NSW Labour Hire Task Force Inquiry
November 2000
- Organisational characteristics
The Australian Library and Information Association [ALIA] is the professional organisation for the Australian library and information services sector. It seeks to empower the profession in the development, promotion and delivery of quality library and information services to the nation, through leadership, advocacy and mutual support. ALIA has more than five thousand individual members and fourteen hundred employer or institutional member organisations. Membership is located in a wide range of industry and cultural sectors in all states and territories.
- Labour hire companies and the library and information workforce
Employment agencies and labour hire companies are actively engaged in recruitment and employment of library workers in New South Wales, and in other parts of the country. For some years now, these organisations have played a leading role in provision of staff to private sector library and information service agencies. More recently, use of labour hire companies by public sector bodies has increased markedly.
- Particular characteristics of library workers
The library workforce is predominantly female [86%]. A high proportion of library workers [22%] are part-time or casual employees.
- Issues for library workers
ALIA members have raised a number of significant concerns about labour hire companies. Foremost among them are:
- uncertainty about their employment status, and specifically whether some 'assignments' constitute a contract of service [employee] or a contract for services [independent contractor]
- where an employment relationship is established, whether the labour hire company or the organisation in which they actually work is in fact the employer
- in cases where the employment contract is with the labour hire company, confusion about who has control over the work and responsibility for performance measurement
- the effect upon employment benefits of hiring via labour companies, and specifically whether standards applying in the host organisation are available to workers supplied by the labour hire companies
- an increasing tendency for downward pressure on wage levels and other conditions resulting from use of labour hire companies
- an apparent legal vacuum in regard to occupational health and safety and workers compensation liability resulting from uncertain contractual obligations
- the extent of control over subsequent employment which labour hire companies on occasions seek to impose: initial contracts, for example, often require the employee to undertake that, after completion of the contract, no subsequent employment will be accepted unless the labour hire company is informed.
- Remedial action
ALIA believes there is a need for more co-ordinated and transparent arrangements for labour hire company operations. At the least, a firm Code of Conduct should be enforced by government. In some matters, especially those going to award/agreement conditions and occupational health and safety [OH&S] obligations, ALIA believes a legislative response is preferable.
The Association especially opposes any circumvention of defined employment benefits by the artifice of staff recruitment via labour hire companies. The reported pressure on wage levels is of particular concern. Recent findings of the state Pay Equity Inquiry have established that library workers in New South Wales continue to experience serious pay disadvantage, despite the fact that work-value increases of the highest level have occurred. It is to be hoped that recent introduction of the new Pay Equity Principle will allow wage-fixing processes to address this disadvantage.
Against that background, anything which threatens to take wage levels in an opposite direction is strongly opposed. ALIA believes that any negotiated or formally registered condition of employment binding on an organisation in which a library worker undertakes work should be automatically available to that employee, regardless of whether the formal employment contract is with the organisation or the labour hire company.
In respect of OH&S and rehabilitation rights and responsibilities, ALIA believes it is imperative that employer obligations be clearly specified in law. This should be linked to legislative approaches to defining clearly whether the labour hire company or the host organisation is in fact the employer. In other than exceptional cases, it would be appropriate for the organisation in which work is undertaken to be specified as the employer at law.
Presentation: October 18 2000
Labour Hire Companies
New South Wales Government Taskforce Inquiry
The Australian Library and Information Association Ltd [ALIA]
Phil Teece adviser, industrial relations and employment
Summary
- ALIA does not object to employment agencies, per se. We have had co-operative relationships with several over many years.
- But members are concerned and fearful about the way that employers are now using labour hire companies.
- Deregulation of the labour market and the absence of regulation of labour hire companies have allowed some fundamental shifts to occur in our sector.
- We think some of them are undesirable. And we have very specific concerns for library and information workers.
- Basically, we say that members are being pushed into contracts that reduce benefits they would otherwise be entitled to.
- We say that many of these contracts are unfair in terms of the state's Industrial Relations Act.
- The Act's unfair contracts provisions are intended to protect employees in these circumstances. But individuals are, frankly, afraid to use them.
- We think that, currently, legislative intent is being frustrated.
- We believe that further action is necessary to give real effect to the philosophy and equity focus of the unfair contracts provisions.
- We think the Taskforce should recommend an enforceable Code of Conduct for labour hire companies.
- And we would like it to include specific clauses dealing with our particular concerns.
