The ACCC’s small business collective bargaining class exemption, which has been coming for some time, is now set to start on 3 June 2021.
The exemption makes it lawful for some small businesses to engage in collective commercial bargaining without contravening Australian competition laws.
It will be interesting to see what use staffing agencies are able to make of it in banding together to negotiate with customers and suppliers. If you are an on-hire agency, your independent contractors may also be able to band together to negotiate with you.
Other applications might permit some platform workers to band together to negotiate with their platform controller.
Be careful, though. There are some limits that you will need to stay within and there is a notification process.
Have a read of the determination and share your thoughts? What uses do you see for the new exemption?
Mere days before the scheduled commencement of the ACT’s Labour Hire Licensing Scheme, the regulations have finally been notified. Unlike the regulations in other states, they don’t set out exemptions or fees.
But for starters. the following are not “workers”:
·high income workers provided that they’re not covered by an award of enterprise agreement under the FWA;
·in-house employees on secondment;
·internal labour-hire employees working within a group of related entities;
·employed directors and senior managers of corporations with no more than two directors provided that the director or senior manager is the only person who is supplied by the corporation to undertake work for another person.
There are definitions that refine some of these exceptions.
The Australian Government’s response to the recommendations of the Royal Commission into Aged Care Quality and Safety has accepted most of the recommendations in the Commisison’s final report delivered in March this year.
Last night’s budget and supporting measures forecast that changes are afoot, with a promised review of the Aged Care Quality Standards to consider “appropriate regulatory levers to require providers to ensure staff are appropriately trained.”
Back in March, 2021 the Aged Care Royal Commission delivered its final report into the Australian Aged Care system and recommended a registration scheme for the personal care workforce that was to include:
a mandatory minimum qualification of a Certificate III
ongoing training requirements
minimum levels of English language proficiency
criminal history screening requirements
a code of conduct and power for a registering body to investigate complaints into breaches of the Code of Conduct and take appropriate disciplinary action.
Commissioner Briggs additionally recommended that the government consider whether registration should be established under the National Registration & Accreditation Scheme (“NRAS”).
Although the government has accepted Recommendation 77 “in principle”, it has determined not to establish the scheme under the NRAS due to concerns that the “NRAS requirements would be disproportionately burdensome for personal care workers and present a significant ongoing cost.”
Nevertheless, it has agreed:
to establish a single care and support sector code of conduct (Code) across the aged care, veterans’ care and disability support sectors for implementation by 1 July 2022; and
to deliver a nationally-consistent centralised pre-employment screening check with a register of cleared and excluded workers, in the aged and veterans’ care sectors, commencing 1 July 2022.
To that end, the government has included, in its latest budget, provision of $105.6 million to introduce the code of conduct, screening check and register.
The government additionally accepted:
Recommendation 80 – Dementia and palliative training for all workers; and
Recommendation 81- Ongoing professional development for the aged care workforce.
It has indicated that it will respond to aged care workforce development needs through its Growing a skilled, high-quality workforce to care for older Australians measure and will invest $338.5 million over 3 years “to grow, train and upskill the aged care workforce to drive improvements to the safety and quality of care”.
So, the clock is now ticking and there is just a little over twelve months to see what the changes will mean for recruitment and staffing services in the agency sector.
If you have the time to do it, browsing through the 2,000 plus modern slavery statements published to date on the Australian Register can yield huge dividends in terms of discovering how others identify and remediate risks of modern slavery in their supply chains.
If you don’t have time to do it, The Recruiters’ Casebook will try to bring you examples that recruitment and staffing firms would do well to note.
Here’s a textbook example of how Telstra Group used its leverage to address risks which it discovered in its supply chain. The Commnwealth’s Guidance for Reporting Entities on the Modern Slavery Act 2018 (p.51) explains that “Leverage means your ability to influence the other entities to change their behavior.”
Pay special attention to:
how the risk was identified
what the risk was
what justification the supplier put forward
why Telstra Group considered the practice was unacceptable
what Telstra Group did about it
how the supplier responded
what the subsequent outcome has been.
