A National Labour Hire Scheme … Really?

If anyone is talking to you about a national labour hire licensing scheme, just ask them what they would do with the four current state and territory schemes.

Perhaps the only justification for visiting the regulatory burden of a another licensing scheme on the Australian labour market would be that it might pave the way to dismantle the four existing schemes – at least in part. One set of regulatory burdens in place of four. Maybe that could be justified. But can you see anyone actually doing it?

And even if it could be achieved, what would stop the states and territories from retaining local schemes to licence labour hire supply to their own public sectors, which are substantial users of labour hire services – though some of them might not like to admit it.

Those with longer memories might recall the measures that were included in the intergovernmental Competition Principles Agreement to encourage the dismantling of anti-competitive state licensing schemes during the Hilmer reform era. Perhaps that’s a history that should be revisited.

Andrew C. Wood

A Free Spirit’s Guide to Saying “No” to Employment; and “Yes” to Independent Contracting

Do the common law tests used to distinguish employment from independent contracting, override my decision to work for someone but not be their employee; to work for them, but not have them as my master?

We all know that there’s no longer any point in trying to define work relationships in our contracts.  We can set out our respective rights and obligations; but only a court can say what the legal effect of that will be.[i]  Everything else is just opinion. And, whilst some opinions are better than others, a court won’t give much weight to the label we have ascribed to our relationship – at least, not in Australia.

Is it a matter of consent rather than “labelling”?

Let’s accept, for argument’s sake, that the contract, which the court is going to interpret in order to define our work relationship, can never be any better than the consent that underpins it.  So, what if, instead of “labelling” our relationship as one of “independent contract”, we were to insert a clause that made it clear that we did not consent to be an employee?

We’re talking, here, about a genuine refusal of consent to accepting the status of an employee. There’s no room for sham contracting or equivocation in this.

But, assuming that the withholding of consent is genuine, could a court, limiting its consideration of the relationship to an examination of the express terms of the contract (as it now says it must do), ignore an express withholding of consent, coupled with an interpretation provision along the lines of:

“Parties acknowledge and accept that the contractor does not consent to be an employee or to enter into any relationship of employment and reserves full capacity to perform the work required by this contract as an independent contractor (the contractor’s reservation).

The parties agree that any provision of this contract that contradicts the contractor’s reservation must be read down or severed to the extent necessary to uphold the contractor’s reservation.”

[Experimental drafting for discussion purposes only]

A bit dramatic, perhaps. But would it work? Might it tip a court’s interpretation of an obligation to “co-operate”, say, from one of “control” (importing employment)[ii] in favour of one that recognises that “the parties intended to reserve to [the worker] a degree of independence and wished to avoid a relationship of subservience”.[iii] 

But who wouldn’t want to be an employee?

Why might a person not consent to be an employee? Here are some reasons that reflect the unattractive status of employment under current Australian employment laws:

  • I might not wish to be bound to my employer by a wide-ranging legal duty of fidelity and loyalty…
  • especially as I might not wish to work under a legal relationship in respect of which the common law does not recognize an implied duty of mutual trust and confidence…[iv]
  • … and is equivocal about whether my employer owes me any duty of good faith.

How are we doing so far? We might consider that we’d do better relying on a duty of good faith to the extent to which it has received some recognition in Australian commercial law. But let’s keep going…

  • I might not wish to subject myself to an employer’s vaccination and other health mandates that are based on its power to command and my duty to obey what a court considers to be the employer’s reasonable and lawful directions. [Please note: I am not advocating an anti-vax position. Do I need to say that?]
  • I might not wish the privacy of my personal information to be denied under the so-called “employee record exemption” in the Privacy Act.[v]
  • I might not wish to be subjected to an employer’s power of control over my conduct outside the workplace.
  • I might not agree with my employer’s position on matters of sustainability, politics, human rights, gender etc.
  • I might have a philosophical, ideological or religious objection to being the employee of my boss.

