The Senate Education and Employment References Committee Corporate avoidance of the Fair Work Act 2009 September 2017 © Commonwealth of Australia 2017 ISBN: 978-1-76010-633-1 This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License. The details of this licence are available on the Creative Commons website: http://creativecommons.org/licenses/by-nc-nd/3.0/au/. This document was produced by the Senate Standing Committee on Education and Employment and printed by the Senate Printing Unit, Parliament House, Canberra. ii Membership of the Committee Members Senator Gavin Marshall, Chair, ALP, VIC Senator Linda Reynolds CSC, Deputy Chair, LP, WA (from 17 August 2017) Senator Catryna Bilyk, ALP, TAS (from 22 November 2016) Senator the Hon Jacinta Collins, ALP, VIC Senator Sarah Hanson-Young, AG, SA Senator James Paterson, LP, VIC Former members Senator Bridget McKenzie, Deputy Chair, NATS, VIC (from 13 October 2016 to 17 August 2017) Senator Deborah O'Neill, ALP, NSW (from 13 October 2016 to 8 November 2016) Senator Kimberly Kitching, ALP, VIC (from 8 November 2016 to 22 November 2016) Substitute members Senator Lee Rhiannon, AG, NSW (for Senator Sarah Hanson-Young) Participating members Senator Chris Ketter, ALP, QLD Senator Louise Pratt, ALP, WA Senator Glenn Sterle, ALP, WA Senator Murray Watt, ALP, QLD Secretariat Mr Stephen Palethorpe, Secretary Ms Natasha Rusjakovski, Principal Research Officer Ms Kate Campbell, Senior Research Officer iii Mr Matthew Hughes, Research Officer Ms Amy Walters, Research Officer Ms Jade Monaghan, Administrative Officer Mr Abe Williamson, Administrative Officer Committee web page: www.aph.gov.au/Parliamentary_Business/Committees/Senate/Education_and_Employment PO Box 6100 Ph: 02 6277 3521 Parliament House Fax: 02 6277 5706 Canberra ACT 2600 E-mail: [email protected] iv Table of Contents Table of Contents ................................................................................................ v Membership of the Committee ........................................................................ iii Recommendations .............................................................................................. ix Chapter 1.............................................................................................................. 1 Conduct of the inquiry ............................................................................................ 2 Structure of the report ............................................................................................. 2 Note on references .................................................................................................. 4 Acknowledgement .................................................................................................. 4 Chapter 2.............................................................................................................. 5 Fair work ................................................................................................................... 5 Australia's Fair Work system ................................................................................. 5 Coverage of the system .......................................................................................... 5 Key features of the Fair Work system .................................................................... 6 The Fair Work Commission ................................................................................... 9 The Fair Work Ombudsman ................................................................................. 10 Is the Fair Work system fit for purpose? .............................................................. 12 Chapter 3............................................................................................................ 13 Employers undermining collective bargaining .................................................... 13 Small cohorts of workers signing agreements ...................................................... 14 Committee view .................................................................................................... 20 Use of subsidiaries for agreement approval ......................................................... 21 Casual employees ................................................................................................. 23 Equal work for equal pay ..................................................................................... 24 Workers residing overseas .................................................................................... 24 When negotiations reach impasse ........................................................................ 25 Chapter 4............................................................................................................ 27 Saving the silver: termination of enterprise agreements .................................... 27 Agreement termination under the FWA ............................................................... 27 Agreement termination as economic coercion ..................................................... 29 Griffin Coal, Collie ............................................................................................... 30 Parmalat ................................................................................................................ 36 Esso Australia ....................................................................................................... 38 Does agreement termination constitute avoidance of the FWA? ......................... 39 Committee view .................................................................................................... 41 Chapter 5............................................................................................................ 43 Labour hire ............................................................................................................. 43 The growth of labour hire ..................................................................................... 43 Disposable workers .............................................................................................. 45 Carlton & United Breweries ................................................................................. 48 CUB55 in their own words ................................................................................... 51 Oxford Cold Storage ............................................................................................. 53 Industry perspectives ............................................................................................ 54 Committee view .................................................................................................... 56 Chapter 6............................................................................................................ 59 Wage theft ............................................................................................................... 59 A freefall to the bottom ........................................................................................ 59 The prevalence of underpayment ......................................................................... 59 From the workers' perspective .............................................................................. 61 Underpayment of temporary migrant workers ..................................................... 64 International students ............................................................................................ 67 Committee view .................................................................................................... 69 Penalties for non-compliance ............................................................................... 70 Committee view .................................................................................................... 71 vi Chapter 7............................................................................................................ 75 Sham contracting .................................................................................................... 75 The effect on workers ........................................................................................... 75 Inadequacies in the legislation.............................................................................. 78 Committee view .................................................................................................... 80 Taxation incentives ............................................................................................... 81 Committee view .................................................................................................... 82 Chapter 8............................................................................................................ 85 The gig economy: hyper flexibility or sham contracting? .................................. 85 The rise of the gig economy ................................................................................. 85 Who is the employer? ........................................................................................... 86 Deliveroo .............................................................................................................. 90 Airtasker ............................................................................................................... 95 Disruptive employment ...................................................................................... 102 The way forward ................................................................................................