Professor Forsyth

Inquiry Chair

Victorian Inquiry into

the Labour Hire Industry and Insecure Work

Via email:

2 December 2015

Dear Professor Forsyth

The Australian Institute of Employment Rights (AIER) is pleased to make the following submission to the Victorian Inquiry into the Labour Hire Industry and Insecure Work.

AIER is anindependent not-for-profit organisation that works in the public interests to promote the recognition and implementation of the rights of workers and employers in a cooperative workplace relations framework. Further details about the AIER are attached.

The work of the AIER is based on the Australian Charter of Employment Rights developed by the AIER in 2007. The Charter identifies the fundamental values upon which we believe good workplace relationships and laws must be based if they are to provide for fair and decent work. The Charter is a blueprint for assessing government policy, legislative reform and workplace relations practices. We encourage the Inquiry to use it as a reference for factors to be considered in order to promote secure work.

Please find attached as our primary submission to this Inquiry the AIER’s submission,“Striving for Decent Work to End Insecurity in Australian Workplaces”, to the Independent Inquiry into Insecure Workfrom January 2012. While that submission provides recommendations to the ACTU in the context of the Inquiry it established, the discussion of the issues surrounding insecure work and our conclusions and recommendationsremain relevant to the current Victorian Inquiry.

Our submission to the Productivity Commission’s Inquiry into the workplace relations system also provides a useful insight into our approach to issues of insecure work. This submission can be downloaded from our website:

The key points to note from these submissions are:

  • Insecurity and precariousness of work is growing. Work is also becoming more fragmented. Insecurity of work takes different forms.
  • The global trend of increased insecure work is a concern and is having and will continue to have detrimental impacts on our society.
  • The key purpose of regulating work is to balance inequality in bargaining power between those who perform work and those for whom work is performed. Where regulation does not extend to a section of the workforce, our regulatory framework is failing that fundamental purpose.
  • The way the employment relationship has been defined in our workplace laws promotes insecurity. The Charter grants rights to “workers”, which includes employees but also includes other workers, such as those hired by labour hire companies.The attached submission proposes a comprehensive definition of a “worker” to address this core problem.
  • Australian workplace relations laws need to be recast so that every worker has access to a suite of minimum entitlements and rights, with no ability to contract out of such entitlements and rights.
  • The concept of decent work and work with dignity must underpin secure work. Insecure work is not decent work. Insecure workrisks workers being treated as commodities rather than being according dignity.
  • Solutions to the problems associated with insecure work can only be found in a multipronged, multilayered approach.

Further to the attached, we make the following comments on some specific issues raised by the Discussion Paper.

International Labour laws

The AIER’s work, along with the Charter of Employment Rights, is informed by Australia’s international obligations as provided for by international law, particularly the Conventions of the International Labor Organisation (ILO).

The trendof increasing insecure and precarious work is a global trend. Around the world governments, civil society organisations and communities are grappling with the impacts of insecure work and the policy parametersto make work more secure.

The changing nature of work and it implications are at the forefront of much of the ILOs work, particularly its Decent Work agenda. The ILO Director-General in a recent speech to the Regulating Decent Work conference noted:

“Even before the crisis the world of work was undergoing profound changes - as a result of technological change, increased migration, ageing societies and shifting employment patterns - in a direction often away from, not towards, achieving social justice, which is the mission of this Organization where you meet. And these changes will continue and will bring about a very marked evolution in the world of work.”

The shift away from social justice mentioned above is an important reflection. The regulation of relationships in the workplace has been a significant factor in the prosperity and degree of social justice nations like Australia have experienced in recent times. The rise of insecure and precarious work puts these advances at risk.

It is also becoming clearer that many of the instruments or tools that were effective in previous decades are less suited to current circumstances and that tacklinginsecure and precarious work and provide for decent living standards will require some creative thinking. However, core principle as outlined in ILO Conventions and the Australian Charter of Employment Rights must underpin the development of new ways to approach insecure and precarious work.

Two core principles that must remain at the heart of this debate are those that relate to minimum standards and freedom of association. In Australia, we have seen an undermining of minimum standards both through the development of legislation that provides the scope for opting out of certain employment standards and also the ability of new business models to avoid employment obligations. The use of labour hire being one of the most obvious such models. The rise of business models in the growing on-demand economy utilising technology, such as the taxi service Uber, is another example.

As mentioned above, the AIER submits that every worker should have access to a suite of minimum employment rights that do not allow for opting out or exemptions. We do not believe employers should be able to structure their businesses in ways to avoid obligations or deny labour rights to their workforce.

The ability of workers to organise collectively in their shared interests is another core right we suggest must underpin an approach to creating greater security in the workforce. Freedom of association protection in Australia is limited and manifestly inadequate to enable significant proportion of the workforce to exercise their fundamental right to organise, particularly those that no longer fall within the definition of an employee. AIER has outlined our views on the inadequate way freedom of association is recognised in Australian labour law in our submission the ALRC Traditional Rights and Freedoms Inquiry and our recent paper, “Free to Associate?”

How to enable and facilitate organising and bargaining along supply chains and between related corporate structures is a key question when it comes to tackling insecure and precarious work and the fracturing of work that is becoming evident with corporate re-structuring. The recent example of Woolworth’s deciding to utilise labour hire workers at one of their distribution centres rather than employ workers directly combines both insecurity and fracturing of work to avoid workers being able to access core labour rights. More work needs to be undertaken to develop creative solutions to this global challenge.

