Victorian Inquiry Into the Labour Hire Industry and Insecure Work Final

Victorian Inquiry into the Labour Hire Industry and Insecure Work Final Report 31 August 2016 Notice This report is published in accordance with section 109 of the Inquiries Act 2014 (Vic). This document is also available in PDF and accessible Word format at www.economicdevelopment.vic.gov.au/labourhireinquiry or contact Industrial Relations Victoria at the address below. If you would like to obtain this publication in another accessible format, such as large print or audio, contact Industrial Relations Victoria at the address below. Industrial Relations Victoria Department of Economic Development, Jobs, Transport & Resources 121 Exhibition Street, Melbourne Victoria 3000 © Copyright State of Victoria 2016 Ordered to be published VICTORIAN GOVERNMENT PRINTER October 2016 PP 229, Session 2014–16 Print managed by Finsbury Green The Hon. Daniel Andrews, MP Premier Department of Premier and Cabinet 1 Treasury Place EAST MELBOURNE VIC 3000 The Hon. Natalie Hutchins, MP Minister for Industrial Relations Department of Economic Development 1 Spring Street MELBOURNE VIC 3000 Dear Premier and Minister Hutchins Victorian Inquiry into the Labour Hire Industry and Insecure Work Pursuant to the Establishing Instrument for the Inquiry, and section 107 of the Inquiries Act 2014 (the Act), I now provide the Final Report of the Victorian Inquiry into the Labour Hire Industry and Insecure Work, dated 31 August 2016. The Report contains the evidence presented to the Inquiry, and the Inquiry’s findings and recommendations to address the issues set out in the Terms of Reference. The Report also includes a number of adverse findings. Under the Act I understand that the Government has discretion to table a report of a Formal Review in Parliament. In this regard, I note that the parliamentary protections for any publication of the Report and its contents are enlivened by tabling of the Report in Parliament, in accordance with the process set out in section 109 of the Act. Thank you for giving me the opportunity to conduct this important Inquiry. Yours faithfully Professor Anthony Forsyth Chairperson 31 August 2016 Contents List of figures 8 List of abbreviations 10 Chairperson’s foreword 14 Summary of findings and recommendations 16 Chapter 2 17 Chapter 3 18 Chapter 4 22 Chapter 5 25 Chapter 6 29 Chapter 7 30 Chapter 8 31 Chapter 9 34 1. Introductory matters 37 1.1 Terms of Reference 37 1.2 Conduct and procedures of the Inquiry 39 1.3 Engagement with the Victorian community 40 1.3.1 Inquiry website 40 1.3.2 Background paper 40 1.3.3 Direct stakeholder contact 40 1.3.4 Advertising and media 40 1.4 Submissions 41 1.5 Hearings 42 1.6 Informal consultations 43 1.7 Direct requests for information 43 1.8 Other sources of information relevant to the Inquiry 43 PART I – LABOUR HIRE 46 2. The labour hire industry 47 2.1 What is labour hire? 48 2.1.1 Introduction 48 2.1.2 Academic studies regarding the growth of labour hire in Australia 49 2.1.3 Inquiry evidence 52 2.2 Extent of labour hire in Victoria 55 2 Victorian Inquiry into the Labour Hire Industry and Insecure Work 2.2.1 Data 55 2.2.2 Inquiry evidence 66 2.2.3 Conclusions 67 2.3 Reasons for the use of labour hire 68 2.3.1 Data and academic studies 68 2.3.2 Inquiry evidence 71 2.4 Impacts of labour hire 75 2.4.1 Benefits for business 75 2.4.2 Impacts for workers 76 2.4.3 Impacts on the community and economy 80 2.5 Conclusions, findings and recommendations – the labour hire industry 81 3. Labour hire employment arrangements within the current 83 regulatory framework 3.1 Introduction 88 3.2 Minimum terms and conditions of engagement for labour hire workers 89 3.2.1 Mode of engagement of labour hire employees in Victoria 89 3.2.2 Statutory minimum standards 90 3.2.3 Modern awards 94 3.2.4 Contractual provisions applying to labour hire workers 96 3.2.5 Conclusions and findings – minimum terms and conditions for labour hire workers 97 3.3 Enterprise bargaining and the application of enterprise agreements to labour hire 98 employees in Victoria 3.3.1 Introduction 98 3.3.2 Inquiry evidence regarding the application of host enterprise agreement terms 99 and conditions to labour hire employees 3.3.3 Legal framework for application of host’s enterprise agreement to labour hire 102 employees 3.3.4 Parity clauses 103 3.3.5 Transfer of business 106 3.3.6 Findings and recommendations – enterprise bargaining and the application 106 of enterprise agreements 3.3.7 Parity of terms and conditions for casual relief teachers 107 3.4 Protections from unfair or discriminatory treatment 109 3.4.1 Inquiry evidence about job security 109 3.4.2 Unfair dismissal 111 3 3.4.3 Protections from discrimination and unfair treatment 116 3.5 Labour hire and workplace health and safety 124 3.5.1 Occupational health