Telstra engaged an independent third party to conduct site audits of one of our suppliers’ labour practices. The audit revealed evidence of practices resembling debt bondage in their Hyderabad operations in India. Under the arrangements, employees were bound to repay training costs incurred as part of their recruitment. While the supplier asserted such practices were both common and legal in India, we took the view that it was not acceptable and in breach of our Supplier Code of Conduct.
We wrote to the supplier and asked them to remove this bond immediately for all employees delivering services to Telstra and all new hires. The supplier agreed to this request.
We also asked that the bond be removed for all other employees of the supplier including those who do not perform Telstra work. The supplier agreed not to take any action to enforce the service bond provisions under existing employment contracts and to issue all employees with new contracts that do not contain service bond provisions. A follow-up audit found the changes we requested had been implemented. We were also pleased to see evidence that throughout the COVID-19 pandemic, the supplier has continued to pay all employees 100 per cent of their wages.
In this example, Telstra Group is only saying that the supplier’s practise resembled debt bondage.
The Commonwealth’s Guidance for Reporting Entities on the Modern Slavery Act 2018 (p.78) explains that “debt bondage” occurs “where the victim’s services are pledged as security for a debt and the debt is manifestly excessive or the victim’s services are not applied to liquidate the debt, or the length and nature of the services are not limited and defined.”
Nevertheless, Telstra was sufficiently concerned about the practice to do something about it – and without getting involved in technical legal arguments about definitions.
The outcome shows what can be achieved when all parties co-operate to remediate practices that may have adverse impacts on workers and which may be questionable under values and principles of good workforce governance and supply chain stewardship.
What would you have done if you had discovered the practice or something similar in your supply chain or service network?
Browse through the 2,000 plus modern slavery statements published to date on the Australian register. You might see that there has been considerable interest in the use of “modern slavery clauses”. These clauses aim to remediate risks that are caused or contributed to by reporting entities or to which they are directly linked through their operations or supply chains.
Although such clauses can help remediate risks and create a solid foundation for cooperation between suppliers and their customers, some caution is still needed. That’s because the quality of the modern slavery clauses that have been described in the published statements ranges from well-tempered to confused to downright dangerous.
How do you tell the difference? You need to start with a clear understanding of what prohibitions exist and what Australia’s Modern Slavery Act requires.
Distinguishing good from bad
Did you know that the Act doesn’t actually prohibit modern slavery? That’s done by the criminal law.
Did you know that the Act doesn’t actually require you to eliminate modern slavery from your supply chains? It only requires some entities to report on the risks of modern slavery in their operations and supply chains and actions to address those risks.
Now think about some of the modern slavery clauses you might have seen:
the ones that reference so-called “duties of care” supposedly set out in the Act;
the cut-and paste ones that require you to warrant that your supply chain is free from slavery, servitude, forced or compulsory labour and human trafficking as defined by the Modern Slavery Act 2015; 
the ones that require you to comply with all your legal obligations, including WHS, but which forget to say anything meaningful about modern slavery and the Criminal Code;
the ones that require you to warrant that you will comply with all rules or international treaties signed by any government authority in relation to corporate social responsibility; but which fail to appreciate that, under our law, those rules only become binding in Australia once they are passed into domestic legislation -= and they are often passed into domestic legislation subject to reservations or variations;
the ones that include indemnities and hold-harmless provisions.
There are plenty of other examples of poorly constructed clauses out there!
Consequences of breach
Have you ever thought about what the consequences of a breach of these clauses might be? Can your customer refuse your claims for payment? Can you customer terminate your supply agreements? Have you even supplied what you agreed to supply (e.g., services free from any connection to forms of modern slavery through your operations or supply chains)? Can your customer sue you for damages?
Poorly designed modern slavery clauses do nothing to address modern slavery risks. They attempt to shift the burden of compliance in one direction. In doing so, they provide false comfort to parties who rely on them. They add unnecessary costs to transactions in which they are deployed.
A better approach
So, learn how to identify them. Explain to your customers why you can’t or won’t sign them, and help your customers to understand the important contribution that you can both make to combatting modern slavery, not only through well designed modern slavery clauses, but more importantly, through well-designed workforce governance controls and practices
Andrew C. Wood
 The MSA 2015 is actually and Act of the UK Parliament! The Australian MSA (Modern Slavery Act 2018 (C’th) doesn’t actually define these terms. They’re defined in the Criminal Code. “Modern Slavery” is given an extended meaning in the MSA (C’th).