We encourage the Inquiry and the Victorian government to approach the issues raised in the Inquiry and any proposed actions through ensuring these core labour rights are at the centre of deliberations.

Regulation of labour hire companies

The AIER supports the regulationof labour hire companies to protect and improve conditions for workers engaged through such structures. It is an important step but not a sufficient one to protect the rights of workers faced with insecure and precarious workplace relations.

In light of decisions likeFair Work Ombudsman v Valuair Limited (No 2)[2014] FCA 759, the use of labour hire, corporate restructuring and different business models poses a significant threat to the employment standards and rights Australia has developed over many decades.

Any regulation of labour hire should be directed towards ensuring the recognition of key principles such as those found in the Charter of Employment Rights, including employers and workers acting in good faith, workers being accorded dignity at work, minimum standards are respected, as are freedom of association rights such as the right to collectively bargain and organise.

Applying these principles it follows that regulation must seek to ensure minimum standards of engagement are complied with, freedom to organise is not unduly restricted and the operations of the labour hire company are not directed towards or being used to avoid workplace entitlements and rights or undercut collective bargaining outcomes.

The Inquiry will likely be presented with various options for regulation and indeed arguments as why such regulation is unnecessary. AIER urges the Inquiry to approach the issue bearing in mind the principles mentioned above.

While there are limitations to what the Victorian Government may be able to achieve legislatively, there are no impediments to the Victorian Government taking the lead on promotingthe above principles and putting them into practice where possible. We propose one option for promoting desired workplace cultural change from a principles-based approach below.

Interns

Over the last year, AIER has been working with Interns Australia on issues connected to unfair internships, particularly the exploitation of young workers through unpaid internships. The rise in unpaid internships around the world as well as here in Australia is a concrete example of how insecure work is creating exploitative situations for young workers.

Unpaid internships have become a prominent feature of the youth labour market as young people strive to overcome the paradox of not being able to acquire experience without a job, and acquire a job without experience. The lack of regulation concerning unpaid internships also has the potential to undermine established provisions in the broader employment system and mask the urgency for a long-term plan towards youth employment.

With high unemployment and limited job prospects, working for free risks becoming normalized for groups of young people.While there is little official data on numbers of interns, various countries’ estimates indicate internships are flourishing, with many, if not, most unpaid.

The report prepared by Professors Andrew Stewart and Rosemary Owens for the Australian Fair Work Ombusdman, “Experience or exploitation? The nature, prevalence and regulation of unpaid work experience, internships and trial periods in Australia”, provides many examples of internships and other unpaid work experience in Australia. However, there is no reliable data available to provide any accurate assessment on intern numbers. The report also provides a useful summary of the global and local Australian context for the increase in internships.

In their report, Stewart and Owens reflect on the impacts of globalisation on Australia and the implications for the labour market, including the proliferation of various forms of non-standard employment relationships. They note on pages 22 and 23 of their report:

“the developed world has witnessed a proliferation of various forms of non-standard employment relationships. This has also been true in Australia. While these relationships may once have been described as ‘atypical’, that has not been an accurate description for a long time. However, it continues to be the case that precarity is a hallmark of such arrangements…While many forms of non-standard work are acknowledged as involving ‘employment’ in the conventional sense, a perhaps even greater challenge has come when work falls, or is claimed to fall, outside that category. In the new world of work, the language that was once reserved for businesses as market players is often now applied to workers. Many are described as powerful ‘knowledge’ workers, persons who are independent risk takers, who invest in themselves, in their own skills, and who are responsible for developing their own ‘human capital’.”

Interns currently occupy a grey space in Australian labour law. Technically, interns are employees entitled to the minimum standards of employment found in the Fair Work Act. However, as Interns Australia points out, there is widespread non-compliance with the Fair Work Act when it comes to interns.

While the deficiencies in law, policy and enforcement that relate to interns are primarily a federal matter to be resolved, the Victorian government can support education campaigns and initiatives from organisations like Interns Australia which are aiming to create cultural change within the business community when it comes to providing for fair internships.

Other vulnerable workers

The Discussion Paper also raises the question of other vulnerable workers, including migrant workers. We refer the Inquiry to the work of Dr Joanna Howe, including her chapter in the AIER’s latest publication, Employment Rights Now: Reflections on the Australian Charter of Employment Rights. In her chapter on “Work with Dignity”,Dr Howe argues that

“Antithetical to the very notion of dignity at work, many temporary migrant workers are seen as commodities to be moved around the Australian labour market according to employer demand.”

She comments on the precarious nature of temporary migrant workers given how Australia’s temporary migration program ties migration to employment leaving temporary migrants at the mercy of their employers. Dr Howe reflects on a number of individual cases of extreme exploitation by employers of migrant workers and the effect such exploitation has in lowering workplace wages and standards.

Again, while the regulatory deficiencies around migrant workers fall primarily within the ambit of the federal government, the Victorian government can show leadership in supporting education and promoting cultural change in workplaces to uphold the dignity of all workers.

Cultural change

The AIER has previously proposed the creation of a Centre for Workplace Citizenship. See Annexure 5 of the attached submission. We submit the proposal continues to have merit and that there is a need for an evidence-based advocacy body to promote models of cooperative workplaces that promote cultural change to ensure fair and decent work.Such a Centre could play a significant role in addressing the rise and consequences of insecure work.

Should you have any queries regarding our submission please contact me on 0403 456 131 or at .

Yours faithfully

Clare Ozich

Executive Director

Australian Institute of Employment Rights