and safety obligations 124 3.5.2 Complaining about safety and reporting injuries 136 3.5.3 Workplace injuries and return to work 141 4. Evidence of non-compliant labour hire practices 147 4.1 Introduction 149 4.2 Industries most affected by non-compliance 152 4.2.1 Horticulture 152 4.2.2 Meat industry 160 4.2.3 Contract cleaning Industry 174 4.2.4 Non compliance by labour hire agencies 177 4.3 Accommodation 178 4.3.1 Labour hire and substandard, exploitative accommodation arrangements 178 4.3.2 Business models designed to avoid accommodation regulation 181 4.3.3 Regulatory framework for labour hire accommodation 186 4.4 The role of piece rates 190 4.5 Compliance activities relating to labour hire agencies 193 5. Labour hire licensing and other regulatory responses 198 5.1 International regulation of labour hire 203 5.2 Regulation of labour hire in other countries 204 5.2.1 United Kingdom 206 5.2.2 Canada 216 5.2.3 Other approaches 217 5.2.4 Comparing Australia’s approach 220 5.3 Regulation of labour hire in other Australian states 221 5.3.1 Australian Capital Territory 222 5.3.2 Queensland 224 5.3.3 South Australia 227 5.3.4 Other states 228 5.3.5 Conclusion 229 5.4 Recent proposals for labour hire regulatory reform 229 5.4.1 Federal parliamentary inquiries 229 4 Victorian Inquiry into the Labour Hire Industry and Insecure Work 5.4.2 Major parties’ policies for the 2016 election 231 5.4.3 Historical proposals for reform 231 5.5 Should the Inquiry recommend regulatory reform? 232 5.5.1 Participants opposing regulation 232 5.5.2 Some proposals for regulation of labour hire received by the Inquiry 233 5.5.3 Does Victoria have the capacity to implement a licensing scheme? 239 5.6 A labour hire licensing scheme for Victoria 244 5.6.1 Participants’ support for a licensing scheme 244 5.6.2 Participants’ opposition to a licensing scheme 247 5.6.3 Submissions about the potential features of a licensing scheme 248 5.6.4 Conclusions, findings and recommendations – labour hire licensing 253 PART II – INSECURE WORK, VULNERABLE WORKERS AND THE ROLE 261 OF BUSINESS STRUCTURES AND PRACTICES 6. Insecure work 262 6.1 Framing the concept of insecure work 263 6.1.1 Views of Inquiry participants 263 6.1.2 Academic and other studies conceptualising insecure work 266 6.2 Prevalence and nature of alternative employment forms 270 6.2.1 General 270 6.2.2 Casual employment 273 6.2.3 Fixed term employment 282 6.2.4 Underemployment or variability of hours 288 6.2.5 Conclusions and findings – insecure work 289 7. Vulnerable workers 290 7.1 Introduction 291 7.2 Temporary migrant workers 293 7.2.1 Academic studies on temporary migrant work 294 7.2.2 Temporary visas for the express primary purpose of work 295 7.2.3 Temporary visas with primary purposes other than work 305 7.2.4 Conclusions and recommendations – temporary migrant workers 315 7.3 The gendered nature of insecure work 319 7.3.1 Data and literature 319 7.3.2 Inquiry evidence 321 5 7.3.3 Finding 323 8. Business structures and practices 324 8.1 Introduction 327 8.2 Independent contracting 330 8.2.1 Legal framework 330 8.2.2 Prevalence of independent contracting 333 8.2.3 Prevalence of sham contracting 335 8.2.4 Inquiry evidence 337 Case study – professional contractors 339 Case study – transport contractors 340 Case study – construction 342 8.2.5 Proposals to regulate independent contractors 344 8.2.6 Findings and recommendations – independent contractors 345 8.3 Other business structures and practices 347 8.3.1 Labour supply chains and contracting 347 8.3.2 Franchising 349 8.3.3 Phoenix activity 353 8.4 Regulatory and other responses 355 8.4.1 Participants’ proposals for regulatory reform 355 8.4.2 Examples of supply chain regulation 356 8.4.3 FWO activity in regulating supply chains 361 8.4.4 The role of supply chain price pressure 363 9. Addressing the impact of insecure work in Victoria 366 9.1 Impact of insecure work 369 9.1.1 General 369 9.1.2 Financial security 370 9.1.3 Working hours 371 9.1.4 Pathway to permanency 372 9.1.5 Inability to commit to family activities, social activities or study 372 9.1.6 Workplace participation/voice 373 9.1.7 Health and wellbeing 374 9.1.8 Job satisfaction 376 9.1.9 Other factors 378 6 Victorian Inquiry into the Labour Hire Industry and Insecure Work 9.2 Findings, proposals, and recommendations for addressing insecure work 379 9.2.1 Introduction 379 9.2.2 The Victorian Government’s role as an employer 380 9.2.3 Victorian Government procurement 384 9.2.4 Promoting ‘best practice’ 388 Attachment A – Inquiry media coverage 391 Attachment B – List of submissions 394 Attachment C – Practice Direction No 1 396 Attachment D – List of hearing participants 398 Attachment E – List of academic forum participants 400 Attachment F – List of informal consultations 401

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