Construction, Forestry,Miningand Energy Unionminingenergy Division S

Construction, Forestry,Miningand Energy UnionMiningEnergy Division’s

Victorian DistrictBranch

Submissionto the

VictorianInquiry intothe Labour HireIndustry andInsecure Work

January2016

Thisresponse hasbeenpreparedandsubmittedon thebasisthatitis apublicdocument.

Submittedto:ProfessorAnthony Forsyth

RMITUniversity GraduateSchool ofBusinessLawBy email:

Submittedby:GeoffDykeTel:03- 51343311

Fax:03-51347058

Email:

EXECUTIVESUMMARY

LabourHireandcasualworkarecurrentlybeingusedwithintheVictorianMiningandEnergyIndustries in threemainareas:

1.For major maintenanceoutagesof generatingunits andminingequipment.

2.Forcasualandseasonalemployeesinthemobileearthworkplantequipmentindustrywithinthemines.

3.ForcasualemployeesintheSecurityandEmergencyServicesIndustriesinfillingreliefpositions in permanentshiftrosters.

Eachoftheseareaspresentsnegativeimpactsonworkers,theirfamilies,communityandtheIndustry.Additionally,therearesomeparticularlyconcerningpracticesusedbypowercompanies,Labour Hirecompaniesandcontractors;specifically:

• Apreferenceforcasuallabouroverpermanentlabourwherethereispermanentfull-timeworkavailable.
• Under-utilization ofpoolsofcasualemployeesthatareheldcaptive.
• Over-utilizationoftemporarymaintenancelabourinpreferencetopermanentin-houselabour.

WeassertthatLabourHireandcasualemploymentwithinourindustryresultsinpoorerOH&Soutcomesandincreasedrisk,restraintintradeoflabour,lowerwagesandconditions,unreasonablestressonfamilies,lossofcommunityparticipationandcitizenship,scarcityofapprenticeshipsandtraineeships,locallydepressedbusiness conditions andstagnation ofpopulationgrowth.

TheCFMEUMiningandEnergyDivisionVictorianDistrictBranchrecommendsthatgovernmentconsiderseach oftheissues raised,withaview toconstructivelyimprovingoutcomesforinsecureworkers,theirfamiliesand thecommunity.

OVERVIEW

TheConstruction,Forestry,MiningandEnergyUnion-MiningEnergyDivision-VictorianDistrictBranch(CFMEU)welcomesthisopportunitytoprovideasubmissiontothe‘VictorianInquiryintotheLabourHireIndustryandInsecureWork’.Oursubmissionisinadditionto,andsupports both thenational CFMEU and VictorianTrades HallCouncilsubmissions.

THECFMEU

TheCFMEUisaregisteredunionatbothfederalandstatelevelsinAustraliaandhasover120,000members organisedinto threedivisions:

• Construction andGeneralDivision;
• ForestryandForestProducts Division; and
• Miningand EnergyDivision.

MININGENERGYDIVISION - VICTORIANDISTRICTBRANCH

TheCFMEU,throughitsVictorianMiningandEnergyDistrictBranch,isthedominantunionwithinthepowergeneratingandcoalminingindustriesinVictoria.Werepresentabout85%ofallworkerswithinthepowerstationsandbrowncoalminesinVictoria,includingthoseat:Hazelwoodpowerstation,Yallournpowerstation,LoyYang‘A’powerstation,Loy Yang‘B’powerstation,Newportpowerstation,AGLHydropowerstationsandopencut,browncoalminesatYallourn,MorwellandLoyYang.Additionally werepresenttheStawellGoldmineandcontractorswithinthe Security,EmergencyServices and MobileEarthmovingPlantindustries.

OurunionfeelswellqualifiedtomakethissubmissionbecausewearebasedinMorwellatthecentreoftheLatrobeValleyandourofficials,members,familiesandcommunityhavealldealtwiththeimpactsofindustryrestructuring,privatisationandtheconstantpushtoeliminatepermanentjobsandreplacethemwithcasual,part-timeandinsecurejobs.

