At the outset, it must be noted that this second interim report is being tabled in the context of Australian unemployment at 4.6 per cent, which in a single statistic, exposes the Labor lie that job insecurity is an issue in this nation. Businesses across the nation are crying out for workers as the economy recovers, and the Government is determined to continue with policies that allow more Australians into work.
Conduct of the Inquiry
This Senate Select Committee for Job Security gave the senators on the inquiry a chance to investigate possible reform to the employment arrangements in those Australian industries and sectors that have been disrupted by dynamic technological and economic forces, or the COVID-19 pandemic.
Liberal and National Senators are of the view that successful reform delivers positive outcomes for both individuals and businesses—lifting productivity and efficiency, while increasing the opportunity for more Australians to benefit from the dignity of work with flexibility working to mutual advantage.
After the publication of the first interim report, conducting further hearings in Queensland and Western Australia as well as remotely provided the committee members from Labor Party and the Greens with the opportunity to rectify the brazen politicking that sadly eliminated any positive potential from the previous hearings (and first interim report).
As Liberal and National Senators noted in the first dissenting report, the inquiry has thus far been little more than a staged political farce by Labor and the Greens with two objectives; developing a predetermined narrative to discredit the success of the Morrison Government's broad management of workplace relations and simultaneously campaigning for big government control of Australians in the workplace.
Liberal and National Senators continue to hope in vain for a more open and enquiring approach from Labor and Greens Senators in their investigations of the dynamic, evolving transformation of Australian industries and economies. There is a real opportunity to seek honest and helpful ideas from genuine witnesses from a broad range of businesses and workers. A consensus on positive reforms would have opened the door to meaningful change to deliver better outcomes for workers and businesses across the country.
Unfortunately, the Labor and Greens Senators continued to engage from a hostile, predetermined ideological position, using many witnesses in a dishonest way to simply cherry-pick the data and accounts that supported their negative narrative whilst being dismissive of any alternative view.
This type of negative politicking to build a political campaign for the upcoming Federal Election is extremely dangerous for Australian business, and reminds the Australian public at large of the existential danger that the Labor Party and the Greens pose to Australian businesses and workers.
Accordingly, Liberal and National Senators can't support an extension of this inquiry, simply by virtue of the debased politicking.
Below, Liberal and National Senators have sought to call out the worst of Labor's overreach into the lives of Australians whilst offering ideas that are beneficial and practical, striking a better balance between employees and employers without sabotaging industry security and our national prosperity.
In keeping with this, the Australian Chamber of Commerce and Industry (ACCI) stated on 11 August 2021 that:
The single most important priority to improve job security across our community should be to do everything we can to reopen, get back to work, provide certainty and predictability to the greatest extent possible and support businesses staying in business and keeping people in work.
If the Committee genuinely wants to tackle job insecurity its recommendations should focus on getting Australia open and back to work.
One of the worst things policymakers could do at this time would be to narrow avenues for Australians to work, complicate or add extra costs to restarting and re-employment or compromise recovery through reducing options for flexibility and adaptability when many businesses will clearly face a prolonged period of uncertainty and unpredictability, even after we reopen.
We emphasise in particular that effective access to casual work will never be more important for young Australians at greatest risk of sustained damage to their careers and earnings arising from the impact of the pandemic on their labour market entry. We urge the Committee to not recommend any measures or changes of policy which would have the effect of seeing fewer young Australians having opportunities to work, gain experience, gain referees etc.
During this second phase of the inquiry, no less than 16 unions appeared over five days of hearings, dominating the witness representation. The same unions have appeared multiple times over the inquiry thus far.
It is also important to note than many think tanks or other purportedly independent organisations are heavily influenced by or receive funding and support from various unions, further confirming the biased nature of the hearings.