Labour hire providers should note that there are currently two appeals before the High Court, which challenge accepted approaches to the characterisation of independent contractors. The outcomes could upset independent contracting arrangements that are overly dependent on the technicalities and “deep entrenchment” of the Odco system and may lead staffing agencies to a fresh need to review their use of independent contractors.
A young UK backpacker, who “had no aspect of a business or intended business, no expressed desire to act in any capacity other than as a builder’s labourer, and merely sought remuneration for the deployment of his labour on a building site supervised, directed and controlled by the builder” was characterised, at first instance, as an independent contractor on an application of the multi-factor test and Odco principles.
The Full Court of the Federal Court of Australia upheld the finding despite the absence of any business clearly having been carried on by the worker. However, in doing so, the Chief Justice expressed a preference for a different outcome though feeling constrained by intermediate appellate decisions which had previously supported Odco contracting arrangements.
The High Court granted special leave to appeal in February this year. The Appellant’s submissions were filed last Friday (16 April 2021).
At issue is a question of whether the multi-factor test was correctly applied in a labour-hire context. There is a related question about the need for workers to be carrying on their own independent businesses in order to be independent contractors.
The case concerned the various entitlements of truck drivers, who derived their sole income by working for same business for nearly 40 years – and the corresponding obligations of the company for which they worked. It’s not a labour hire case, but it raises similar characterisation questions about the role of the business test in determining whether workers are employees or independent contractors.
The drivers were required to purchase a truck to retain work and contracted with the company through their family partnerships, which owned the trucks. The drivers were required to be available to work during set hours. The company logo was displayed on drivers’ trucks and company branding appeared on the drivers’ clothing. Although the drivers theoretically may have had the ability of sell their goodwill, they had no practical capacity to generate any goodwill of their own.
On an application of the multi-factor test the drivers were held to be independent contractors. A deciding factor was that the workers were held to be running businesses of their own.
The Full Federal Court reversed the decision on appeal. Wigney J’s judgment highlights the problems facing those who rely too much on cleverly crafted documents and overly sophisticated or artificial arrangements.
“To my mind, the primary judge concluded as he did by giving primacy and excessive weight to contractual labels and theoretical possibilities and insufficient weight to the reality and totality of the working relationship between the parties, as demonstrated by the way they actually conducted themselves over many years.”
Although the drivers’ arrangements displayed some of the trappings of carrying on their own businesses, that was not sufficient to displace the reality, observed after consideration of the whole work relationship, that they were employees.
The case is to be heard together with CFMMEU v Personnel Contracting. The Appellant’s submissions were filed last Friday (16 April 2021). At issue are questions about whether the drivers were “employees” for purposes of Fair Work Act 2009 (Cth), Superannuation Guarantee (Administration) Act 1992 (Cth) and “workers” for purpose of Long Service Leave Act 1955 (NSW).
Respondents’ submissions in both cases are due to be filed in May, and any replies in early June. After that, the matters will be listed for hearing.
In light of these developments, it might be prudent for staffing agencies to review their independent contracting arrangements, and make contingency plans for managing any that could unravel should the High Court hand down a decision that indicates that they may no longer be sustainable.
Andrew C. Wood
Construction, Forestry, Maritime and Energy Union & Anor v Personnel Contracting Pty Ltd  HCATrans 30 (12 February 2021).
 As described by Alsopp CJ on appeal. see fn.5 below.
Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd FCA 1806 at paras  to .
Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd FCAFC 122
The recent NSW Supreme Court decision in Branded Media Holdings holds some important lessons for recruiters and others who are considering the use of outsourced employer-of-record (EoR) services – especially if they imagine that using EoR services will protect them, in all cases, from liability as the “true employer”. That’s because statutory and common law liabilities generally rest with the true employer, irrespective of where formal documents might be trying to direct them
In Branded Media, liquidators and deed administrators of two related companies sought directions from the court as to the identity of the employer of specified employees within the Branded Media Group.
