworksthat alotofyoung Australianswould beabletogoto— familyorconnectionssomewhereelse inthecommunity—toaskadvice.Figuresof authority,whether an immigrationofficeroraunion official,oncethey knowthat theyhavebeen ina situation of a possiblebreachoftheirvisa,are notpeoplethey will reach outto.They areextremelyvulnerable,andtheyknowandaretoldthat theyhad betternotsaytoo much,becausetheyhavebreachedtheirvisa.Thispowerimbalanceis quitesevere. Ithasresulted inaveilof silencesittingoverthiscompany,for a numberofyears.

What weareseeing nowisthe lid being lifted onthat—and notbeforetime.

TheSDAbelieveswhistleblowerprotectionsneed tobeextendedto covertemporaryvisa workers.The7-Elevenworkersarepredominantly on studentvisas.Whatwesawas asolution to the problemis thechangingof theonusand tryingto movetheworkerfrombeing thevictimand our lawstargeting thevictim tothelawsprotecting theworker.Thisneedstobesomething that cutsacross allvisas.Whilsttheyarealldifferent,therehavebeenexamples in recenttimesofpeoplebeingcoercedintobreaches,beit ofthe457visaorthe holidayworkervisa.Tous,with allofthosevisas,we needtohave anamnesty visainplacesothat it doesnotmatterwhatvisayou areworking under. If youareanexploitedworker— thatis,youaregettingwagesbelowAustralian minimums or theminimumconditionsarenotbeingobserved—wewantasystemwherebypeoplecan comeforward inconfidenceof notsuffering negativeconsequencesand theywould notsuffer therepercussionsof deportation.Thebiggestfearof workersonvisas reporting anyexploitation isthefear ofdeportation

TheSDAbelievesthatthe solutionforthisproblem cutsacross allofthosevisas,and we thinkit isimportantfortheindividualswho arebeing exploited,but it is alsoimportantforthe standardofAustralian wages becausethis is creating a blackmarketout there inwages.

Whatexperience orevidence canyou provide ofshamcontracting?

PizzaHut

RecentmediareportsindicatethatPizzaHutfranchiseeshavebeenusing 'sham'contractstounderpay its deliverydrivers.

TheSDAisoutragedtohearPizzaHutfranchiseesareusing independent contractstopaydeliverydriversaslittle as$6perdelivery.

If PizzaHutemployeesaregetting paid $12perhouras a resultofdelivering pizzas,it'ssimplynotlegal. TheSDA'sresponse isthatwe completelyrejectthese paymentsas propercompensation forthe workperformed.

Thesearenotlegal rates. Thedrivershavetobepaid theproperlegal rate.TheSDAhasapproachedPizzaHuttohaveitlookintothesereportsof underpayment.

TheSDAhas an agreementin placethatdoesnotallowforcontractors.Wearein themidstofnegotiating anewagreement withPizzaHutwherewearelooking foran increasein rates.

Hopefullyaswith7-Eleven,mediacoverageof thisnewcase willpersuadePizzaHutfranchiseestolift their gameandproperlypayitsdeliverydrivers.

Conclusion

TheworkofthisInquiry inhighlighting theneed forgreaterprotectionof labourhire works andthoseonworking visas isto beapplauded.

Theproperregulationof labourhirecompanies and agencieswill givegreatersecuritytolabourhireworkersandthe industriesthat utilisethem. If labourhirecompaniesoragenciesareregisteredbyagovernment authoritythere will be a properoversightoftheir activities. Thiswillleadto workersbeing properlytreated andless chance offlybynightoperatorshaving an unfairadvantagebyignoring their legalresponsibilities.

Thesystemofworkingvisashasbeenshowntohavebeen exploited byunscrupulousemployers.Inrecenttimessimilarexploitationof457visa workerswasexposed andultimatelyaddressed bylegislation.

Thewellknownexamples of exploitationofstudent and workingvisasmustnowalsobeaddressedand rectified.Theeffortsofthisinquiryto exposetheseexampleswillhopefullyconvince theFederalGovernmenttograntamnestiesto thosewhocomeforward tocomplain oftheirtreatment.

