Labour hire (Australia)

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In Australia, labour hire is referred to by the legal term of art labour hire arrangement, and refers to the employment practice of an employer supplying its employees to another workplace, for profit. [1] [2]

Contents

Labour hire arrangements often overlap with, but are distinct from the practice of temporary staffing. Labour hire arrangements are situations in which an employee has a legal employer, but no direct employment contract with their place of work. [3]

Companies that provide labour hire are often referred to as 'recruitment agencies' however, labour hire arrangements do not involve an agency relationship with an employee or the worksite in a legal sense. The labour hire company is paid for services provided to the worksite by the employee, they are not paid as an agent for the cost of recruitment per se.

The labour hire arrangement can be contrasted with other recruitment business dealings, that involve a finder's fee paid to an agency for helping a workplace obtain an employee.

Labour hire industry

Labour hire firms

As of January 2020, the total revenue of the labour hire industry in Australia is approximately $29 billion; according to industrial analysts. [4] The analyst firm IBISWorld claims that there are 9,634 labour hire businesses and 362,800 labour hire employees in the industry. [4]

The largest companies in the Australian labour hire industry are Hays, Persol Holdings (which owns both Programmed & Skilled Group), Recruit (trading as RGF Staffing), WorkPac, ManpowerGroup, Adecco, and Randstad. [4] Other notable labour hire firms include Ingeus (notable for being founded by Thérèse Rein, the wife of former Prime Minister Kevin Rudd), [5] and Serco (notable for its labour hire procurement to government departments). [6]

Industrial clients

Labour hire arrangements are used by many large companies in Australia in their workforce. A prominent example is the Amazon MEL1 facility, located in Dandenong South. It was reported by the Sydney Morning Herald that 100% of the non-managerial workforce at that facility is provided by Adecco. Reportedly, Amazon's other facilities in Australia are operated on similar terms. [7]

Labour hire is also used in great quantity by the Commonwealth Government. [8] [6]

As the de jure employer, labour hire providers are legally responsible for ensuring compliance with Australian Industrial law, including the Fair work act.

Labour hire employees must be offered wages & conditions in compliance with the applicable Industrial award.

Liability for injuries at client worksites

Labour hire companies have been found legally liable for the injuries of their employees, on the tort ground of Negligence. In the case Drake Industrial v WorkCover Authority the common law duty of care owed by employers toward their employees, was affirmed to include circumstances in which that employee worked on a premises not controlled by the labour hire employer. The court noted that:

"An employer who sends its employees into another workplace over which they exercise limited control is ... under a particular positive obligation to ensure that those premises, or the work done, do not present a threat to the health, safety or welfare of those employees."

Enterprise bargaining agreements

Enterprise bargaining agreements (EBAs) applicable to a workplace do not legally cover labour hire employees and their employers, [9] unless there is a clause written into the agreement expressing that to be the case. [10] Instead, EBAs are formed between employees of the labour hire company, and the labour hire company itself. This can result in a pay difference between actual employees of a worksite, and those working there through labour hire; an aspect that has been criticized by the Australian Labor Party. [11]

Labour hire companies have been accused of using spurious legal tactics to undermine EBAs existing between employees and their existing workplaces; on behalf of clients. [12] In 2016, Carlton & United Breweries (CUB) attempted to abolish an in-force EBA with its workforce, by paying the company Programmed to become their legal employer. Programmed then attempted to force the workers onto an EBA that had been created years earlier, with different workers; with substantially lower wages. When some workers refused to sign-on to the new agreement, Programmed attempted to replace them with labour hire. CUB and Programmed's actions resulted in a consumer boycott and picketing campaign against the company that lasted six months. [13] (see also: Carlton & United Breweries dispute)

Regulation

De jure employers in a labour hire arrangement are subject to the industrial laws that generally bind all employers. [3] This includes any applicable Industrial awards, as well as additional laws specifically regulating the conduct of labour hire businesses. In Victoria and Queensland, labour hire businesses must obtain a license to operate from the State government. [1] [14] [15]

Terminology

While labour hire is the term used in Australia and Namibia, the concept has varying terminology depending on jurisdiction. Practices analogous to labour hire in Australia have been referred to as Labor Contracting (USA), and Labour brokering (South Africa), among other names.

Likewise, labour hire providers are referred to by differing names depending on country. Some terms include Employment agency (UK), professional employer organization (USA), among others.