LATROBEVALLEY’SRECENTHISTORY

TherestructuringandprivatisationoftheVictorianElectricityIndustryin1990sresultedinadrasticdropinemploymentwithinthepowerindustry,associatedconstructionandmaintenanceworkwithintheLatrobeValley.EmploymentintheLatrobeValleypowerindustryduringthistimeofrestructuringandthenprivatisationdroppedfrom10,800directlyandpermanentlyemployedpersons toless than2,000 persons,directlyand permanentlyemployed.

Sincethisperiod,there hasalsobeenavirtualcessationofthepreviouscontinuousconstructionofmajorcoalfiredpowerstationsintheLatrobe Valley.Asaresultanotherthousandormorejobsintheconstructionindustryandthecompaniesservicingthemhasalsogone.AsingledominantemployerintheformoftheStateElectricityCommissionofVictoriahasnotonlybeenreplacedbymanynewprivatepowercompaniesbuttheseprivatepowercompanieshaveinturnoutsourcedand contracted outmanysignificant partsoftheir businesses.

Theselargeprivatepowercompanies,whoaregenerallymultinationals,playoffpowerindustrycontractorsagainstoneanotheronprice,whichinturnputsadditionalpressureonthewagesandconditionsofferedbyindependentcontractors.Arecentexampleisoneprivatepowercompanyaskingallofitscontractorsandsupplierstocuttheirpriceby22%orfacethefuturelossoftheircontracts.Mostrefusedofcoursebutthisshowstheimmensepressurethatprivatepowercompaniescan bringto bear on smallerindependentcontractors.

Inmostcases,powerindustrycontractorshaveshownadistinctpreferenceforcasual,part-timeandinsecurejobs.ThisismostevidentintheSecurityandMobileEarthmovingPlantindustriesbutisalsosignificantduringpowerstationmajormaintenanceoutages;withnearlytheentireworkforcenumbering betweenoneandthreehundredareengagedona casualorlabour hirebasisforthe1-2monthmaintenanceoutage.Itisnotonlytemporaryworkwherethispreferenceisshownbecauseacontractorperformingpermanentmaintenanceworkrecentlyelectedtomaketwentypermanentmaintenanceworkersredundantwhilestillkeepingcasualsworkersunderitsemploy.

Wesubmitthatthefollowingcanbeattributedasconsequencesoflabourhire,insecure,casual,part-timejobsandunderemploymentandthatthisinquiryshouldexaminealloftheseissues/effects:

• Anetregionpopulationlossor depressedpopulationgrowth.
• Higherunemploymentlevelswithdrawals fromthelabourforce.
• Lowerfamilyincomes&/ornegativeimpacts on familylife.
• Limited or non-existentapprenticeship andtraineeshipoutcomes.
• Depressedlocalbusinessconditions.
• Weakenedcommunityparticipationandcitizenship.
• Less than optimalOccupationalHealthSafetyoutcomes.
• Less than optimalhealthoutcomes.

• Less than optimalproductivity/labourmarketoutcomes.
• Reducedemployeepayand conditions.
• Restraints inthe trade oflabour

Thissubmissionwillbrieflyoutlineourviewonalltheabovepoints;however,wewouldliketopointoutalackofresources,timeandmostimportantlyaccesstoaccurateinformationpreventthissubmissionfrom being far moreauthoritativein nature.

A NETREGIONPOPULATION LOSSOR DEPRESSED POPULATION GROWTH.

Since1996,theLatrobeValleyregionhasexperiencedamajordeclineinpopulationduetopoorjobopportunities,withtheregioncontinuingtoexperiencedepressedpopulationoutcomesincomparisonwithotherareas.Anobviousreasonforpopulationlosswasthedramaticdeclineinjobopportunitiesassociatedwithprivatisation,butcasualizationandlabourhirehavealsohadsignificantimpacts.

AfterprivatisationtheLatrobeValleyregionwasleftwitha largepoolof skilledworkerswithoutpermanentemployment.Manyoftheseworkerseitherleftourregiontoseekotherpermanentemploymentortookupcasual/labourhirepositionsperformingshutdownworkduringmajormaintenanceoutages.ThisshutdownworkisintensivewhileitisgoingbutgenerallyinfrequentandthishasledtotheseworkerschasingshutdownworkacrossAustralia,inbetweentheirmajoroutagework in Victoria.

