The Recruiters’ Casebook and WorkAccord Get Together for a Free Short Webinar Series

The Recruiters’ Casebook and WorkAccord are getting together to present two free webinars as they test their new webinar platform.

We’d love you to join us and give us your feedback.

Webinar 1

Competition & Consumer Law Brief – The New Playing Field.

Friday, 21 September 2018, 10.00 am to 10.30 am AEST.

Modern Universal Business Concept Icon SetAs job-based employment seemingly evolves toward job-based entrepreneurship in the freelance, contracting and gig economies, it’s becoming increasingly important for recruitment, contracting and staffing businesses to keep up to date with competition & consumer law developments that impact their sector and their incorporated workers.

In this free session,  Andrew C. Wood will present a short briefing to business owners & managers, consultants and contractors about the role of the ACCC in creating and supporting a fair and level playing field.

Andrew will cover the following topics:

  • Authorisations and protective notifications
  • Banning orders, penalties & remedies
  • Cartel prohibitions
  • Collective bargaining and the proposed small business class exemption
  • Misleading job ads
  • Statutory guarantees and unlawful attempts at exclusion
  • Unconscionable conduct
  • Unfair standard form, small business contracts
  • Unsolicited services (and claims for payment).

Register Now

 

Webinar 2

Transaction to Transformation

Friday, 28 September 2018, 10.00 am to 10.30 am AEST.

Modern Universal Business Concept Icon SetThe “factory model” of services production and supply, based on efficiency in repeating similar transactions has been disrupted by Artificial Intelligence. Astute suppliers in the recruitment, contracting & staffing industry are already talking about a major shift from transaction to transformation.

But what does that look like? How is it managed? How is progress measured? How is it supported by business models and the terms and conditions that underpin them? And is the transaction still important?

In this free introductory level webinar that has been designed for recruitment, contracting & staffing agency business owners and managers, we will begin to explore some of these questions and set a pathway for future discussion.

Register Now

Please send a shout out to your friends and colleagues. We look forward to seeing you there!

MegaMan

 

Andrew C. Wood

Collective Bargaining in the Freelance, Contracting and Gig Economies

Young people work in modern office.As job-based employment seemingly evolves toward job-based entrepreneurship in the freelance, contracting and gig economies, we may soon witness the emergence of new models of workforce organisation and worker representation. That is, if the ACCC’s plan to grant a class exemption allowing small businesses to bargain collectively with their customers and suppliers goes ahead.

Collective bargaining, in this context, involves two or more competitors getting together to negotiate with a supplier or customer (the “target”) about terms, conditions and/or prices.

It is distinguished from bargaining under the Fair Work Act in that the parties who get together are not employees; they are actual business competitors.

They include many contractors and freelancers, working in the on-hire and gig environments.

They may be technology contractors, medical locums, project managers, professional science & engineering contractors, designers & creatives, book-keepers, contract cleaners, contract logistics operators, or translators.

Indeed, they may be any small business that undertakes professional, skilled, or trade work that is done by workers who perform their work in, and as part of, their own businesses.

Recruitment, contracting, and staffing agencies would therefore do well to follow this new development closely; and begin to think about the challenges and opportunities that the ACCC’s proposal presents.

For example, what might an on-hire or IT contracting agency expect from a scheme that allows a pool of  its IT contractors to bargain collectively with it on price, terms and conditions of engagement?

Who might represent them? Should the current restriction on trade union representation apply? If it did, might we witness the emergence of contractor “guilds” that would be able to operate outside the Fair Work bargaining framework?

How might the ACCC’s concept of joint procurement bargaining play out, if it allowed that same pool of IT contractors to bargain simultaneously with their IT contracting agency and its clients?

What might small recruitment agencies, working in the creative or medical locum industries, gain from being able to bargain collectively with clients on price, terms and conditions of supply – without the need for any notification or authorisation?

What might the competition impact be on medium and larger businesses, who fall outside the scope of the class exemption; or who may be the targets of collective bargaining?

How might the role of industry associations develop to support members looking for collective bargaining resources and solutions?

These are just a few questions that recruitment, contracting, and staffing agencies (and their industry associations) might now be asking. No doubt there are many others.

The ACCC would like to hear about them by 21 September 2018.

 

Andrew C. Wood

Will your outsourced payroll arrangements alter your requirements to have a labour hire license? Probably not.

As attempts by Australia’s labor states to create a multi-jurisdiction, labour hire licensing scheme gain critical mass, it is becoming more important, and perhaps a little easier, to make comparisons and ask questions at a practical level rather than merely at a policy or ideological level.

One such question, which seems to be causing concern amongst industry participants, relates to the involvement of payroll providers in labour hire arrangements. Kudos, therefore, to the industry participants, who have appreciated the detail and complexity of the legislation well enough to formulate the following question:

Will our outsourced payroll arrangements alter our requirements to have a labour hire license?