See also

By country

Related Research Articles

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Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The interests of the employees are commonly presented by representatives of a trade union to which the employees belong. A collective agreement reached by these negotiations functions as a labour contract between an employer and one or more unions, and typically establishes terms regarding wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs. Such agreements can also include 'productivity bargaining' in which workers agree to changes to working practices in return for higher pay or greater job security.

Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any other entity, pays the other, the employee, in return for carrying out assigned work. Employees work in return for wages, which can be paid on the basis of an hourly rate, by piecework or an annual salary, depending on the type of work an employee does, the prevailing conditions of the sector and the bargaining power between the parties. Employees in some sectors may receive gratuities, bonus payments or stock options. In some types of employment, employees may receive benefits in addition to payment. Benefits may include health insurance, housing, disability insurance. Employment is typically governed by employment laws, organisation or legal contracts.

<span class="mw-page-title-main">Temporary work</span> Type of employment

Temporary work or temporary employment refers to an employment situation where the working arrangement is limited to a certain period of time based on the needs of the employing organization. Temporary employees are sometimes called "contractual", "seasonal", "interim", "casual staff", "outsourcing", "freelance"; or the words may be shortened to "temps". In some instances, temporary, highly skilled professionals refer to themselves as consultants. Increasingly, executive-level positions are also filled with interim executives or fractional executives.

In labor law, a union shop, also known as a post-entry closed shop, is a form of a union security clause. Under this, the employer agrees to either only hire labor union members or to require that any new employees who are not already union members become members within a certain amount of time. Use of the union shop varies widely from nation to nation, depending on the level of protection given trade unions in general.

<span class="mw-page-title-main">Australian labour law</span> Rights and duties of workers, unions and employers in Australia

Australian labour law sets the rights of working people, the role of trade unions, and democracy at work, and the duties of employers, across the Commonwealth and in states. Under the Fair Work Act 2009, the Fair Work Commission creates a national minimum wage and oversees National Employment Standards for fair hours, holidays, parental leave and job security. The FWC also creates modern awards that apply to most sectors of work, numbering 150 in 2024, with minimum pay scales, and better rights for overtime, holidays, paid leave, and superannuation for a pension in retirement. Beyond this floor of rights, trade unions and employers often create enterprise bargaining agreements for better wages and conditions in their workplaces. In 2024, collective agreements covered 15% of employees, while 22% of employees were classified as "casual", meaning that they lose many protections other workers have. Australia's laws on the right to take collective action are among the most restrictive in the developed world, and Australia does not have a general law protecting workers' rights to vote and elect worker directors on corporation boards as do most other wealthy OECD countries.

A modern award is a ruling in Australian labour law of the national Fair Work Commission or by a state industrial relations commission which grants all wage earners in one industry or occupation the same minimum pay rates and conditions of employment such as leave entitlements, overtime and shift work, as well as other workplace-related conditions. The national awards, with the National Employment Standards, provide a minimum safety net of terms and conditions of employment for all national system employees. The pay rates are often called award wages or award rates. Awards in Australia are part of the system of compulsory arbitration in industrial relations.

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<span class="mw-page-title-main">WorkChoices</span> Australian industrial relations law

WorkChoices was the name given to changes made to the federal industrial relations laws in Australia by the Howard government in 2005, being amendments to the Workplace Relations Act 1996 by the Workplace Relations Amendment Act 2005, sometimes referred to as the Workplace Relations Amendment Act 2005, that came into effect on 27 March 2006.

The Australian Fair Pay and Conditions Standard was a set of five minimum statutory entitlements for wages and conditions introduced as part of the Howard government's WorkChoices amendments to Australian labour law in 2006 and then abolished by the Fair Work Act 2009 in 2010.

Overtime bans are a type of strike in which workers refuse to engage in overtime work, being any work that falls outside of contracted hours. They do this to leverage their employer into negotiating various working conditions. Often organised in unions, workers may choose this form of industrial action to bargain for a higher rate of pay, better working conditions or to discourage an employer from making redundancies. Unlike a full strike in which employees are usually in breach of their contract, workers engaging in overtime bans are typically well protected. Employers cannot legally withhold normal wages during an overtime ban if employees are not breaching the terms of their employment contracts by refusing to do overtime work. However, the legalities of overtime bans do vary between countries. Overtime bans are effective where "industries and organisations run on such habitually high levels of overtime or goodwill that overtime bans ... can have a significant and immediate impact upon the availability of a good or service". Historically, unions have at times received criticism on ethical grounds for choosing to enact overtime bans. The literature records the occurrence of such bans from the 1800s and there is documentation of their use in four continents.