The SDAnotesthat on November23rdthe FederalGovernmenthasannouncedthat in responsetothe shockingrevelationsaboutthetreatmentofthoseon workingvisasthat it’s newly establishedMinisterialWorking Groupon Protecting VulnerableVisaHolders willconsidera newlicensingregimeforlabourhirecompanies. This is animportantstepforwardand coupledwitha generalamnestyforthosewhocomeforwardwithcasesof exploitationwill help addresstheissue.ThisInquiry can lookwithconfidence in followingtheFederalGovernment’sleadand can considerfavourablytheneed forlicensing or registrationof labourhirecompanies and agencies thatoperatein Victoria.

Further the Federal Governmenthasannounced thatit is requiring applicantsfora second WorkingHolidayvisatoprovidethe Federal DepartmentofImmigration andBorderProtectionwith payslipscovering theirinitialthreemonthperiod ofworkto ensure thattheyhavebeenproperlypaid.This isa good firststep butwillonlyaddressan underpayment aftertheevent. Thereshould beregularchecks bytheDepartmentof allthose onworkingvisas as theGovernment iswell awarethatthere isan ongoing problem.(SeeattachedanswerbytheHon PeterDutton,MinisterforImmigration andBorderProtection)

TheSDAlooksforwardtothepositivechangesthatwill beimplemented bythisimportantInquiry.

Recommendations:

Inrelationto theInquiryand its findings,and in lightofthesesubmissions, the SDAproposethefollowingrecommendations forthe StateGovernmenttoimplement:

Recommendation1:Thatall labourhirecompaniesoragenciesoperating in Victoria areregisteredand regulated byeithertheState Governmentand/orthe FederalGovernment.

Recommendation2:Thata governmentbodybeestablished to registerand regulate all labourhirecompaniesor agencies in Victoria.

Recommendation3:Thata registrationsystem foralllabourhirecompaniesoragenciesoperatingin Victoriabeestablishedbythe registrationbody.

Recommendation4: Thata fitand properperson testbeestablishedfor anyperson whoisadirectorofa registeredlabourhirecompany.

Recommendation5:Thatanylabourhirecompanyoragencyshallhave registration fornomorethan3years.Each3 yearsa labourhirecompanyoragencyshallreapply for registration.Newregistration willnotbegranted if thelabourhirecompany oragencyhascommitted significantbreachesof itsregistration.

Recommendation6:Thattoberegistered,labourhirecompaniesand agenciesmustcommittoanenforceablecodeofconduct.Thecode willincludethecomplianceof all relevantand legalworkplaceconditionsof employment, including healthandsafetylegislation.

Recommendation7: Thatnopersonbeableto workfor athird party orhostemployerunlessemployedbyaregistered labourhirecompanyor agency.

Recommendation8:Thatanylabourhirecompanyoragencythat isnotregistered to operateinVictoriashall becloseddownbytheregulatoryauthority.

Recommendation9:ThatanyLabourhirecompanyoragencythatoperates in Victoriashallhavethreemonthsfromthe date thatthe registrationauthority is establishedtoberegistered.

Recommendation10:Thatlabourhireworkershave accesstoa legallybinding grievanceprocedurefor anyworkplaceissues atthehostemployer’sworkplace.

Recommendation11:Thatall franchising agreementsbetween a franchisor andafranchisee orfranchisees in Victoria containa legalcommitmentthatmakesthefranchisorliableforanyunderpaymentof wagesand breacheson industrial awards , agreementsor industrial lawsby thefranchisee or franchisees.

Recommendation12:That accurateemployment recordsof anytransferring employeesofanyfranchisebusinesssoldtoanewownerbeprovidedto thenewowner.

Recommendation13:That an extensiveeducation programbeundertakenbytheState Governmentin tertiaryinstitutions,TAFESand education colleges toeducatepotentialemployeesoflabourhirecompanies and agencies andthosewithstudentvisasof theirlegalworking entitlements.