And now, some more positive reasons…

  • I might wish to maintain a greater measure of control over what work I do and how I do it.
  • I might wish to maintain a measure of control over where I work (eg. from home) and when I do it.
  • I might wish to preserve my intellectual property and not have it automatically vest in my employer.
  • I might wish to have the assurance of small business standard form contract fairness protections in the Australian Consumer Law.
  • I might wish to have the Independent Contractors Act assurance of protection against harsh and unfair terms.
  • I might wish to collectively negotiate terms for the supply of my services under small business class exemption protections of the Competition & Consumer Act.
  • I might want a labour hire agency to help find work for me with its clients, without being subservient to it merely because it has agreed to help me.[vi]

You might be able to think of some more. But perhaps there’s enough there to at least fairly ask the question.

It’s a shame, really…

It’s a shame that one would need to go to these lengths and raise these objections to avoid becoming an employee against one’s wishes.

In his dissenting judgment, Steward J in Personnel Contracting pointed out:

In 2005, the House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation published the result of its inquiry into “independent contracting and labour hire arrangements”. The Standing Committee noted that the growth in “independent contracting and labour hire employment” had “clearly” indicated that it had “become a preferred employment choice for many Australians”. It also observed that “over 10 per cent of the workforce” at that time identified themselves as being “independent contractors across a wide variety of industries”.[vii]

That percentage has likely increased significantly by 2022 with the growth of the gig economy.

His Honour went on to trace the history of the development of the Independent Contractors Act 2006 (C’th), observing:

Section 3 of the Independent Contractors Act states that the objects of the Act include protecting “the freedom of independent contractors to enter into services contracts”; the recognition of “independent contracting as a legitimate form of work arrangement that is primarily commercial”; and the prevention of “interference with the terms of genuine independent contracting arrangements.”[viii]

Steward J, critical of the overturning of precedent which recognised the worker’s choice of status of an independent contractor, concluded that it will:

…potentially deny to workers a choice they may wish to make to supply their labour as independent contractors, thus possibly undermining one of the objects of the Independent Contractors Act.[ix]

In his Honour’s view, it was properly a matter for the legislative branch of government to consider. [x] And perhaps it is.

If nothing else, the government will at least have to deal with the spate of “double dipping” and award breach claims that will inevitably surface, now that a model for engaging workers that has stood for 30 years has been overturned.

Andrew C. Wood


[i] CFMMEU v Contracting Personnel [2022] HCA 1 per Kiefel CJ and Keane & Edelman JJ at paras [58] and [63]; Gageler & Gleeson JJ at para [127].

[ii] Interpreted in CFMMEU v Contracting Personnel to indicate employment by a combination of control and integration tests. See: Kiefel CJ, Keane & Edelman LL at paras [71] and [75]; Gordon J at paras [195], [196], [200] and [201].

[iii] Per Steward J (dissenting) in Contracting Personnel at para [204].

[iv] Commonwealth Bank of Australia v Barker [2014] 253 CLR 169.

[v] Privacy Act 1988 (C’th) section 7B(3).

[vi] See discussion of the evolving “labour hire subservience test” in related posts: Wood AC (2022) CFMMEU v Personnel Contracting: What did the High Court really say about the “own business” test; and Wood AC (2022) Constructing the ratio of CFMMEU v Personnel Contracting.  

[vii] Personnel Contracting at para [210].

[viii] At para [212].

[ix] At para [222].

[x] At para [222].

WorkAccord’s Autumn “Tuesday TalkAbout” Programme: Healthcare Workforce Recruitment & Staffing Focus

Autumn TT promoIn WorkAccord’s Summer series of Tuesday TalkAbouts, we introduced the concept of “waypoints” as those points on a journey where we can pause, take stock, and choose the direction we will follow for the next stage. As the COVID-19 pandemic response has rapidly escalated, it seems that we might have rushed through several of those waypoints and might now be asking, “What comes next?”

Many within the healthcare recruitment and staffing sector are experiencing a sense of considerable uncertainty, which may become costly. For some, it has been a case of having been so busy that there has not been time to reflect on what has happened. For others, things have gone unnervingly quiet.

In our Autumn series of Tuesday TalkAbouts, we will be looking at points of continuity and change for healthcare recruitment & staffing professionals and asking, “What does it now take to be Leaders in the World of Work?”

We will also be working throughout this series to develop the Tuesday TalkAbout format to provide participants with an enhanced range of on-line/off-line and synchronous/asynchronous learning opportunities and resources. We’ll be keeping the free on-demand webinars while developing the live sessions to provide more interaction and opportunity for discussion.

