Dissenting report by Liberal and National Senators

Employment truths expose Labor’s lies

Labour hire engagement has held steady as a proportion of the workforce over the previous decade, hovering at around 1 per cent.1 This dispels Labor’s very first claim of the third interim report of ‘increased rates of casualisation and the utilisation of insecure labour hire workers and independent contractors’, with this baseless claim being pushed for partisan political purposes by the Australian Council of Trade Unions.
In stark contrast, the highest ever recorded rate for labour hire was 1.5 per cent, which occurred twice on Labor’s watch, in both 2008 and 2011.
For additional context, in Australia’s workforce of 13 million people, less than 115 000 employees Australia-wide are employed by a labour hire firm.
The proportion of independent contractors has remained broadly stable over the last decade at between 8 and 9 per cent. The all-time record high of 9.8 per cent also occurred under Labor in 2010.
The proportion of fixed-term contractors has remained steady at approximately 4 per cent since 2004, rising from 3.7 per cent to a peak of 4.2 per cent under Labor’s watch in 2011.
Labor and Greens Senators, at the bidding of their unions, promote an idea of ‘insecure work’ to replace the classical definitions of non-ongoing employment. This ‘same job, same pay’ campaign is misleading and serves only as a trojan horse for job-destroying policies that will lead to increased unemployment across all sectors and industries. Labor really stands for ‘no job, no pay’ unless you are one of their union mates.
Despite Labor having the hide to again call for a National Transport Tribunal to address the so-called ‘plague and pandemic of insecure work’, the Transport Workers Union advertised in 2021 for ‘food delivery union organisers’ in Sydney, a part-time (10–20 hours per week) fixed term contract for 3 months— thereby itself utilising the work arrangements it decries when used by other employers.
Labor and the unions use the term ‘insecure work’ to reference any type of work that is temporary or non-ongoing, which is normally work that unions have less control over. This goes to the heart of the issue—Labor's union mates will say or do anything to arrest the declining membership of unions in Australia, even if that means demonising the diverse forms of work that allow people to fit work around their life, rather than being forced to fit life around work.
It is important to understand that union membership has plunged from 40 per cent to just 14.3 per cent over the last 30 years, mainly as a result of Australian workers opting to have more flexibility and management over their own employment agreements. Australians are voting with their feet when it comes to the forms of work that suit them best.
Under the Coalition Government, more than 60 per cent of total jobs growth was in the form of full-time employment. More people are employed full-time now than before the onset of the COVID-19 pandemic.
It is important to understand, however, that as RBA Governor Philip Lowe described, ‘we should not think of part-time jobs as being bad jobs, and fulltime jobs as being good jobs’ because over 75 per cent of part-time workers are happy with current employment status and don’t desire to increase their workload.
The Westpac Melbourne Institute Unemployment Expectations Index measures concerns about losing employment over the next 12 months. Most recently released in November 2021, it showed an index of 95.3 which is the lowest (and therefore best) result since the mid-1990s. Australians, having seen the strong economic recovery supported by the Morrison Government’s policies, have confidence that the Australian economy delivers for them.

The Labor lie of ‘same job, same pay’

‘Same job, same pay’ is little more than a slogan, much less a workplace relations policy. Australians already know what employers think of this thought bubble, as they told the country before the 2019 election.
Worse still, many Australian employers are crying out for staff, meaning that to tie them up in red tape and make it harder to employ more people would actually threaten our economic recovery from COVID-19.
Innes Willox, CEO of Ai Group, said that the bill was ‘unfair and unworkable... It is all cost, all barriers... This policy takes us back to a 1960s-style nine-to-five workplace which is unsuitable for a 21st century economy’.
Andrew McKellar, CEO of ACCI, said that ‘This Bill means that labour hire employees won’t receive the pay rates they negotiated, but instead rates negotiated by other employers and employees they have never met. Labour hire employees will become the only employees in the country denied any role in negotiating their wages’, before also saying ‘the Federal Opposition’s plan to increase labour hire regulation risks undermining the competitiveness and flexibility of Australia’s workforce’.2
Steve Knott, CEO of AMMA, stated that Labor are ‘using unsubstantiated claims and baseless accusations to push for excessive regulation and disincentives to high-paid labour hire arrangements’.3
Last time Labor proposed to upset the enterprise agreement system with this policy, analysis by Deloitte Access Economics showed Labor’s ‘same job, same pay’ policy would cost 6400 jobs every year and $15.3 billion in lost economic activity.4