The companies were Branded Media Holdings Pty Ltd (in liq) (Holdings) and Brand New Media Pty Ltd (subject to a deed of arrangement) (BNM). The liquidators and deed administrators’ position was that Holdings was the employer.
The Commonwealth intervened to contend that BNM was the employer. The Commonwealth had advanced more than $1 million in respect of the employees’ unpaid entitlements under the Fair Entitlements Guarantee Act 2012 and stood to recover a substantially higher amount if BNM was held to be the true employer.
The contest was clouded by uncertainty because, whilst the formal documents recorded Holdings as the employer, day-to-day management of the work relationship was conducted by BNM.
The court held that the true employer was BNM. Some telling factors included:
Holdings did not conduct any business by which it generated income;
Holdings was not the recipient of the services of the employees;
the employees provided their services to BNM;
Holdings was wholly dependent upon BNM to meet its financial obligations;
Holdings did not operate any bank accounts;
Holdings did not in fact pay the employees;
BNM in fact paid the salaries and wages of the employees;
BNM had its logo on some employment forms;
business cards used by the employees bore the logo of BNM;
the sign-off section of emails sent by the employees referenced BNM;
the website referencing the Employees referenced BNM.
You might already be getting a sense of how some of those factors might play out in a case where a staffing agency supplies workers to one of its clients, managing their shifts, providing them with agency uniforms, and binding them to agency policies; but arranging for those workers to be employed “on-the-record” by an outsourced payroll company.
The Branded Media case is important because the Court clarified the principles that are used to determine which of the two companies was the actual employer. In doing so, it made clear that:
The Court must look to the “substance and reality” in identifying the true employer in these circumstances and would look beyond contractual documentation and to the reality of the manner in which the parties conducted themselves in order to do so.
[The Court may also] have regard to whether the suggested arrangement had an “intelligible business objective” which is “consistent with the financial and administrative organisation of the business”.
The case is also helpful to the extent to which it clarifies that employment-of-record is not a distinct category of employment, but nothing more than an expression to describe an arrangement by which certain of the true employer’s statutory or contractual responsibilities are performed by someone else.
Such an arrangement will not necessarily relieve the true employer of those responsibilities if the EoR fails in performance. And some liabilities, such as the employer’s vicarious liability at common law, may continue to rest with the true employer to the extent to which they derive from the true employer’s notional control of its employees.
The need to identify the true employer will also arise in the context of labour hire licensing prosecutions to the extent to which it may be necessary to determine whether workers of an unlicensed provider who has sought to outsource the obligation to pay its workers to an EoR payroll company may be left with the residue of the statutory obligation to pay sufficient to necessitate the holding of a licence -despite having passed to the EoR a contractual obligation to pay the workers.
One of the more intriguing features of the Australian labour hire licensing schemes concerns the definition of a “worker” and the requirement that a person is only a worker for another person (the provider) if the provider is obliged to pay the worker, in whole or part, for the work. Whether such an obligation exists should be relatively easy to determine in most cases. But it will not always be so; and the issue may sometimes be clouded by the involvement of intermediaries.
Take the case of a labour hire agency’s worker who is engaged through a payroll company that provides outsourced “employer-of-record” services. Where does the obligation to pay the worker lie? Is it with the agency or the payroll company? Does a statutory obligation to pay perhaps rest with the agency as the “true employer”, whilst a contractual obligation lies with the payroll company?
You can already see that we are now having to distinguish between contractual and statutory obligations.
If the payroll company is found to be the “true employer”, is the agency necessarily off the hook? What happens if the payroll company fails to pay – perhaps because of insolvency? Could a restitutionary claim against the agency, as someone who has benefited from the work to the extent that it was paid by the host for supplying the worker – give rise to an equitable obligation on the part of the agency to pay the worker? Would the obligation be to pay “in whole or in part for the work”? What questions of characterisation arise? And to what extent are those questions resolved by the express legislative provisions in South Australia, Victoria and the ACT, but not in Queensland, that the obligation may arise “directly or indirectly”?
So far, we have distinguished between contractual, statutory, and equitable obligations to pay.