I’m delighted, therefore, to extend to all a warm invitation to participate in this exciting collaborative project.

Our Autumn programme of seven free webinars is outlined below.

1. Platforms (21/04/2020)

Our first Tuesday TalkAbout presents an “under the hood” look at Recruitment Platforms for Recruitment & Staffing Professionals.

What are they? Where do they fit in the classification of recruitment & staffing services? How do we “read” them? What are some of the opportunities and risks associated with their use?

2. A Healthcare Workforce that Nobody “Owns” (28/04/2020)

A healthcare workforce is a complex, multi-actor (multi-nodal) system that possibly nobody “owns”.

What are its governance challenges? What do these challenges mean for stakeholders, including Recruitment & Staffing Professionals aspiring to be Leaders in the World of Work? How can they engage more effectively with the workforce to enhance the value of the contribution they make?

3. Healthcare Worker Engagement Models (5/05/2020)

Healthcare worker engagement models come in many different forms.

What models of healthcare worker engagement are most relevant for Recruitment & Staffing Professionals? How can they distinguish between different models to choose the ones that are the most suitable? What challenges do procurement approaches pose to the successful engagement of health workers with their workforce? How can Recruitment & Staffing Professionals meet those challenges?

4. Aged Care Workforce Update (12/05/2020)

The Royal Commission Into Aged Care Quality & Safety has been running since October 2018.

What progress has been made so far? Who making submissions? What themes are emerging that will be significant for Recruitment & Staffing Professionals working in the Aged Care sector? What will happen next? And how can we make a submission?

5. Telemedicine & Recruitment (19/05/2020)

Social distancing measures under the conditions of the COVID-19 pandemic presented many challenges to the way we have traditionally thought healthcare and health workforce recruitment should be practised.

What are the consequences for healthcare workforce recruitment and for Recruitment & Staffing Professionals working in the healthcare sector? In this Tuesday TalkAbout we will review some of the current literature and take a look at some recent practice developments in the field of Telemedicine.

6. Collaborative Supply Models: Concept (26/05/2020)

Collaborative Supply Models or “Networks” may provide useful answers to many of the challenges presently facing healthcare workforce structure and governance.

What form could they take? What role might Recruitment & Staffing Professionals working in the healthcare sector play in their development? In this Tuesday TalkAbout, we’ll look at some of the collaborative supply or network models that have been developed and deployed in Australia and overseas. We will begin to explore how they might evolve to create new opportunities for Recruitment & Staffing Professionals responding to a disrupted workforce environment.

7. Collaborative Supply Models: Topical Challenges (2/06/2020)

In this Tuesday TalkAbout, we’ll build on the concept of a Collaborative Supply Model which we developed In the previous session for Recruitment & Staffing Professionals working in the healthcare sector. We’ll focus on four topical challenges:

  • Candidate connection & protection
  • Competition
  • Risk & liability
  • Governance

You can register for this webinar here.

Let’s talk again soon!

Andrew C. Wood

 

 

 

 

“Tuesday TalkAbout” Summer 2020 Program to Address Recruitment & Staffing Sector “Waypoints”

Tuesday TalkAbout takes a new direction for its Summer 2020 Program of free, short webinars, as we discuss some larger themes at work in the recruitment and staffing sector.

Now, I certainly don’t claim to be a seer or a futurist. I observe and interpret. So, I’m not going to attempt to predict the course of the decade or anything like that.

Instead, I’ll describe the “waypoints”, which I think the recruitment & staffing sector in Australia and New Zealand has reached in eight key areas. ‘

A “waypoint” can be understood as a place on a route or pathway, a stopping point, or a point at which one’s course can be changed.

What the future holds from that point forward largely flows from the decisions and commitments which recruitment & staffing professionals make for their own organisations and professional lives – either intentionally or by default.

The observations and insights that I hope to share reflect experience gained over four decades in legal and workforce consulting practice and in recent work done with RCSA, designing its new Code for Professional Conduct, its grievance intervention guidelines & protocols, its StaffSure certification program, and many of its key resources and templates.

