Month: November 2017

Victoria’s Labour Hire Licensing Proposal: Any hope of an even playing field? Not much.

Andrew C Wood Bigger Pictures, Employment Agents, Employment Services, On-Hire, Regulation 1 Comment

Victoria is the next cab off the rank with labour hire licensing. And there’s not much time to get submissions in before 6 December. Much of what is described in the consultation paper follows the now familiar pattern in Queensland and South Australia.

It is clear that Victoria is giving a bit more thought to what the exceptions might be and is seeking submissions about them. That’s an encouraging sign. But, it might be difficult to say much about the exceptions until the government reveals a working draft of its primary coverage provision.

It will be worth watching closely to see if Victoria can develop a definition of “labour hire provider” that comes to grips with the question asked in Queensland and still not answered:

“What is there to stop an unscrupulous labour hire supplier from simply re-inventing itself as an unscrupulous labour contractor?”

Judging from the consultation paper, it looks like Victoria is aiming to regulate supply forms of gangmastering/ labour hire and may ignore the substitutable use forms of gangmastering, which are common in cleaning, horticulture, trolley collection and other sectors at risk of the type of exploitation that licensing schemes are intended to prevent.

Let me explain.

The labour hire licensing schemes proposed for Queensland and South Australia prevent (for example) a farmer from dealing with a labour hire provider that employs a worker, whom it sends to the farm to work on the farm in the farm business, unless the labour hire provider has a licence.

To make this clearer, South Australia has recently introduced the following example as an amendment to the coverage provision in its Bill in order to explain what it has in mind:

Guy runs a plumbing business and has an employment contract with Tracey under which Tracey is paid to come to work each day at the plumbing business and be assigned work. Corey runs a grape growing business at which there is a problem with the plumbing. Corey enters into a contract with Guy to diagnose and fix the problem at the business and so Guy sends Tracey to Corey’s grape growing business to do the work. Guy does not provide labour hire services in sending Tracey to do work at Corey’s business.

We can all see that. But you can also see that that approach would  exclude:

Guy runs a grape harvesting business and has an employment contract with Tracey under which Tracey is paid to come to work each day to pick grapes at farms where Guy is providing harvest services. Corey runs a grape growing business at which there are grapes ready for harvesting. Corey enters into a contract with Guy to harvest the grapes and so Guy sends Tracey to Corey’s grape growing business to do the work. Guy does not provide labour hire services in sending Tracey to do work at Corey’s business.

That exclusion is significant if we are talking about a licensing scheme that is designed to prevent exploitation and even up the playing field.

It’s significant because licensing schemes that are imposed solely on supply models don’t prevent labour providers from assembling gangs of workers, housing them in squalid conditions, charging them outrageously for food, transport and accommodation, working them without breaks under a contracted overseer, outsourcing payroll to an associated entity and taking deductions from their pay – if, instead of supplying the worker to the farmer to work in the farm business, the provider merely undertakes to harvest the farmer’s crop using the workers in its own business, whilst buffering the whole arrangement through a chain of sub-contracts and outsourcing arrangements that reduce transparency and accountability.

That’s because the labour provider hasn’t supplied a worker; it has simply used a worker. And it seems that this may not amount to an avoidance measure, because the use form of gangmastering is not covered by the labour hire provider definitions that have been put up so far.

Again, to help illustrate the gaps, let’s see if we can highlight some of the essential pieces of the UK Gangmasters scheme that are missing from the Queensland and South Australian proposals (as we’ve been doing for some months) and now seem likely to be missing from this new Victorian proposal.

GLA s. 4(4)  – A person acts as a gangmaster if he uses a worker to do work to which this Act applies in connection with services provided by him to another person.

 

GLA s.4(5) – A person (“A”) acts as a gangmaster if he uses a worker to do any of the following work to which this Act applies for the purposes of a business carried on by him—

(a)        harvesting or otherwise gathering agricultural produce following—

(i)   a sale, assignment or lease of produce to A, or

(ii)  the making of any other agreement with A,

where the sale, assignment, lease or other agreement was entered into for the purpose of enabling the harvesting or gathering to take place;

(b)        gathering shellfish;

(c)         processing or packaging agricultural produce harvested or gathered as mentioned in paragraph (a).

 

As you can see, they’re not talking here about supply (there’s another sub-section for that).  And there’s a very good reason for it. It’s because the gangmasters, who assemble and run harvest gangs do not supply workers to farmers. They use them themselves and their use of those workers is just as prone to exploit  workers’ vulnerability as any other labour provider model.

