Community & Public Sector Union
Teresa Davison Director, Communications and Science
30 November 2015
Professor Anthony Forsyth
Chairperson
Inquiry into the Labour Hire Industry and Insecure Work
Email:
Dear Professor Forsyth
Inquiry into the Labour Hire Industry and Insecure Work
The PSU Group of the Community and Public Sector Union (CPSU) is an active and progressive union with approximately 55,000 members. The CPSU represents employees in government employment, the telecommunications sector, call centres, employment services and broadcasting.
The CPSU welcomes the opportunity to make a submission to the Victorian Government’s Labour Hire and Insecure Work Inquiry.
Labour hire workers have less job security, fewer entitlements and as a result are less satisfied with their position. This has flow on consequences for many areas of their lives such as the ability to plan for the future, eligibility for loans andaccessing rental accommodation.
Insecure work is a significant issue in both the public and private sector areas of CPSU coverage. While there are some circumstances in which there is a legitimate need for the engagement of workers on a temporary basis, the current use of these arrangements goes far beyond this.
This submission focuses on the use of Chandler McLeod and Cyientto supply temporary workers to Telstra inBallarat and outlines some key features of employment of these workers including: employment status, length of employment, pay and conditions, career opportunities, rights and entitlements, financial insecurity,and the difference in treatment of labour hire staff vis a vis Telstra employees.
It must be noted that the CPSU’s membership areas encompass many different types of insecure working arrangements including the direct engagement of staff by an employer on a casual or temporary basis; the use of contractors, sometimes hired through a third party provider.
Whilst ‘flexibility’ and ‘efficiency’ are often given as reasons by employers for engaging insecure workers, in the CPSU’s experience, benefits afforded to the employer come at the expense of worker entitlements. The CPSU contends that better workforce planning can obviate the need for a high reliance on temporary workers,and provide employers with the benefits of a stable skilled workforce, including limiting recruitment and training costs, and reducing the labour hire premium costs. Further, the CPSU contends that reducing reliance on labour hire strengthens corporate knowledge, increases business continuity, improves security of information and accountability, improves quality of service, and increases staff morale.
The benefits of a permanent workforce far outweigh any short term gains some believe arise from labour hire arrangements.The benefits for workers from permanent, stable employment extend well beyond the individual, to their families, and to local economies.
The CPSU is currently collating examples from current and previous labour hire workers in Ballarat. The CPSU will provide their stories as supplementary information prior to the 29th February, 2016.
Please contact me on (03) 8620 6343 or at you require any further information.
Yours sincerely
Teresa Davison
Director, Communications and Science
CPSU (PSU Group) Submission
Inquiry into the Labour Hire Industry and Insecure Work
November 2015
Background
At present, labour hire companies Cyeint and Chandler McLeod are engaged by Telstra to supply labour in Ballarat. These labour hire workers are co-located in the Telstra building with Telstra permanent staff. There are approximately 40 Telstra workers and 60 labour hire workers. However, the majority of Telstra permanent staff are in the process of either relocating to Melbourne or being made redundant.
Labour hire workers work side by side with Telstra workers, performing exactly the same functions, have Telstra ID numbers as well as Telstra email address and must abide by Telstra code of conduct and values at all times.
Prior to Chandler McLeod, Telstra used a number of labour hire providers to supply temporary workers starting with Dorothy Farmer Services, then Ross Managed Services.
Employment status
When potential workers apply for roles through employment agencies they are led to believe they will be directly employed by Telstra. The job advertisement usually says words to the effect‘you’ll be working for a major telecommunications company’. Applicants only discover the labour hire and casual status at the point they are offered work.
These workers are employed on an ongoing casual basis with an expectation that they willbe available at all times. The majority are employed to perform full time hours, usually includingan expectation of shift work and/or weekend work, but on a casual basis.
For the last nine months,labour hire workers placed at Telstra have been asked to sign contracts that are casual but are ‘maximum term’ contracts.Maximum term contracts remove the casual loading from the base casual wage but provide access to pro-rata payment of personal leave and annual leave.According to the contract nature of the hire, workers are not entitled to redundancy payments. The labour hire company classifies the worker as a casual worker for all other industrial obligations. Examples of the Chandler McLeod and Cyient contracts are attached.
Length of employment
It must be noted that while labour hire is generally used to supply short term labour to fill peaks in business activity, approximately 75 per cent of those placed with Telstra Ballarat are employed for at least 12 months. Approximately 10 per cent have been employed long enough to qualify for long service leave. This is of significant concern given the issues around pay and conditions, career opportunities and rights and entitlements outlined below.
It is also worth noting that Telstra’s own policy states that contingent labour may only be engaged for a maximum of 18 months in the same position, with any contract period not being longer than twelve months. A copy of this policy is also attached.