Issues
For a long time, employment agencies operated in our sector without significant controversy. Until the last couple of years, we received very few complaints about them.
That has changed suddenly. There are now far more cases where the hire company is taking over the role of employer. And more recently, labour hire companies seem to have been used to dispense with the employment relationship itself.
We don't believe this is in the public interest.
Members are now complaining about downward pressure on wages and forced contracts 'for services'.
We have examples of librarians taking up short term 'temporary employment contracts' and 'independent contractor assignments' at lower pay than they had received as employees from the same organisations for the same work at an earlier time.
Not surprisingly, members fear this trend will seriously erode overall standards for librarians.
Sometimes employment benefits decline because the librarian is regarded as an employee of the hire company, which then sets employment conditions below those prevailing in the host organisation.
Greater concern arises when the librarian is defined as an 'independent contractor', thus taking her outside coverage by normal employment conditions, such as superannuation, insurance and award/agreement conditions.
The typical vehicle for this is a 'Contractor Declaration' and a clause which reads as follows:
'I agree that the relationship between myself and [the labour hire company] will be that of independent contractor and principal, and I will not be deemed to be an employee for any purpose'.
It is quite obvious that the major objectives in both approaches are:
- to reduce wages and benefits payable to librarians hired this way when compared to those who are traditional employees, even if they work side by side on identical tasks.
- to enable employers to circumvent their obligations to employees, not just in regard to benefits, but also by enabling staff ['contractor'] services to be dispensed with quickly and arbitrarily - that is without any need for consultation, explanation or justification.
All this raises confusion about numerous general matters, which don't just affect librarians. Some of the obvious ones include:
- if the employee is not employed by the organisation in which she actually works, who is responsible for ensuring her conditions at the workplace are safe and proper?
- who has the right or obligation to direct her at work?
- who measures her performance? And how will it be measured?
- how does she activate natural justice rights, as far as awareness of 'anything held against her' is concerned?
These and related issues have been widely canvassed by others. I need not labour them now.
Except to say that, because so many are women working part time, often re-entering the workforce after a substantial period at home, librarians are particularly vulnerable.
And the fact that the library is often staffed by a part-time person alone, compounds that vulnerability.
More specifically, we have major concerns about the effects on librarians' pay. And especially about ramifications for progress toward pay equity.
For two or three years librarians worked hard to get a voice in the Government's pay equity considerations. When the formal Pay Equity Inquiry was announced they were encouraged by the Government's support of librarianship as a deserving case for attention.
When Justice Glynn announced in her findings that the work of librarians is severely undervalued in New South Wales, they were encouraged still further.
And when that judgement also found that pay disadvantage remained despite librarians having experienced 'work value increases of the highest order', they saw some real potential for improvement.
Librarians have waited patiently now for almost two years, while legislative changes and adoption of the new pay equity principle were finalised. That done, they now finally have a visible avenue to seek some concrete results from Justice Glynn's decision.
But if there is a wholesale shift to hire companies and 'contractor declarations' they fear all of that could be subverted. If more and more librarians are pushed into these non-standard arrangements via labour hire companies, wage levels established by pay equity cases can simply be bypassed. For many, they will be irrelevant.
Recently, Tasmania's Anti-discrimination commissioner, Jocelyn Scutt, in the 2000 Clare Burton Memorial Lecture made the point that there is a 'second prize principle of wage fixing' where women workers are concerned. When women finally win a point of principle, the goal posts are often moved so that they do not benefit from the supposed victory.
Employer ability to bypass outcomes of the Pay Equity judgement by circumventing a formal employment relationship via use of labour hire companies would provide a very good example.
Librarians would seem to have won an important victory. But it would be a Pyrrhic victory. It would have lasted, metaphorically, for five minutes. And it would have produced very little.
Many 'independent contractor' arrangements are effectively 'forced contracts'. Many of the librarians who feel compelled to forego their employee status by signing 'contractor declarations', do so because they can see no other way to obtain work.
Legally, the basic element of a contract of employment is the right of control by the employer. While not solely determinative, the absence of that control is the most important identifying characteristic of a genuine 'independent contractor' arrangement.
Leaving aside outworkers, it is hard to imagine an employee less able to 'control' her working arrangements than a part-time librarian returning to the workforce under these arrangements after several years at home with her kids.