Inaddition,asaconsequenceofthedropinlocalworkers,manyofthecasual/labourhireemployeeswhoperformworkonmajormaintenanceoutagesintheLatrobeValleynowcomefrominterstate.ThisinfluxoftemporaryworkershasledtoafurtherlossofjobopportunitieswithinourregionduetothesignificanttransientworkforceoperatingwithintheLatrobeValleyregion,furtheraffectingour localeconomyand its population outcomes.

HIGHER UNEMPLOYMENTWITHDRAWALFROMTHELABOUR FORCE

Insecure,casualandpart-timeandunderemploymentareoftenalltermssynonymouswiththelabourhireandcontractindustries.Ourexperienceisthatmostcasual/labourhireworkersareengagedbycontractorstoworkconsiderablelessthantheirfullcapacity,oftenhavinglongperiodsbetweenengagements.Thisleadstocasual/labourhireworkersexperiencingregularperiodsofunemploymentandsometimeswithdrawingfromlabourforceparticipationforextendedperiodsout offrustration.

LOWER FAMILY INCOMES&/OR NEGATIVEIMPACTS ON FAMILY LIFE

Becausecasual/labourhireworkersareoftenutilizedwellbelow theirfullcapacitythey generallyhavelowerincomesthancomparablepermanentemployees.Inindustrieswithverylowhourlyrates,suchasSecurity,thiscanleadtoworkersearninglessthaniftheywereonunemploymentbenefits.Theseworkersaretheworkingpoor,withourunionoftenhavingtoreducetheirunionfees becausetheycan’t affordthem.

Theexceptiontothiswouldbecasual/labourhireworkersperformingworkonmajormaintenanceoutageswhoworkexcessivehoursoverashortperiodoftime.Theseworkersoftenworksixtwelvehourdaysperweek(72hoursperweek)followedbyarestday.Thispatternofworkhasanobviousdetrimentalimpact onfamilylife,withtheparentdeprivedof time toproperlyinteractwiththeirfamily,especiallywhenmajoroutagesgenerallyrunforuptoeighttotenweeks.Iftheseworkerschasemajoroutage workinterstatethenthisfamilyand socialimpactcontinuesonalmostindefinitely.

IntheMobileEarthworkPlantIndustryLabourHire/casualemployeesareoftenengagedonaseasonalbasis.This means thatduringgood weathertheLabour Hirecompany/contractorwilltrytogetasmanyproductivedaylighthoursaspossible.Theseworkerswilloftenwork9-10hourdays,6daysperweekonacontinuousbasis.Wealsoknowofinstancesonmajorprojectsandcoalloadingoperationswherecasualworkershavebeenworkedcontinuouslyinexcessof54hoursperweekforseveralyearswithoutany leavebreak.Theonly way thesecasualworkerscangetabreakwiththeirfamilyistoquittheiremploymentandthengotothebottomofawaitinglistwhentheyreturn seekingwork.

Thosecasualworkerswhoareunderutilizedalsoexperiencefinancialstresswhentheyarenotworkingandareheldcaptivewaitingonaphonecall.Thismeanstheycannotplananyfamilyactivitiesbecauseifthephoneringsandtheyarenotavailable,theLabourHirecompany/contractorputsablackmarkagainstthemandthey arelesslikely tobecalledinfuture.Theseworkersalsohaveagreatdealofdifficultyingettingapprovalforloansduetothefluctuatingnatureoftheirincome.

LIMITED OR NON-EXISTENTAPPRENTICESHIPTRAINEESHIPOUTCOMES

Labourhireandcontractingcompaniesareskillstakersnotskillsmakers.Theyrelyalmostexclusivelyfromsourcingtrained/skilled/qualifiedworkersfromwhatwaspreviouslyapoolof

workerstrainedatpublicexpense.Asthispoolofskilledworkersdiminishes,becauseofouragingworkforce,contractorsseekfurthercasual/labour hireworkersfromoutsideourregionrather thanengagingapprenticesortrainees.Someofthereasonsforthisarebecauseprivatepowercompanieswantworkcompletedinverytighttimeframesandsomeofitisbecausethelackofcontinuity ofwork.