Labour hire registration in Australia

The committee has recommended the immediate introduction of a comprehensive national labour hire registration scheme covering all business sectors and requiring mandatory registration and continuous compliance with all legal obligations.
Labour hire is a crucial component of Australian employment across multiple critical sectors and allows employers to fulfil surge periods effectively while also providing flexible conditions preferred by employees.
The Migrant Workers’ Taskforce found that, while the labour hire industry plays an important role in facilitating key economic activity in Australia, a minority of unscrupulous labour hire providers take advantage of vulnerable workers.
Since the Migrant Workers’ Taskforce was handed down, some jurisdictions have introduced their own regulatory regimes. That is why the Australian Government is pursuing a national approach to labour hire regulation through the harmonisation of state and territory labour hire regulation schemes, thereby ensuring a nationally consistent approach in this area.
The national approach that the Government is committed to will reduce worker exploitation, improve accountability, provide greater transparency and drive behavioural change where appropriate, without causing major disruption or undue red tape burden on businesses.
Consultation on the approach is underway, with a report to state and territory industrial relations ministers on the opportunity for harmonisation due by 20 December 2021.
The Federal Government has resourced the Fair Work Ombudsman through the Budget for $16 million to administer the process.

Labour hire in the Australian economy

Mr Yannopoulos, Department of Finance, and Mr Hetherington, Australian Public Service Commission, stated, in response to how the Australian Government utilises labour hire:
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… 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.5
Public sector service demand is dynamic and therefore workload changes in due to that dynamism.
It is obviously entirely appropriate that government departments scale to meet the expectations of the community and fulfil the necessary tasks to serve the community accordingly.
When workload inevitably fluctuates, then the public sector must be flexible enough to meet increased demand of services. The additional employment provided by labour hire firms to meet surge demand is crucial in fulfilling these expectations.
Surge demand being handled with short-term and flexible employees is the best outcome for taxpayer funded services, and for those employees valuing the short-term flexible contracts.
Labour hire in the private sector largely fulfills the same requirements. In the same way that government agencies experience surge demand periods, private companies also deal with changing demand for services or skills in our dynamic economy.
Labour hire employees have the same rights and protections as all other employees when it comes to standards such as unfair dismissal, award entitlements, work health and safety protections, among others.
Important to note is that when Labor was in government, they created and implemented an employment framework which labour hire employees working under enterprise agreements will have rights and entitlements above the award minimum safety net. This framework remains in place today.
Under Labor’s Fair Work Act 2009 (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.
In the real world, the reality is that many worksites have more than one employer operating with employees who separately negotiate their pay and conditions. Consider an airport, a large construction project, a shopping centre, a mine site or large manufacturing facility—if Labor seriously propose to rip up 30 years of enterprise bargaining, where employers and employees directly negotiate to land pay and conditions that suit those particular cohorts, it is incumbent on them to disclose more than a slogan before the next election.
The partisan cherry-picking of evidence that has consistently undermined any shred of credibility for the entire Inquiry has continued unabated. During a hearing, 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.6
Mr Schmitcke (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.7
Whilst Mr Schmitcke advised the inquiry that Labor’s alterations to the current system would inevitably jeopardise the economic and employment safety of and in the sector, both for companies and employees, the inquiry reports thus far have overlooked such evidence:
Mr Schmitcke: [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.8
[That the industry was] forecast to grow and require approximately 300,000 extra workers over the next five years.9
The Coalition Government will always find ways to support growth in a sector or industry. Legislation that increases the barriers to entry, reduces employee flexibility, hurts worker pay, damages the ease of trade for businesses and obstructs operation in the sector would be an economic and social disaster.
Mr Schmitcke: 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.10
The Australian Mines and Metals Association (AMMA), who represent most employers across mining, oil and gas, and allied service sectors, stated that labour hire, independent contracting and casual employment are essential elements of their industry.
The arrangement to provide flexibility and opportunity to skilled workers is recognised as a strong positive of the industry, by all parties:
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.11
These arrangements are especially useful for attracting skilled workers for short-term work in the more cyclical, project-based areas of the industry.