Her contract is for labour alone. She works when she is told to. The organisation in which she works is in total control of her activities. And they can dispense with her by a phone call to the labour hire company.
Even if it could be shown that she is any form of contractor at all, under the terms of the Industrial Relations Act she could only be a 'dependent contractor'. And should therefore be deemed an employee.
She may know about the unfair contracts provisions in the New South Wales Act if somebody tells her about them. But she is reluctant to use them to challenge the labour hire company? 'How much work would I get in future if I challenged them?' she naturally asks herself.
So what we have is an 'independent contractor declaration' which would not stand up to basic scrutiny if it were challenged. The relationship's characteristics are obviously those of employer and employee. The whole scheme remains in place purely because individuals dare not risk challenging it.
We say that cannot be in the public interest.
Equally, when a librarian is supposedly employed by a hire company and then 'assigned' to a host enterprise, her work is usually subject to the control of the enterprise.
The labour hire company may purport to be the employer, but clearly the control test indicates otherwise. The real employment relationship is between the librarian and the enterprise.
This might not matter so much if it did not reduce the conditions which would otherwise apply. It is a device for withholding benefits an employee of the enterprise would be legally entitled to.
In other words, these are 'contracts avoiding the provisions of an industrial instrument' and therefore within the scope of the Act's unfair contracts provisions.
Again, only a reluctance to test this [for the obvious reasons indicated] allows the arrangement to remain in place.
Arguably, these contracts also breach Australia's obligations under the International Labour Organisation [ILO] Private Employment Agencies Convention of 1997 which includes at Article 7 [1]:
'private employment agencies shall not charge, directly or indirectly, in whole or in part, any fees or costs to workers'.
Effectively, the impact of the approach is to impose a cost on the worker, in the shape of diminished benefits.
Recommendations
The Taskforce should recommend to Government an enforceable Code of Conduct to regulate the operations of labour hire companies.
To address the specific concerns of ALIA members a Code should include:
- a clause dealing with 'independent contractor declarations'. It would remove the ability of hire companies to induce persons subject to labour-alone contracts to sign away their employee status. A form of words could be:
'[a] a person registered with, or assigned by, a labour hire company who works in an industry or enterprise under a contract for labour only, or substantially for labour only, shall be an employee;
[b] a labour hire company shall not require or induce persons described in [a] to enter into any arrangement which overrides their employee status'
- a clause to prevent contracts designed to circumvent awards or agreements and allow total remuneration that is less than would be received by an employee of the enterprise for the same work. A form of words could be:
'a person registered with, assigned by, or employed by, a labour hire company who works in an enterprise, shall be entitled to any employment term, condition or benefit to which an employee of the enterprise performing the work would be legally entitled'
- recognising continued confusion about occupational health and safety [OH&S] obligations, a clause to clarify the obligations of labour hire companies. Given that court cases continue to result in labour hire companies being fined for failing to meet their OH&S obligations, we would suggest that some of the requirements set out in those judgements be incorporated into the code of conduct. A form of words, based upon the judgement in the 1999 Drake Personnel case, could be:
The relationship created between a labour hire company and its employees is distinguishable on a number of grounds from that existing between traditional employers and their employees.
A labour hire company does not employ people to work for itself but to work for a client. It does not directly supervise, on a day to day basis, the tasks carried out by the employee and is not in control of the workplace where work is done.
These circumstances, however, do not obviate or diminish the obligation of the labour hire company under the Occupational Health and Safety Act to "ensure the health, safety and welfare at work" of all its employees. The labour hire company that sends its employees into another workplace over which they exercise limited control is, in fact, under a particular positive obligation to ensure that those premises, or the work done in them, do not present a threat to the health, safety or welfare of those employees.
The labour hire company shall not merely rely on the client to take steps to ensure safety in the workplace for all persons engaged at its premises. A labour hire company cannot escape liability because a client to whom an employee is hired is also under a duty to ensure that persons working at its workplace are not exposed to health and safety risks.
A labour hire company is required to take positive steps to ensure that the premises to which its employees are sent to work do not present risks to their health and safety.
The labour hire company's obligations under the Occupational Health and Safety Act may not be met by a term inserted in a contract between that company and a third party to the effect that persons hired out by the company will not be transferred to other work without prior notice to the labour hire company.
The labour hire company has a positive obligation to directly supervise and monitor the work of the employee to ensure a safe working environment.'
 |
|