For example, consider the Western Australian Council of Social Service (WACOSS) which appeared on 26 July 2021. Although the organisation might be presented as independent and unbiased, its Director of Policy, Mr Chris Twomey, previously held the role of Senior Policy Advisor for the Australian Greens until 2011. When WACOSS was challenged on its claims of rising insecurity in work, in the face of Australian Bureau of Statistic (ABS) data showing casual employment at approximately 25 per cent of the workforce for at least two decades, WACOSS simply dismisses the empirical data:
The issue there is that there's really a lack of comprehensive and accurate data that captures all of the dimensions of precarious work.
Unfair assessments by organisations or unfounded claims were repeated ad nauseam by the biased witnesses that were called one after another. The Youth Affairs Council of Western Australia and the Australian Youth Affairs Coalition just ignored the data submitted to the committee by Uber in its survey of all Australian workers using the platform, which attracted more than 18 000 responses. When challenged on the survey data which directly contradicted his claims, Mr Rycken of the Australian Youth Affairs Coalition dismissively replied with:
Unfortunately, there is no journal of Uber, so I wouldn't be placing too much faith in a study, or any survey, conducted by one single organisation where they have a significant vested interest.
Simply dismissing the data by saying it is a 'significant vested interest' by Uber is unfair and dishonest. The 18 000 individual, autonomous respondents that provided the data cannot be ignored—those are the voices of hard-working Australians that Liberal and National Senators won't ignore.
Further misrepresentation of the Uber platform as a single example casts more doubt over the hyperbolic claims made by the Youth Affairs Council of Western Australia and Australian Youth Affairs Coalition.
Mr Bruce-Truglio of the Youth Affairs Council of Western Australia stated:
If you are working for Uber or a job where your shifts can be cancelled without notice and then you can't pay the bills that week.
It is very clear from Uber's prior testimony, and indeed arguably common knowledge, that Uber does not operate with a shift model. Instead, along with many other gig economy players, it allows users unprecedented flexibility to fit work around their lives, rather than be forced to fit their lives around work. This sort of disingenuous testimony typifies the partisan interests that Labor and the Greens continue to call before the Inquiry.
Labour hire—the real story
Labour hire as a proportion of all employees has been stable at less than 2 per cent over the last decade. Of the nearly 13 million employed Australians, less than 115 000 were employees paid by a labour hire firm—that is only 1.1 per cent of all employees. The all-time record high for labour hire was 1.5 per cent recorded under Labor in both 2008 and 2011.
The Government recognises labour hire is an important source of employment for those looking for work, and an important source of labour for employers. This is particularly the case in those industries that experience surge demand periods, like administrative support services for example. Indeed, this is reflected in the Government's own approach to use of labour hire—Mr Yannopoulos from the Department of Finance and Mr Hetherington from the Australian Public Service Commission stated:
Mr Yannopoulos: I guess in generic terms that it's generally where agencies need to surge to meet immediate priorities. In the past that was particularly for agencies like Services Australia—which I think was called human services then—particularly in dealing with the phone call volumes, or for the tax office through its processes, particularly around tax time and the lodgement peak that I think we're in around now. And I know the Department of Veterans' Affairs is trying to get a handle on their claims-processing times and get them down. But I think the general approach to use of labour hire is to supplement a workforce for surge or terminating activities, where it's not going to be an ongoing program of government.
Mr Hetherington: I will just add to that. I support the comments that Mr Yannopoulos made there. The other area is where we need a particular skill set for a short period of time and where we know that we don't have an enduring basis upon which to bring them in on an ongoing basis. That might be another area where we would seek to use a contracted solution but, generally, the points that Mr Yannopoulos made are what we see.
Mr Hetherington: That's right. We think that there will be an ongoing need for contracted support for those reasons and that it's entirely appropriate. As I said, agency heads will make those decisions based on the business outcomes they need to achieve in their particular circumstances.
Clearly, public sector service demand fluctuates and so workload changes accordingly. It is highly appropriate for that additional employment to meet that surge demand. This is crucial in delivering the necessary services to the Australian public at the standard expected.
Surge demand being managed with temporary, flexible employees is the best outcome for efficiency of taxpayer funded services, for those employees valuing the dynamic and flexible contracts. The same logic applies to use of labour hire in the private sector.