The eight key areas we’ll be discussing are:

1. Professional Conduct (21st January)

RCSA’s new Code for Professional Conduct has been authorised by the ACCC to commence on 8 August 2020. How is it different from previous codes or other industry codes? Why is it different? What statement does it make about emerging professionalism? How might recruitment & staffing professionals respond to it? How is it enforced and administered?

This webinar has now been archived. Please contact me if you would like a link.

2. Quality Management (28th January)

What does “quality” mean in the context of the work undertaken by recruitment & staffing professionals as labour market enablers and intermediaries. Does the ISO 9001 definition of “quality” say it all? How well does the “customer focus” requirement stand up to the professional conduct responsibilities of recruitment & staffing professionals? Is quality perceived as outcome or experience? Is it even an either/or question?

This webinar has now been archived. Please contact me if you would like a link.

3. Risk Management (4th February)

We know (at least I hope we do) that risk is defined for the purposes of risk management and quality management standards as the “effect of uncertainty on objectives”. But how might risk be categorised to be more manageable for recruitment & staffing professionals? What sorts of risk do recruitment & staffing professionals face in 2020? At what points does risk intersect with professionalism and quality? How can risk be managed to minimise its effects on professional and quality objectives?

This webinar has now been archived. Please contact me if you would like a link.

4. Collaboration (11th February)

What is “collaboration”, really? Why is it important for recruitment & staffing professionals in 2020? Is collaboration possible with customers and clients? Candidates? Competitors? Consultants? If so, how is achieved? How is it managed and maintained?

This webinar has now been archived. Please contact me if you would like a link.

5. Doing Business (18th February)

Something is wrong if you’re not upgrading your terms of business at least as frequently as your mobile phone! Wonder why you’re getting pushback from clients who won’t pay you that “introduction fee”, or who won’t sign up to your “all-care-no-responsibility” conditions? Terms of business modelled on 1980s recruitment & staffing practices and 1980s legal culture are no longer viable. In this session, we explain why and talk about what you can do about that.

This webinar has now been archived. Please contact me if you would like a link.

6. Conflict & Dispute Resolution (25th February)

Even for those who might be energised by conflict, there comes a point when stocks of energy and finances to meet the crushing cost of feeding conflict, run low. What is your conflict/ dispute profile? Do you still handle business disputes like it’s the 1980s and you’re a bank? Or have you found a better way? What are your options in 2020? What distinguishes the way you handle conflict and disputes as “professional”?

View the recorded Conflict & Dispute Resolution “Waypoint” webinar here

7. Employment Shaping (3rd March)

What is the difference between legitimate employment shaping and sham contracting or avoidance? How much flexibility is there to shape an employment relationship to suit labour market conditions in 2020? What are the limits? How do you know if you are approaching or transgressing them? Are there any “golden rules”. If so, what are they and how do you apply them?

View the recorded Employment Shaping “Waypoint” webinar here

8. Independent contractor on-hire (10th March)

What are the main challenges to independent contractor on-hire in 2020? Is the business integration test still reliable? What investigations should a recruitment & staffing professional undertake to ensure that independent contractor engagement and on-hire models are compliant with a wide range of regulatory requirements and are not exploitative?

Register for the Independent Contractor On-Hire “Waypoint” webinar here

I do hope you’ll join me when WorkAccord’s Tuesday TalkAbout Summer Program returns at 8:30 am AEDT on Tuesday 21 January 2020 and I’d love to learn of any questions you might have in advance.

 

Andrew C. Wood

Industry Certification Schemes – Regulatory Alternatives?

TT_8 Cwertification Full

Can industry certification schemes be viable alternatives to statutory licensing schemes?

In WorkAccord’s next free Tuesday TalkAbout I’ll discuss different types of certification schemes and consider their pros and cons as regulatory alternatives. In doing so, I’ll also look at Regulatory Impact Statement that supported the Victorian licensing scheme to see how it worked. What assumptions were made? Were they correct? How might a federal RIS and outcome differ?

I hope you’ll join me.

Andrew C. Wood

 

Here’s what I’m thinking about: “Exploitation” and “Wage Theft”

“Exploitation” and “Wage theft” are emotive and pejorative terms that are used freely by commentators and policymakers calling for harsh penalties. But can any “breach of minimum employment standards”[1] count as exploitation?