Employment within Australia’s resource sector

The resources sector remains a highly desirable industry for hundreds of thousands of Australians, with higher than average wages and opportunities for employees, particularly in regional Australia. Median weekly earnings for mining workers are more than double the median for all industries.12
Given the sheer number of recommendations that relate to the resource sector, it is necessary to balance the record to reflect the nature of the evidence taken by the committee.
At the outset, the interim report seeks to give credence to the notion that FIFO/DIDO and labour hire are increasingly prevalent in the sector by citing an academic report that was commissioned by the CFMMEU. The impartiality of such evidence is therefore in doubt, especially in light of this exchange:
Senator SMALL: ...what does 'commissioned by the CFMEU' mean? Did they resource the study or did they just ask for it? How does it work?
Dr Whelan : ... To be honest I was paid to prepare the report. In terms of the information that I was provided with and that was used in the production of the report, some of it was provided by the CFMEU, as has been disclosed in the report.13
This same academic report is then extensively cited through the interim report, along with a number of quotes from the CFMMEU—the very same union that paid the academic in question to write the report.
Government Senators will not be lectured by the Australian Labor Party or their union mates, especially when they failed to support key, job-creating resources projects such as Adani at both the state and federal level and have failed to rule out a power-sharing arrangement with the Australian Greens after the next election.
An appropriate use of labour hire and casual workers is key for the resources sector to balance the needs of its workforce demands across its project lifecycle and operations.
According to the latest ABS data in August 2020, casual and permanent employees in the mining industry had similar median weekly earnings. $2321.20 for casual employees compared to $2358.10 for permanent employees.
However, on average employees paid by a labour hire firm or employment agency in the mining industry had a median weekly earnings of $2643.80, around $300 or 13 per cent higher than both casual and permanent employees.
Last time Labor proposed to upset the enterprise agreement system, analysis by Deloitte Access Economics showed Labor’s ‘same job, same pay’ policy would cost 6400 jobs every year and $15.3 billion in lost economic activity.
With such a track record, anyone of the more than 256 000 Australians who work in the resources sector should recognise that the greatest threat to their job security is a Labor/Greens Government.

Keeping tough cops on the beat

The current right of entry laws strike the right balance between the rights of registered employee organisations to represent workers and for employers to run their business. There have been several changes to right of entry laws since the Fair Work Act commenced in 2009 and Government Senators remain concerned that any proposals to expand laws to give unions greater access risk a return to the bad old days.
This is all the more prescient given the stated policy intention of the Labor Party to disband the Australian Building and Construction Commission (ABCC) and the Registered Organisations Commission (ROC) in the event that they form government. In essence, they want to take the cops off the beat and replace them with union thugs—the proposition should terrify every Australian business.
The Government has already made clear it has zero tolerance for any exploitation of workers and has given more evidence gathering powers and committed over $160 million in new funding to the Fair Work Ombudsman, as well as increasing penalties for lawbreaking employers by up to ten-fold.

Safety and employment

Labor and Greens Senators claim that the Government should investigate whether labour hire workers are more reluctant to raise safety concerns due to fears of reprisal from their employer, and selectively presented evidence from a separate inquiry focused on a single worksite along with unsubstantiated claims from union leaders.
Despite having called Safe Work Australia before the committee, and having taken evidence that points to there being no significant difference in serious injury rates between differing types of employment, the committee has chosen to make pre-emptive recommendations:
… we have the work-related traumatic injury fatality data. This reports on all work-related deaths, so, again, it covers the full scope of employment arrangements. It doesn't cover workers who died due to medical intervention or natural causes, so there are some exclusions, but broadly it covers the full scope of employment engagement arrangements. What we know, for example, is the data from the survey I talked about, which does cover the totality of employment arrangements, doesn't really show a big difference. For example, for employees with paid leave entitlements, the proportion of workers who did not experience a work-related injury or illness in the previous 12 months was 95.5 per cent. When it comes to employees without paid leave entitlements it was 96.4 per cent. So, it doesn't vary too much when you look at the aggregate level.14

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