Instarkcontrasttothepast,veryfewapprenticeshipsortraineeshipsareavailableintheindustriesthatwecover,withonlyabouttwodozenapprentices/traineesemployedforabout2000workers.Whereapprenticeshipsortraineeshipsdooccurtheyaregenerallyemployedbythecoreorhostcompaniesand notbythe labour hire orcontractingcompaniesthemselves.

DEPRESSED LOCALBUSINESS CONDITIONS

TheLatrobeValleyregion’s business communitiesweredevastatedasa resultofthe restructuringandprivatisationofourandotherregionalindustriesinthemid90’s.TheeconomicimpactsofthisisstillmostevidentinthetownsofMorwellandMoe,whicharerankedinthetoptenpercentofAustralia’smostdisadvantagedtowns.Thereweresomesignsofeconomicrecoveryinthelate90’s,howeverthisrecoveryhasstagnatedinMorwellandMoeasthelabourhireandthecontractingindustriesgrewandpermanentemploymentwasreplacedwithinsecure,casualandpart-timejobsor underemployment.

WEAKENED COMMUNITY PARTICIPATION AND CITIZENSHIP

Activeandworthwhilecommunityparticipationorcitizenshipisdifficult,ifnotimpossible,forcasualorlabourhireworkersbecausetheyworkirregulardays,excessivehoursorhavetoliveawayfromhometotravelinterstateforwork.Thereislittlequality timeforthemtospendinthecommunityandtheirregularworkpatternsprecludesparticipationinsportingteams.Ourclubs,organisationsandsportingbodieshaveallexperiencedsignificantdropsinparticipantscausedbychangedworkpatterns brought on bythe labour hireand contractingindustries.

LESS THAN OPTIMALOCCUPATIONALHEALTHSAFETY OUTCOMES

WesubmitthatthereispersuasiveevidencetosuggestthatOHSoutcomesinthelabourhireandcontractingindustryare,onaverage,considerablypoorerthaninotherindustries,particularlyinthehigherriskareaofblue-collarlabourhire.TheexcessivehoursworkedinsomecasesintheMobileEarthworkPlantIndustryandMajorOutageMaintenancementionedearlierobviouslyintroducea significantfatigueelementthatcan’tbeignored but therearealsootherfactors.

WhilsttheOH&SAct2004mandatesadutyonthelabourhireorcontractagency,andthehostcompany,toprovideasafeandwithoutrisktohealthworkplaceforworkers,itisoursubmissionthatthis labourhire orcontractingarrangementoftenfails to achievethisbytakingshort cuts.

Inourexperiencehostcompaniesoftenenterintothesearrangementspartlytoattempttoremovethemselves fromtheirOH&S responsibility.Forexample, aprivategeneratoris currentlyseekingtooutsourceanarduoustaskofbunkerlancingtolabourhirecontractorsonthepremisethatthisactivitypresentsanOH&Srisktoitsownagingworkforce.TheprivategeneratorappearstohavelittleOH&SconcernforanyolderworkersengagedthroughLabourHire.Thatisofcourse,ifitdoesn’tdiscriminate bysecretlytellingthe contractor to onlyuseyounger workers.

Webelievejobsecurityisafundamentalingredientto maintainingasafeworkplaceandtopreventlong-terminjuriestoworkershealth.Workersengagedininsecure,casualandpart-timeworkoftenfind it difficult to fulfiltheirduties as employees under the Act and stayin employment.IfcasualworkersraisegenuineOH&Sissuestotheiremployertheyareoften‘blackbanned’andnotofferedfurther work becausetheyare seen as troublemakers.