Is an employer guilty of exploitation or wage theft for “not complying with the minimum legal entitlements of their employees”?[2] or is something more required to earn the badge of iniquity? Something that colours the non-compliance as misconduct or unconscionable?

What do you think?

Slide1

You’re cordially invited to come along and have your say in WorkAccord’s next Tuesday TalkAbout, on November 26, when we’ll be talking about “Modern Slavery, Exploitation and Vulnerable Worker Protections”.

I hope you’ll join me!

Andrew C. Wood

 

[1] The understanding conveyed by New Zealand MBIE’s Consultation Paper on Temporary Migrant Worker Exploration, Oct 2019.

[2] The understanding conveyed by the Australian government Migrant Worker Taskforce in its report, March 2019.

Here’s What I’m Thinking About: “Labour Supply Chains”

This is my first attempt at video. Please treat it kindly. I clearly need a director, hair and make-up!

Nevertheless, I do hope you’ll join me for our next Tuesday TalkAbout on 19th November at 8:30 am AEDT, when we’ll discuss LAbour Supply Chains.

Here’s a link to register for the webinar. it’s free and it’s live.

https://zoom.us/webinar/register/WN_wttK2Q2gS_eo1UfY2dIiOw

Andrew C. Wood

Post-Law, Code 5 and Change

Change yourself concept background

I’m looking forward to leaving the Law.

Yes, after more than 40 years as a student and practitioner, I’ll be retiring from legal practice at the end of this month. Some people have asked me, kindly, if I’ll be doing any “non-legal work” in my “retirement”. That sounds a bit doddery and even vaguely unlawful!  I prefer to think of what I’ll be doing as “post-law”.

Post-law aims to resolve conflict and build accord without recourse to law, legal rules, or legal processes. It links more to the pull of community and relationship than to the push of State and power. It finds affinity with social norms and professional standards rather than with tribunal processes and regulations.

In my case, a transition to post-law is prompted by critical attitudes developed in the informal justice movement over the years and draws together learnings from mediation, conflict resolution, and integrative practice.

My friends in the workforce enablement, recruitment, and staffing industries may be aware of recent work I’ve been doing to design industry codes, standards, and conflict resolution models that are kinder, more human-centred, and more values-informed in their pursuit of professional excellence than the legalistic, anti-competitive, and self-interested models that are often promoted as codes of “association ethics”.

The RCSA Code for Professional Conduct (“Code 5”), recently the subject of a favourable ACCC draft authorisation, is a project that is informed in many ways by post-law thinking.

It replaces a professional conduct regime that has been based on rules and punishments with one that is based on professional values and guidance. It is not written as an abridgment of selected laws (such as workplace laws, discrimination laws, consumer protection laws, or privacy laws) but as an articulation of professional values drawn from the principle of Respect for Persons and from Ethics of Care normative theory. It requires Members to adopt professional values personally and to embed them operationally in their organisations.

You might have seen the Current Affair item, aired on 27 May 2019, which reported on a Western Australian “recruiter”, who was caught on the telephone speaking in a derogatory manner about a candidate, after having “stalked” the candidate via her social media account. The recruiter declined to proceed with the candidate because of what she found in her Facebook profile…or so the story goes.

You can view the Current Affair item here:

https://www.9news.com.au/national/a-current-affair-facebook-photos-cost-job-opportunity-claim-young-woman-voicemail-latest-news-australia/c673d680-cfd0-4f67-b12a-116f913f5e96

For her part, the recruiter attempted to deal with the media confrontation with as much grace as she could muster, given the embarrassing circumstances in which she found herself.

Industry stalwart, Ross Clennett was asked to comment as an expert recruiter (impressively as always) and several lay people offered their views – mostly amounting to “it’s unfair” or “it’s discrimination”.

What intrigued me – and I think it’s worthy of comment in this context – was that “unfairness” and “discrimination” are both claims-based concepts, which rely heavily on legal rules and procedures. And as far as the legal rules go, a claim of unfairness or discrimination might not be compelling in these circumstances.