Next, take the case of an agency worker who operates through a family company that is the trustee of a discretionary trust which receives payment for the supply of the worker. The trustee may be under no obligation at all to pay the worker; and any distribution under the trust, being an exercise of discretion, might not be able to be characterised as being “in whole or in part for the work”.
As I say, these are intriguing questions – at least for some! They were not answered when the legislation was being drafted. And whilst they may seem highly technical, success and failure in prosecutions and civil actions may well depend upon the answers that the courts will eventually have to provide.
Andrew C. Wood
Labour Hire Licensing Act 2017 (Qld) s. 8(1)(b), Labour Hire Licensing Act 2017 (SA). s. 8(1)(b), Labour Hire Licensing Act 2018 (Vic) s. 9(1)(b), Labour Hire Licensing Act 2020 (ACT) s. 8(1)(b).
If you’re advertising your ability to provide labour hire services throughout Australia – as many agencies do – please take a moment to consider whether you could be committing an offence in Queensland, South Australia, or Victoria if you don’t hold a licence in those States.
It’s not enough to hold a licence in just one State. That appears to be so regardless of where your business is located, because all three States have a provision that says it’s an offence to advertise your willingness to provide labour hire services unless you hold their licence. They’ve also bestowed inter-state operation on their labour hire licensing laws.
The Australian Capital Territory’s scheme, which has not commenced yet, does not appear to have a similar provision. However, whether advertising the ability to supply labour hire services in the Territory without holding a licence could be prosecuted as an attempt to commit an offence may be a question that warrants careful consideration.
So, have a look at what you claim, on your websites and in your marketing materials, to be able to do, and get it checked out.
Two Fair Work Commission decisions handed down in January 2021 confrm that we are still no closer to recognising a concept of “joint employment” in Australian employment law.
Both decisions involved challenges to the Commission’s unfair dismissal jurisdiction.
In Don Allan v Cleanaway Waste Management Company T/A Cleanaway Port Adelaide Solid Waste Services  FWC 20 (5 January 2021), the challenge came about because the applicant for reinstatement, who had previously worked with the respondent employer through a labour-hire firm, was unable to satisfy the minimum employment period necessary to entitle him to seek reinstatement. He argued that time spoent in service of the labour-hire firm should be aggregated with time spent in direct employment of the respondent. To support his contention, he argued that the labour-hire firm and its client had been his joint employers.
In Toni Bou Lattouf v Bechtel Australia Pty Limited  FWC 142 (25 January 2021), the challenge came about because the applicant, an Australian citizen who had been working overseas for a foreign entity within the Bechtel Group at the time of his dismissal, could not establish that it was the Australian entity named as respondent, rather than the foreign entity, that was his employer. To get around the difficulty, he argued that the Australian entity was jointly his employer with the foreign entity.
In both cases, which were heard by Deputy President Anderson in Adelaide, the applicants were unsuccessful. The reasons were similar. It comes down to this (as held in the Cleanaway decision):
 Nor do I accept the proposition that Mr Allan was jointly employed by both Tecside and Cleanaway. There is no legal foundation on which a claim of joint employment in respect of the same work can be made or sustained under Australian law. I adopt the observations of Hampton DP in Costello v Allstaff Industrial Personnel (SA) Pty Ltd and the later observations of a full bench of this Commission in FP Group v Tooheys on this point where it was said:
“the application of a concept of joint employment to labour hire arrangements would involve a very considerable development of the common law…we do not consider that the Commission’s role as a statutory tribunal extends to engagement in the development of the common law. That is a matter for the courts.”
 Such an approach is consistent with observations made by a separate full bench in French Accent:
“ Moreover, the nature of the ultimate question is such that in any given case that is not clear cut, reasonable judicial mindsmay differ as to the correct answer in any given case. This was explicitly recognised in Roy Morgan. This necessarily means that there is an area of uncertainty for businesses that wish to engage only on the basis of independent contract and not on the basis of employment. Any change to the present approach is a matter for the legislature. Our duty is to continue to apply the established general law approach until legislation or the High Court requires otherwise.” (emphasis added)
Neither the legislature nor the High Court has shown much sign of requiring otherwise to date.