Labour hire employees have the same rights and protections as all other employees when it comes to, for instance, unfair dismissal rights, award entitlements, general protections and work health and safety protections to name but a few. Labour hire employees working under enterprise agreements will also already have rights and entitlements above the award minimum safety net. This is the framework that the Labor Party created when in government.
In the real world, at many workplaces, more than one employer operates. At a manufacturing site, an airport, a large construction project, a shopping centre, an entertainment venue or a mine site—businesses are regularly engaged to provide contract services of one type or another, side by side at a worksite.
Under Labor's Fair Work Act, the wages and conditions payable to employees are determined by the relevant industrial instrument—either the enterprise agreement made by the employer with its employees, or the relevant award, or arrangements made with employees in excess of the award.
There is no requirement under Labor's Fair Work Act for enterprise agreements to provide for a particular level of pay above the safety net—only that every employee is better off under the agreement compared to the relevant award. That means that employees are regularly working in conjunction with employees of different employers and that their pay and conditions differ.
Indeed, the entire concept of enterprise bargaining is premised on different outcomes developed being jointly agreed by employers and employees in each business, depending on the circumstances and priorities of those individuals.
If Labor seriously proposes to upset the essence of enterprise bargaining and impose conditions on the content of enterprise agreements, it is incumbent on it to specify how that would work and why it is appropriate to depart from the enterprise bargaining system that underpinned three decades of economic prosperity.
When Labor and the unions use their slogan 'insecure work', they do so to characterise any form of work that is not ongoing or permanent—incidentally forms of work the unions have less control over.
What Labor and the Greens won't admit is that the rate of non-permanent employment—including people who choose casual employment, independent contracting, labour hire and fixed-term contracting—remained stable for at least a decade before COVID-19.
As more Australians have opted for forms of work that suit them best, union membership has plummeted from 40 per cent in 1992 to just 14.3 per cent in August 2020.
Casual employment—the precarious truth
The rate of casual employees has remained stable at around 25 per cent for more than two decades leading into the pandemic.
Casual employment was recorded at 22.5 per cent in August 2021, which is lower than it was before COVID hit (24.1 per cent) and lower than in 1996 under Paul Keating when it was 24.4 per cent.
In fact, the greatest increase in casual employment on record took place between 1988 and 1996, under the Hawke and Keating Labor governments, from 18.2 per cent to 24.4 per cent.
Full-time employment accounted for over 60 per cent of total jobs growth since the Coalition came to government. In fact, there are now around 1 million more people in full-time jobs than in 2013, and more people in full-time jobs now than before COVID-19. As positive as that is, RBA Governor Philip Lowe has remarked that 'we should not think of part-time jobs as being bad jobs, and full-time jobs as being good jobs', because ABS data suggests that more than three quarters of part time employees are content not working any additional hours.
Due to the Coalition's sound economic management during the health crisis that COVID-19 has presented, unemployment is at 4.6 per cent and lower than when the Coalition took office in 2013.
As Australia's economy recovers from the COVID-19 pandemic, employers and employees need the certainty and confidence that comes with growing businesses creating jobs.
The Coalition Government passed landmark reforms in early 2021 to give casual workers greater opportunity to convert to permanent work, and save small and large businesses from a potentially devastating $39 billion 'double dipping' loophole.
These changes provided certainty to both Australian workers and businesses whilst also providing stronger rights for casual employees, protecting jobs into the future and driving growth as we move out of the pandemic.
Labor like to demonise casual work when in fact, it is a worthy employment arrangement that allows thousands of Australians to balance work with other activities, including caring responsibilities, transitioning to retirement, and full-time study.
This demonisation of non-permanent work even extended to blatantly misrepresenting the ABCC's investigation of wage theft in the construction sector. Senator Sheldon remarked that:
… the ABCC conducted an investigation, as I mentioned, of the labour hire sector and in 2020 published a report revealing that 79 per cent of labour hire companies in construction are breaking the law … So we have 79 per cent of labour hire companies breaking the law, most of them stealing from their workers, in the case of wage theft, and the ABCC does not seem to have taken a single fine against a single one of them.