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<span class="mw-page-title-main">Office of the Australian Building and Construction Commissioner</span>

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South African labour law regulates the relationship between employers, employees and trade unions in the Republic of South Africa.

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<span class="mw-page-title-main">Fair Work Act 2009</span> Australian industrial relations law

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The National Employment Standards (NES) is a set of eleven minimum entitlements for employees in Australia who are covered by the Fair Work Act 2009. An award, enterprise agreement, other registered agreement or employment contract cannot provide for conditions that are less than the national minimum wage or the National Employment Standards and they can not be excluded. The NES have applied to employees since 1 January 2010, having replaced the previous five entitlement standard under the WorkChoices legislation.

Labour hire is a form of employment in which an employer directs their de jure employees to perform work at an external workplace, belonging to a client of the legal employer.

<span class="mw-page-title-main">Programmed Maintenance</span>

Programmed Maintenance Services Limited, also known as Programmed is a Japanese Labour hire and Recruitment company, specialising in blue-collar services. It is headquartered in Melbourne, Australia. Programmed is a wholly owned subsidiary of Persol Holdings, a human resource conglomerate headquartered in Tokyo.

<i>Fair Work Ombudsman v Quest South Perth</i> 2015 judgment of the High Court of Australia

Fair Work Ombudsman v Quest South Perth is a 2015 decision of the High Court of Australia. Quest, a company operating serviced apartment hotels across Australia, used a third-party labour hire company to change the employment status of two housekeepers and a receptionist from employees to independent contractors at its South Perth site. They would then no longer be owed the minimum workplace entitlements owed to employees in Australia. The Fair Work Ombudsman, an authority responsible for enforcing Australian workplace laws, initiated proceedings against Quest South Perth in the Federal Court of Australia.

References

  1. 1 2 "General definition of labour hire services". labourhireauthority.vic.gov.au. Retrieved 23 July 2020.
  2. ↑ Irving, Mark (2019). "3 - 'Employment Arrangements Involving Three Parties'". The Contract of Employment. LexisNexis Butterworths. ISBN   9780409351088.
  3. 1 2 "Welcome to the Fair Work Ombudsman website". Fair Work Ombudsman. Retrieved 23 July 2020.
  4. 1 2 3 "IBISWorld - Industry Market Research, Reports, and Statistics". www.ibisworld.com. Retrieved 24 July 2020.
  5. ↑ Kruger, Colin (4 June 2017). "Therese Rein takes lion's share of $160 million sale of Ingeus". The Sydney Morning Herald. Retrieved 24 July 2020.
  6. 1 2 Sakkal, Paul (24 July 2020). "Centrelink staff stood down, say social distancing pleas were ignored". The Age. Retrieved 24 July 2020.
  7. ↑ Hatch, Patrick (7 September 2018). "In Amazon's 'hellscape', workers face insecurity and crushing targets". The Sydney Morning Herald. Retrieved 24 July 2020.
  8. ↑ "Federal bureaucracy dismissed thousands of staff just before the pandemic hit". www.abc.net.au. 3 July 2020. Retrieved 24 July 2020.
  9. ↑ "Welcome to the Fair Work Ombudsman website". Fair Work Ombudsman. Retrieved 24 July 2020.
  10. ↑ Commission, Fair Work (24 May 2019). "Coverage". Enterprise agreements benchbook. Retrieved 24 July 2020.
  11. ↑ Karp, Paul (19 January 2018). "Amazon's labour-hire deal and the impact on collective bargaining". The Guardian. ISSN   0261-3077 . Retrieved 25 July 2020.
  12. ↑ "Brewery worker agreement was voted on by three casuals". www.abc.net.au. 25 August 2016. Retrieved 25 July 2020.
  13. ↑ "Call to end CUB beer and cider boycott after deal struck". www.abc.net.au. 7 December 2016. Retrieved 25 July 2020.
  14. ↑ "Home | Labour hire licensing Queensland". www.labourhire.qld.gov.au. Retrieved 23 July 2020.
  15. ↑ "Home | Labour Hire Authority Victoria". www.labourhireauthority.vic.gov.au. Retrieved 31 October 2021.
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