There would be some evidence of indirect discrimination on the grounds of gender if the recruiter’s stalking of social media accounts were limited to the accounts of women candidates. But that seems to lead to a bit of a dead end in this case.

There might also be some issue about privacy. But the gravamen of the complaint is not so much that the information was collected, as the way in which it was used – or more specifically the adverse judgments that the recruiter made based on the information collected and the hurtful discussion that was overheard to take place between the recruiter and her colleagues.

Law states a rule, proves a breach and then looks for a remedy.

A post-law approach might ask a question – “What is the right (or professional) thing to do here?” And then looks for a pathway to the “right” or “professional” outcome.

There is a place for both, of course. And although post-law seeks outcomes that are within law  (i.e. they are lawful), its outcomes are not achieved by law.

That is why I think that a code, which can frame conduct – not as unfair, discriminatory, or a breach of privacy; but more accurately as “unprofessional” – provides a superior framework, in many circumstances. The conduct which was portrayed in the Current Affair programme is unprofessional precisely because it fails to demonstrate the respect and care due to candidates – respect and care, in the case of RCSA’s new code, providing the two broad ethical systems that inform Code 5 and its statement of professional values.

Strip away legal arguments about whether there has been unlawful discrimination, actionable unconscionability, or breach of privacy (with all its uncertainties about where the boundaries lie), and you’ve got a simple issue – Did the recruiter act professionally? That question is not so hard to answer.

And once it has been answered, the remedial and corrective pathways – freed of technical defences – provide, in my opinion, vastly superior means of achieving satisfactory outcomes that seek, not punishment and compensation, but improvement of professional standards and remedial conduct according to a standard of restorative justice that is “becoming of a professional member” of an industry association.

In many ways, that is quite close to what I mean when I say I’m retiring from legal practice to take up “post-law” practice.

But it doesn’t mean I get to go fishing… just yet.

For me, it means moving away from a model of legal practice that I’ve become familiar with over four decades to embrace a different model with new challenges.

I’ve said to a few people that I’ll be spending my time resolving disputes rather than agitating them. But, perhaps more accurately, I’ll be working with people to help them to find ways of solving their own differences.

I’ll be developing and encouraging the potential for professional self-regulation within the workforce enablement industry – meaning behavioural self-regulation in accordance with professional values, rather than the “closed shop”, anti-competitive type of industry self (interested) regulation that is often passed off as a code of ethics.

And, through learning design work with WorkAccord and through private research, I’ll continue to explore the field of knowledge that must still be mastered if there’s to be hope for emerging professionalism within a post-law environment.

So, I’m not actually “leaving the building”, as they say. I’m just moving to a different floor. Maybe one that’s a bit closer to the ground.

 

Andrew C. Wood

 

Three States of Accord (and its Opposite)

Close up of Business people shaking hands, finishing up meeting, business etiquette, congratulation, merger and acquisition conceptMuch of my work, when I am rehabilitating parties’ terms of business,  requires me to reflect on the nature and quality of their agreement (and its opposite). We are often taught that agreement is good and that disagreement or conflict is bad. However, adopting an accord-centred approach, it seems possible to reflect a little more deeply.

Accord =   the relational aspect of agreement. Often overlooked in traditional contract making, it represents the heart and spirit of the parties’ agreement – their shared and separate hopes – the ‘what’ and the ‘why’ of their commitments in ways that also authentically represent the “who”.

Discord = active disagreement, often manifesting in open conflict and disputes – but sometimes containing the potential for accord in narratives thickened around threads of the “absent-but-implicit”.

Dys-cord = unhealthy agreement, the illusion of agreement, often reflecting power imbalances – may represent the compromise that everyone is unhappy with – might also represent the type of “one-up” approach to contract-making and negotiating that tips the parties towards conflict and bickering over the contract at the first upset. Although dys-cordant agreements can be legally enforceable, they often leave the parties with a lingering sense of discontent and distrust that may lead to non-co-operation and eventually undermine their true “loyalty to the bargain”. Dys-cordant agreements are inclined to “leave value on the table” – especially intangible value.

I wonder how much of what passes for agreement is something less than true accord? And how, as collaborative lawyers, we can use our skills to help our parties resolve discord and make healthier agreements.

Andrew C. Wood

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

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