Comparison of pay and conditions
Labour hire workers at the site perform the same functions as permanent Telstra workers. Telstra workers are employed under the Telstra EA 2015 and perform level 4i work whilelabour hire workers are covered by Telecommunications Services Award 2010. There are significant differences between the two industrial instruments. The CPSU will provide a detailed comparison between the pay and conditions of Telstra workers and those of labour hire workers, as supplementary information prior to the 29February 2016.
Cyient offers all workers a maximum length contract, however. McLeod Chandler is still offering workers employment on a case by case basis. The Chandler McLeod Maximum term contract is not as explicit as the Cyient offer. Entitlements are on a case by case basis where offers of accrued annual leave are based on an individual’s performance.
Career opportunities
There are limited career progression opportunities within both Cyient and Chandler McLeod.While there have been job opportunities within Telstra, the labour hire employment contract specifically prohibits labour hire staff being directly employed by the client unless the labour hire company approves it. The CPSU has had workers report instances of the labour hire companies denying requests to apply for permanent Telstra jobs.
Rights and entitlements
Workers feel they are unable to speak up or ask about their rights. Workers have advised the CPSU that Chandler McLeod management does not respond, or is very slow at answering workers’ written requests for information regarding entitlements.
It is of great concern that managers provide adviceof any changes to entitlements verbally and any incentives are not expressed in writing. When workers do not receive what was promised verbally, managers discourage follow up action.Barriers to asking questions or raising concerns include: no response from team leaders or management; threats about not getting more work; and, intimidating tactics e.g. ‘our contract is coming up soon and we’ll be making decisions about who is kept on’.
The circumstances under which labour is provided to Telstra is very one sided, with little to no flexibility for workers – who in many cases are not truly temporary.Workers who request flexibility are often no longer employed.If a worker takes unpaid sick leave or carers leave they are quite often not offered further employment.The CPSU estimates that this would occur in approximately half of cases where workers take unpaid sick or carers leave. In these circumstances the labour hire company’s response is simply that work is no longer available and/or the workersimply is not put on the roster.
Workers feel that if they pursue the matter, they couldsuffer future repercussions given that these labour hire firms have contracts with other employers in Ballarat.
Insecure financial position
Labour hire workers are technically classified as casual despite often long term employment. Workers experience difficulty qualifying for house leases, car loans, personal loans and mortgages as they are a greater lending risk than a person withpermanent ongoing employment.
Managers of labour hire companies will sometimes lie about the employment status to real estate agents and finance companies to assist workers securing housing or finance. Where they are honest about their employment status, higher interest is sometimes charged to compensate for the risk, and real estate agents are sometimes unwilling to let a house to the worker based on higher risk of rent default.
Labour hire workers are treated differently to Telstra workers
The CPSU believes that labour hire workers are held to a different standard to permanently employed Telstra workers. Even disparities that may seem minor have a very real impact on reinforcing the notion of a split workforce – one with a second rate status. Members report that an ‘us and them’ culture is pervasive in the workplace where labour hire workers are seen as second class employees. Labour hire staff also:
- have higher dress standards with labour hire expected to wear corporate clothes.
- are not allowed to access to mobile phones during work time despite not being in a customer facing role, which can cause problems for child care and family care arrangements.
- are banned from having water bottles on their desks.
- must provide a medical certificate for each personal leave absence.
- are docked pay automatically for being 3 minutes late for work or receive a final written warning.
- are taken off the roster for ‘business needs’ to make an example of in the workplace for minor ‘breaches’.
- must adhere to both Telstra and labour hire values, code of conduct.
- must adhere to productivity measures applied by both Telstra and labour hire managers.
Particular impacts on women employed through labour hire
The use of labour hire has a significant impact on women’s employment. Those employed to work at Telstra have no access to employer paid parental leave, no paid carers leave beyond the National Employment Standard entitlement, no access to other enterprise agreement entitlements including domestic violence leave and no access to Telstra’s flexible workplace policy.
Insecure Work
Telstra isnot renewing itslabour hire contract with Chandler McLeod.This means twelve labour hire workers have an end date in January 2016.These workers will be entitled to one weeks notice but no redundancy payments.
Conclusion
In the vast majority of circumstances, the notion that this form of employment allows for ‘flexibility’ with benefits for both the employer and worker is a myth. It is the worker who bears all the risk, whether that isdue to a downturn in business,restructuring by theclient or change or sale of the labour hire business.
If appropriate action is not taken, we risk seeing a growing underclass of Australian workers with fewer entitlements and limited job security. The CPSU believes that appropriate action should be taken at a government, industry and enterprise level to redress this situation.
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