In Australia, the three attempts at labour hire licensing that we’ve seen to date have become caught up in the rhetoric about “labour hire” and appear to have been limited by text book understandings of labour hire that have not kept pace with developments in the workforce services market.

They continue to talk about the tripartite supply model of labour provision as though it were the only model worth talking about. Whilst they imagine that there may be other models, they seem unable to clearly distinguish between them; or find  markers that might give meaning to those distinctions.

They seem to have lost sight of the type exploitation that they are trying to prevent and the distribution of that exploitation across different and largely substitutable service models. There seems to have been a critical failure to come to terms with the composition and structure of the workforce services market in this country.

The schemes have been blinkered by  attempts to create a model that covers all industry sectors – including those in which there has been no evidence of egregious exploitation that would warrant the imposition of a restrictive licensing scheme.

In doing so, they have lost the ability to create clear markers between labour contracting that needs to be regulated to even up the playing field and other forms of contracting that do not.

To cover the defect created by their lack of sophistication, they  simply double down on the tripartite supply model.

So, they end up being too wide and untargeted, whilst simultaneously leaving huge gaps, or blind spots, where the risk of exploitation remains uncontrolled or ignored.

It needs to be stated plainly. You don’t create an even playing field for labour hire providers in the workforce services market by imposing on them a restrictive licensing scheme that fails to regulate the supply of substitutable workforce services operating in the same market.

That’s why the UK gangmaster licensing scheme covers both supply and use forms of gangmastering. It’s also why an industry sector specific scheme makes a lot more sense… that is if you’re really trying to target sectors at the greatest risk of exploitation.

Queensland rushed its legislation through parliament ahead of the election and missed the opportunity to address its shortcomings.  In South Australia, the penny is starting to drop, but still has a long way to fall. Victoria has a chance to get it right, but hasn’t given itself much time to do so, with submissions on exceptions due by 6 December and no sight of the draft legislation yet.

Let’s see how this one goes from here. We shouldn’t have to wait too long!

 

Andrew C. Wood

“No Refund” terms & conditions result in $750,000 fine, injunctions and costs orders.

Andrew C Wood Consumer Protection, Contract, Employment Services Agreements Leave a comment

If your terms and conditions expressly or impliedly exclude refund remedies under the Australian Consumer Law, you might be in for a nasty shock.

In a recent case, the Australian Federal Court imposed, by consent, fines of $750,000, injunctions and costs orders (totaling a further $50,000) on MSY Group Pty Ltd, MSY Technology Pty Ltd and M.S.Y. Technology (NSW) Pty Ltd for publishing, including on the companies’ website, business terms and conditions that impliedly excluded remedies available under the Australian Consumer Law (ACL).

As a result, the Court declared that the respondents:

  • “engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18 of the ACL;
  • “made false or misleading representations in relation to the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy in contravention of s. 29(1)(m) of the ACL; and
  • ” made false or misleading representations in relation to a requirement to pay for a contractual right that is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy in contravention of s 29(1)(n) of the ACL.

What is especially important about this case is that the Court held that a contravention of these ACL provisions could occur, where MSY’s terms of business and representations:

… impliedly represented to consumers that their rights were limited when that was not the case.

…were silent in response to the consumer’s reference to their specific ACL rights and impliedly represented that MSY … was not required to provide an ACL remedy to consumers.

(My underlining).

The decision creates a risk for businesses that insert additional or alternative “remedies” – such as candidate replacement “guarantees” or indemnities – into their terms of business (or who answer questions raised by consumers about their remedies for defective services) and say nothing about the availability of the ACL remedies in circumstances where the ACL remedies apply.

The ACCC has been active, recently, in challenging unfair terms and conduct that may be in breach of the ACL. If it’s been a while since you last had your terms of business reviewed, you might do well to have your lawyers review them for you against the background of recent developments in this area.

And if your customer-facing staff are not familiar with the ACL remedies, it might be worth investing in some training.

It could be a lot less expensive than the $800,000 in fines and costs ordered in this case!

Andrew C. Wood

Uber drivers confirmed as “employees” by UK Employment Appeal Tribunal.

Andrew C Wood Contract, Employment Agents, Employment Law, Employment Services, Employment Services Agreements, Gig economy, Regulation Leave a comment

silhouette-of-scaleOn 10th November 2017, the UK Employment Appeal Tribunal delivered its judgment in Uber & Ors v Aslam & Ors [PDF].   The decision will be of interest to agencies and workers operating in the “Gig economy. Here is a brief summary.