We submitthatlabourhireandcontractworkersoftendonotreportinjuries,ordelaythereportingofaninjuryorhazardsasaresultofjobinsecurity,andthatthisoftenleadstoworkingwithaninjuryorinahazardoussituation.We furthersubmitthatworkersengagedincasual,insecureandseasonalworkwhoreportinjuries,particularlyinjuriesthataresignificantinjuriesorcauselong-termhealthdamage(spine,nerve,vibrationandlunginjuries)failtobere-employedandarelefttodealwiththeirinjuryorhealthdamagefinancially unaided.ThispracticealsoavoidstheinjuryorhealthdamagebeingproperlyrecordedanddeniestheworkerhisrightsunderaproperReturn-To-Workprocess.

Webelievethatlabourhireandcontractingworkersalsoexperiencehigherinjuryratesthanpermanentworkersbecausetheyaresubjectedtochangingworkplacesandhazards,withoutadequatetrainingand instruction.It isourexperiencethatin theMobileEarthworkPlantindustryalotofcasualandtemporaryhireswhocomedirectlyfromthefarmingsector.ThefarmingsectorhasnotoriouslypoorOH&SoutcomesinVictoriabecauseitsworkersaregenerallyself-employed,poorlyregulated,lackeducationinOH&Sandhaveastrongmindsetonproductionintheirownfinancialself-interest.

Unfortunately,althoughtheseex-farmworkerspossessgoodmobileplantskillstheyalsobringthefarmOH&Sculturewiththem.Forexample,theyregardcleanandhygieniccribroomfacilitiesinwhichtoeattheirlunchasanunnecessaryluxuryratherthananecessaryrequirement.Likewisethereisatendencytoimprovisetoavoiddelayingproductionratherthantotakeaslowermoresafemethod.

WerecommendthattheVictorianWorkcoverAuthorityshouldconductspecificresearchtoexaminetheOH&Soutcomesinthelabourhireandcontractingindustries,ascomparedtothosewithinthepermanentworkforce.Thisshouldbedoneinconjunctionwiththeestablishmentofanindustrywidedatabasethatisaimedatidentifyingcasual/labourhireworkersandimprovingtheOH&S performancewithin this sector

LESS THAN OPTIMALHEALTHOUTCOMES

Wesubmitthatthereisevidencetosuggestthatthehealthoutcomesofworkersinthelabourhireandcontractingindustriesare,onaverage,considerablypoorerthaninotherindustries.Casual/LabourHireworkerstendtochangeemployersmoreoftenandthereappearstobealackof ongoing workplacehealthmonitoring,such asregularhearing testing.Werecommendthattheuponestablishingaregistrarofworkersinthissector,theVictorianWorkcoverAuthorityshouldconductahealthstudyofcasual/LabourHireworkersascomparedwiththepermanentworkforce.

LESS THAN OPTIMALPRODUCTIVITY/LABOUR MARKETOUTCOMES

Themyththatlabourhire,casualandparttimeworkprovidesmuchneededflexibility toworkersisquicklyexposedwhenitisunderstoodthatthemostsoughtaftertypeofemploymentispermanent.Webelievethatmostworkerswilldoalmostanythingtogetandkeeppermanentwork.

ContractorsandLabourHirecompaniesalwaysattempttokeepafew‘permanents’ontheirbooksandusetheseworkersas‘carrots’tothecasualandpart-timeworkers.These‘permanents’arepickedbytheemployerasworkforceandOH&S‘representatives’andgenerally‘behave’tothebosseslikinginordertokeeptheirpermanentjobstatus.Thisundoubtedlyleadstoacompliantworkforce;however, itdoes not engenderindependent or innovativethinking.

Casual/LabourHireworkersexperience agreatdealofunderutilization orareoftenmovedaroundfromsitetosite,negativelyimpactingontheconsistencyinthejob,knowledgeoftheworksite,workpracticesandsafetysystemsandknowledgeoforganisationstructure/supervision. These

labourhireorcontractrelationshipsareoftendescribedasatriangularrelationshipbetweentheworker,thelabourhireorcontract agencyand the hostbut in ourexperiencetheyare barelya twowayrelationshipbecausethehostcompanydistancesitselffromanyresponsibilityofrelationship.