Mr Schmitcke, from the Master Builders of Australia, corrected the record on this misleading claim by providing important context:
I do recall that the ABCC go on to mention that, of that 79 per cent where they find that there was noncompliance, the nature of the noncompliance was either (a) inadvertent or (b) of a minor nature—for example, not necessarily providing pay slips or those types of matters. So I think that that needs to be put in a little bit of context … Secondly, I think they also go on to say that, where these issues were discovered, they largely were minor and inadvertent and, as soon as they were discovered, they were rectified straightaway. Any moneys that hadn't been paid or any pay slips that hadn't been provided—all that was rectified, and the ABCC assisted in overseeing that.
Mr Schmitke went on to outline daily hire as being a positive and critical factor to the success of the Australian construction industry, emphasising that changes to this system would very likely jeopardise the safety of the sector, both for companies and workers.
Daily hire: … enables employees to be engaged and receive all the conventional conditions and benefits of permanent employment, but with a higher hourly rate in exchange for allowing both parties flexibility with conventional notice periods.
Mr Schmitke went on to say that the industry was: 'forecast to grow and require approximately 300 000 extra workers over the next five years'.
This type of growth in a sector must be supported. Legislation that increases the barriers to entry, reduces employee flexibility, hurts worker pay, damages the ease of trade for businesses and overall hinders the ability to operate in the sector efficiently would be an economic and social catastrophe. Mr Schmitke warned that:
… we cannot understate how important it is to not conflate/confuse any issues associated with 'precarious' or 'insecure' work with independent contracting as it is used in, and underpins, building and construction … This disregards employee behaviour and forgets the very real circumstance within building and construction that employees may consider there to be an advantage to being a contractor and seek to be engaged as such. Master Builders' members report a high level of circumstances in which 'workers' demand to be engaged as a contractor and refuse offers of engagement on any other basis.
The Australian Mines and Metals Association (AMMA), who represent the majority of employers across Australia's mining, oil and gas, and allied service sectors, stated that labour hire, independent contracting and casual employment are essential elements of their industry, alongside many lucrative full-time positions.
This diversity of employment arrangement is supported by resources workers, even preferred by some, in large part because:
In the contracting supply chain, highly skilled employees often take well-paid fixed-term or casual contracts where their capabilities are in greatest demand and command the highest hourly rates.
This system is seen as the best option for a wide array of workers. These arrangements are especially useful for engaging skilled workers for short-term work in the more cyclical, project-based areas of the industry.
Risks of overreaction
Dr Katherine Ravenswood from Auckland University of Technology appeared before the inquiry in the capacity of her expertise in aged care employment regulation. She stated that in New Zealand:
… despite regulation in the last few years introduced to ostensibly address pay inequity and irregular hours, care and support workers in aged care still experience job insecurity… We've had quite substantial changes to the minimum wage. In aged care and particularly home and community support, there are still large problems with irregular weekly hours. There are fluctuating weekly rosters, which of course mean that there's financial instability. There's a lot of underemployment. People have a low number of weekly hours… and some of this has potentially worsened after the introduction of the care and support workers act.
Dr Ravenswood published an article, 'Historic pay equity settlement for NZ care workers delivers mixed results', from 2019 and wrote:
Some care and support workers have ended up worse off than before the pay equity settlement. Perhaps in order to make limited funding last the mile, their managers have reduced their hours and made it harder for these workers to maintain the guaranteed hours they are legally entitled to. Some of the care and support workers in home and community care, who were paid the top hourly rate because of their qualifications or experience, had their hours almost halved after the settlement. Because of this some are now struggling to pay mortgages and in some cases have resorted to finding second jobs to make ends meet.
It would seem that the New Zealand approach of regulation and big government intervention has had serious and negative outcomes for the workers it is ostensibly meant to assist. This is the clear risk of ill-considered intervention in Australian workplace relations, no matter whether with the best of intention.
Senator the Hon Matthew Canavan
Nationals Senator for Queensland
Senator Ben Small
Liberal Senator for Western Australia