Background

Members of the Uber Group had appealed from an earlier decision of the Employment Tribunal, which found that Uber drivers in London were “workers” within the meaning of the Employment Rights Act 1996, the Working Time Regulations 1998 and the National Minimum Wage Act 1998; and that any Uber driver who had the Uber app switched on, was within the territory in which they were authorised to work (London) and was able and willing to accept assignments was working for Uber London Ltd.

Appeal

A key ground in Uber’s appeal was that the Employment Tribunal had mischaracterised the true relationship between Uber and its drivers – that rather than being one of employment, it was one of agency in accordance with which Uber provided booking services as agent for its drivers.

Uber pointed to provisions in its suite of contracts and terms of businesss, which it contended supported its view.

Outcome

The Employment Appeal Tribunal disagreed and dismissed Uber’s appeal. At the time of writing it is understood that Uber intends to take a further appeal to the UK Supreme Court.

Take-away points

In the meantime, there are a few quick points that can be made about the EAT decision.

  1. It is the reality of the situation that matters. The Appeal Tribunal said:

[The Employment Tribunal] was entitled to disregard the terms in the written agreements and the labels used therein.

…the true agreement between the parties was not one in which [Uber London Ltd] acted as the drivers’ agent.

  1. Control still matters. The Appeal Tribunal said:

 The [Employment Tribunal]…was entitled to look at all factors to determine whether this was a case in which the … Uber drivers were entering into contracts with passengers as part of their own business undertakings. Seeing that they were subjected to control on the part of [Uber London Ltd] was an indication that they were not.

  1. These matters will continue to be decided on a case by case basis. The Appeal Tribunal said:

Inevitably the assessment [the ET] had carried out was fact-and context-specific.

Moving forward

It will be interesting to see what the Supreme Court makes of this.

Whilst, it would seem possible, in theory, to construct an agency relationship of the type which Uber contended for in this case, one might wonder whether Uber would have done better to construct the agency and booking service between it and the riders, rather than between Uber and the drivers.

It could also be important to recognise that this might not really be a case, where the Employment Appeal Tribunal said that the written documentation doesn’t matter … it’s perhaps more a case of making sure that the written documentation gets it right – i.e. that it reflects the true relationship between the parties.

 

Andrew C. Wood

 

Proposed amendments to South Australia’s Labour Hire Licensing Bill 2017 bring some clarity to intended coverage… at last. But it’s not all good!

Andrew C Wood Consumer Protection, On-Hire, Regulation Leave a comment

It is encouraging to see the penny starting to drop, with notice of some recent amendments to South Australia’s Labour Hire Licensing Bill 2017 filed in Parliament last week.

The amendments revise the definition of labour hire services provider by emphasising that a supply occurs, where the worker performs the work in the third person’s [client’s] business. Sub-clause 6(1) of the Bill will now read:

A person provides labour hire services if, in the course of conducting a business, the person supplies, to another person, a worker to do work in a business or commercial undertaking of the other person.

The amendment makes it clear that a tripartite arrangement involving agency (as provider), worker and third person is intended; and starts to align the legislation more closely to employment agency arrangements found in South Australia’s Payroll Tax Act and in the payroll tax legislation of NSW and Qld.

At the same time, however, the change signals a clear departure from the UK’s #gangmaster model, where the bipartite use form of gangmaster labour contracting is regulated along with the tripartite supply form, which is associated with traditional labour hire.

In many ways, that departure seems a pity; because a worker, who is used as part of a gang that is assembled by a provider of harvesting, chicken processing, cleaning, or trolley collection services (for example) may lose protection because it will not always be clear that they are working “in the business or undertaking of the other person” – i.e. the third party (client). They are more likely to be working in the business or undertaking of the provider.

What seems not to be recognised by either Queensland’s Act, or the South Australian Bill is that the type of exploitative conduct, which the legislation is designed to stop, extends across both different types of gangmastering.

The question was asked by Queensland Parliament’s Finance & Administration Committee during the public briefing on the legislation back in June:

“What is there to stop unscrupulous labour hire firms simply re-inventing themselves as unscrupulous labour contractors?”

The answer now, both in Queensland and more clearly so in South Australia, would appear to be, “Nothing”.

So, the penny may be starting to drop; but it still has a long way to fall.

That has to be a matter of concern, with the legislation proposed for commencement in South Australia on 1 March, 2018 and in Queensland on 16 April, 2018 and not a lot of time to do much about it.

Businessman & Newspaper

 

 

 

Andrew C. Wood