REDUCED EMPLOYEEPAY AND CONDITIONS

Casual/LabourHireworkersgenerally haveinferiorrightsandentitlementsundertheirEnterpriseAgreementsbecausetheyhavelittlesayintheirnegotiationandprivatepowercompaniestendtosqueezetheircontractoremployerfinancially.Tocutcost,LabourHirecompaniesandcontractorstendtoshedanyentitlementsthatarenotessential orwouldputthemabove theNationalEmploymentStandardminimum.

Thisreductioninconditionsandentitlementsisthenfurtherimpactedbytheinfluxofcasual/temporaryfarmworkers,whohavegrownuponlowwagesandpoorconditions,whobelieveevenbasicindustrywages and conditions areoverlygenerous.

WhenanEnterpriseAgreementisputupbytheLabourHirecompany/contractoragreatpoolofunderutilizedcasualsaregiventhesamevotingrightsaspermanentworks.Whileintuitivelyitmaysoundfairallworkersgetavote,howisitfairthatacasualworkerintheSecurityIndustry,whohasonlyworked6shiftsinthepast12monthsandcanworkelsewhere,getsthesamevoteasapermanentworkerwhomustworkunderthosepayandconditionsdayindayout?IntheSecurityIndustrytherecouldbeupto3-4casualstomakeupafulltimeequivalentpositionandtheirunderutilizationmakes themwillingto accepteventhesmallestofsalaryincreases.

Inaddition,casual/LabourHireworkersoftenworkunderadifferentEnterpriseAgreementwithinferiorconditions tothatof thepermanentemployeesfromhostpowercompanies.Forexample,in one case,a hostpowerstation companyhashad aLabour Hireemployee backfillingpermanentpositionsonatemporarybasisforacontinuoustenyearperiod,yetthisLabourHireemployeeonlygets paid halfthe hourlyrateandgets muchlowerrates ofpaywhenovertimeis worked.

RESTRAINTS IN THE TRADE OFLABOUR

LabourHireandContractingcompaniestendtodeliberatelymaintainexcessivelylargepoolsofcasual/seasonalworkersontheirbooks.ThisisveryeasyforthemtodoinanarealiketheLatrobeValleythathasexperiencedsuchadramaticreductioninemploymentwithinitsregion.Themotivationfor this isto underutilizecasuallabourtokeepthempoorer andhungryfor work. This

isthemajormechanismofabusethatLabourHire/contractingcompaniesuseagainsttheirworkersin the LatrobeValley.

Bywayofexampleiftheydiscoverthatoneoftheirworkershasdaredtakeupemploymentwithanothercompanythatworkeristakenofftheirbooks,eithertemporarilyorpermanently,aspunishment.This‘blacklisting’of casualemployeesisarestraintof tradebut theyaretooscaredtospeakupincasetheyneverworkagain.Thispracticealsopreventsworkersfromseekingtemporaryworkwithothercontractors,whomaypayhigherwages,actingtokeepwagesandconditionswithintheindustryartificiallylow.Thiseffectisdirectlyverifiablebycomparinganexcavatordriverwages inthe LatrobeValleyto onein the HunterValley.

ThesametacticisemployedbyLabourHireandContractingcompaniestokeepOH&Srepresentativesanduniondelegatesundertheirdirectcontrol.Ifeithermakeanyissuesforthecompany,theyare also‘blacklisted’indefinitelyoruntiltheycomply.

Thistacticalsoexplainsthestrongpreferenceforcasual/labourHireemployeesbycontractors,eveninsituationswhereitdoesnotmakeanysense.Bywayofexample;usingcasualstofillreliefpositionsinrotatingshiftrostersintheSecurityIndustry,wherethehoursrequiredexceedaworker’sfulltimeequivalenthours.Intheorythe cost ofa eithera permanentor casualemployeeinthissituationshouldberoughlythesame,yetmostemployersdisplayadefinitepreferenceforengaginganumberofcasualemployeesinsteadofonepermanent,despitereasonsexplainedpreviouslynot always beingasproductive.Inthiscasecontrolofmanagementoveritsemployeesappears to takepreferenceover labour productivity.