Response to Inquiry

‘Victorian Inquiryinto the LabourHireIndustryandInsecure Work’

ABOUTSPRINGVALEMONASH LEGALSERVICE(SMLS)

  • SMLSisageneralistcommunitylegalcentre(CLC)basedinthesoutheasternsuburbsofMelbourne.
  • Ourcatchmentareaforclientsisextremelymulticultural.CLC’sassistclientsoflowersocio-economicstatus; our areahasnumeroushouseholdsin thiscategory.
  • SMLSprovidesassistancethroughMonashUniversitystudentsofProfessionalPractice,actingunderthesupervisionofexperiencedlawyersaswellasthroughournon-clinicalpractice.
  • SMLSprovidesfreelegalassistanceincludingbutnotlimitedtotheareasofemploymentlaw, familylaw,civil litigation,victimsof crime and criminallaw.
  • ClientscometoSMLSthroughavarietyofclinics.Nighttimeclinicsarestaffedbyvolunteerlawyerswhiledayclinics includegeneralistsessions anda weeklyemployment lawclinic.

BASIS OFSUBMISSIONS

  • Oursubmissionsareinformedbyourcasework,theemploymentlawmatterswetakeonfromourspecialistandgeneralistclinics.Wehavenoticedarecenttrendtowardinsecureworkpracticesamongstour client group,facilitated bysocialmediasitessuchas“Gumtree”.

INSECUREWORK

  • ManyoftheworkingarrangementsbroughtaboutbyadvertisingonGumtreeorsimilarsocialmediasitesareamong themostinsecurepossible.
  • Hereby,contractorstypicallyenterintoarrangementswithsub-contractorsforlow-skilledlabourtasksortrades,usuallytobeundertakenatresidentialproperties,suchashousepainting,roofing,tiling,landscaping,gardeningandthelike.Suchcontractsare almostalwaysoral. Theremaybenorelevant award, or awards areignored, and a lowhourly rateisagreed to,usuallytobepaid on completion in cash.
  • Contractorsfromnewlyarrivedmigrantcommunitiesoftenseekworkersfromthesamecommunity.SuchworkersfrequentlylackbasicEnglish-languageskillsoranyknowledgeofapplicableworkplacelaw.
  • Suchworkersarevulnerabletoexploitation.Theyareoftennotpaiduntilthecontractorispaidpursuanttohiscontract.Wehaveseencaseswheretheyarenotpaidatall.Thismaybebecausetheirworkisallegedlynotofanadequatestandardorfornoreasonotherthanthey arebeing“scammed”.
  • Contractorsareabletoadvertiseforworkerswithoutprovidinganame,avalidandregisteredAustralianBusinessNumber(ABN)orAustralianCompanyNumber(ACN),aregisteredaddressorevenanameandtelephonenumber.CoupledwithalackofEnglishproficiency,thismeansworkersareoftencompletelyignorantofthedetailsofthoseforwhomtheyareworking.
  • This makes legal redress in some cases impossible. Applicants are not able to bring aVictorianCivilandAdministrativeTribunalclaim,forexample,withoutproviding,attheleast, the Respondent’s name, ABNor ACN, and address. Even where suchdetails areavailable,enforcementof arelevantcourtorTribunalorder can bedifficult, especiallywherethe applicanthaslimitedmeans, and wherethe respondent is deliberatelyavoidingEnforcement.

RECOMMENDATIONWITHRESPECT TOINSECUREWORK

  • Itcouldbemadealegalrequirementforanemployer,oranycontractorengagingasub-contractor,tosupplyanyprospectiveemployeewitha name,address,ABNor ACN.Regulationcould betheresponsibilityof theFairWorkOmbudsmanorother federal body
  • Alternatively,orinaddition,SMLSrecommendsgreaterregulationofGumtree,andsimilarsocialmediasites,whicharetheconduitoftenusedtobringaboutinsecureworkingarrangements.Suchsitesshouldbeforcedtorequireaprospectiveemployer’sdetails.Financial penaltiescould ensue for failuretodoso,ortoproperlyverifydetails.

SHAMCONTRACTING

  • Workarrangementsusuallycanbecategorisedas:(1)wheretheworkerisanemployeeoftheemployer,asdefinedbyawrittencontract,protectedbyanawardorenterpriseagreement,with rightswith respecttonoticeand termination under the Fair work Act;or (2)wheretheworkerisanindependentcontractor.Thetermsofthisemploymentareexclusivelydefinedbythecontractbetweentheparties.
  • TheHighCourthassetoutatestsothetwoarrangementscanbedistinguished.Autonomyisakeyfactor(distinguishingtheindependentcontractor),asarewhethertheworkerusestheir owntools,wear’sa uniformand othercriteria.
  • Therealityisthatemployersmaywishtoclassanarrangementasthatofanindependentcontractorsoastoavoidhavingtopayhigherwages,andpassoncoststotheemployee,oftenbyanexplicitwrittenagreement,wheninfacttheworkershouldbeclassedasanemployee.Thisis shamcontracting.
  • Wehaveseenthatshamcontractingisparticularlyprevalentincertainindustries,forexamplethetransportindustry.Wefrequentlyseeclients(e.g.courierdrivers)withlowhourlypay,highcosts(e.g.forfuelandmaintenanceoftheirvehicles)andlittleautonomy,andlittlechanceoflegalredress,becauseofanoppressivewrittencontracttheyareforcedtosignatcommencement.Suchworkershavelittlebargainingpowerandchoicewithrespecttotheworktheydo.

RECOMMENDATIONWITHRESPECT TO SHAMCONTRACTING

  • Workersclassedasindependentcontractorsbyanoppressivecontracttheyareaskedtosign can commencelegal proceedings tohave acourtrule on thenatureof thearrangement.Courtshavefrequentlysaidtheywilllookpastthe“form”ofagreementstotheir“substance”,whichisencouraging,butunfortunatelylitigationisbeyondtheexpertiseand/ormeansofmostpeople,especiallypoorlypaidworkers.
  • SMLSbelievethoseclassifiedasindependentcontractors,byashamcontractorotherwise,shouldhavetherighttoapplytotheFWCtohavetheiremploymentstatusdeterminedsummarily.AfindingbytheCommissionthatapersonisanemployeeofanentity,forexample,couldthenenablethatpersontopursuetheirentitlementsintheMagistratesorFederalCircuitCourtwithouthavingtofirstprovetheirrighttousethejurisdiction.Thiswouldremovemuchoftheuncertaintyaroundwhatisalreadysomewhatcostlyandcomplexlitigation
  • Thiswouldallowpartiestohavecheapandquickresolutionoftheirdisputes,anddiscouragesham contracting, andexploitativeworkpractisesgenerally.

SMLSprovidesthefollowing briefanalysisoftheservicerawdata:

Thedataisfrom ‘adviceonly’contactwith clientsduring the period ofJanuary 2015 to June2015.

Theclientsmayhaveattendedour‘drop-in’daysessions,nightserviceor,our‘appointmentonly’employmentlawspecialistclinic

141adviceswerereviewed

  • ‘unclassified’includes8clientsthatrequiredfurtherinvestigationtoestablishwhethertheywerean independentcontractororemployee

Casual / PartTime / Full Time / Unclassified / IndependentContractor
20 / 41 / 48 / 25 / 7
14% / 29% / 35% / 17.7% / 5%

TypesofMattersinclude:

  • Unpaidentitlements
  • General protectionandunfairdismissalclaims
  • Atleast75%oftheunclassifiedclientswereseasonalworkers,hiredthroughan‘agency’or,obtainedworkbyway of socialmediasuchasgumtree