The answer is, “Probably not”.

Let’s say you provide labour hire services – i.e. you engage a worker and supply that worker to another person (a host) to do work.

Your engagement of that worker creates an obligation – and it’s your obligation – to pay your worker for her or his work. You can’t escape that obligation by entering into a pay-when-paid-by-client arrangement. And, importantly, you can’t escape it by outsourcing your payroll function to a third-party payroll provider. It’s still your source obligation; and it is sourced in the work/wage or work/remuneration bargain that you made with your worker.

Neither, in most cases, can you transfer your worker to the payroll company. As the High Court has reminded us:

No worker is an asset in the employer’s balance sheet to be bought or sold.

So, whilst ever you continue to engage the worker, you have a payment obligation – even if a payroll company is going to perform it for you.

Now, I’ve heard it suggested from time to time, that terms and conditions of appointment of a payroll provider often attempt to shift responsibility for engaging the worker onto the payroll provider. They might say something like:

 You, the payroll provider, agree that you employ the worker and are responsible for all employer obligations.

In my opinion, you will have to be especially careful if your terms of business say anything like that – and that’s so regardless of whether you are the payroll provider or the labour hire provider.

The work/wage or work/remuneration bargain is made between the engager and the worker. It’s not something that you can transfer on paper – even if you have a paper consent from the worker and payroll provider – because the paper transfer and consent might not reflect the reality of the situation if it’s actually you, who continue to supply the worker to your client and are getting paid for it.

Even though there may be some very limited circumstances in which you could successfully transfer a worker’s engagement to a payroll company, it may still be important for you to ensure that you have a licence.

Remember, you can’t transfer a worker whom you haven’t first engaged. How did the worker become engaged with you in the first place? Did you advertise, or hold out that you were willing to provide labour hire services? Under all three state schemes, you must not advertise or hold yourself out as willing to provide labour hire services unless you have a licence that is in force.

If your attempt to appoint a payroll provider is designed to circumvent or avoid an obligation imposed upon you by the labour hire licensing legislation, you may also have committed an avoidance offence. Your client, and indeed your payroll provider, may be obligated to report the attempt as an avoidance arrangement under the reporting provisions of the legislation.

If you DO successfully transfer the worker to the payroll company, remember:

  • It’s probably not just the payroll function that you have transferred – it’s likely to be pretty much the whole show; and it might be difficult to know what your client will be paying you for.

Ask yourself: Are you still providing what you agreed with your client you would provide? If you’re no longer providing what you agreed with your client to provide, you might find that your agreement with your client (including its terms and conditions) will be swept aside by a court, as happened in Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd.[i]

  • Perhaps you’re being paid a type of pay-as-you-go placement fee and you’re really acting in the role of a private employment agent (PEA) providing placement services.

Ask yourself: Do your terms of business support that characterization of your arrangement; and do they accurately reflect the arrangement?

  • Even if that is the case, you may still require a labour hire license if, as a PEA, you are doing anything more than merely providing a recruitment or placement service.

For example: If you are arranging safety inductions, PPE,  accommodation,  transport, message handling to coordinate worker attendance at the worksite etc, you will not have the benefit of the private employment agent exception under the Queensland and South Australian legislation; and you may be caught by the extended coverage provisions in the Victorian legislation that relate to PEA’s, who arrange accommodation; or Contractor Management Companies, who recruit and place independent contractors.

  • You may also require a PEA licence in those states and territories that still have them.

Ask yourself: Do you need and do you have a PEA licence?

  • Your arrangement is likely to convert the payroll provider into a labour hire provider if the payroll provider now has to supply the worker to the user or “host”.

Ask yourself: Does your payroll provider have a labour hire licence? If not, you may need to consider whether you have an ancillary liability arising from placing workers with unlicensed labour hire providers. The ancillary liability penalties can be as severe as those imposed upon the principal offender.

  • You may have made a type of split placement – i.e. you have placed the worker operationally with the host, but administratively with the payroll provider. In doing so, you may have implicated your client in the offence of dealing with an unlicensed labour hire provider if either you or your payroll providers are unlicensed.

If your attempt to transfer the worker to the payroll company was NOT effective, – and there may be a number of reasons why it will not be effective – then you would clearly remain the labour hire provider. You will need a licence – even though the payroll provider is paying the worker.

The interactions between payroll arrangements and the coverage and avoidance provisions of the labour hire licensing legislation are complex and are affected by nuances in definitions, exclusions and extensions. That will mean that payroll providers (and labour hire providers) will need to exercise special care to understand the effects of a transfer of payroll responsibility from a labour hire provider. They will need to be thoroughly familiar with the legislation and will need to scrutinize the terms and conditions upon which the transfer of payroll responsibility takes place.

But wait! There’s more…

So far, we’ve only been discussing the situation where a labour hire provider appoints a payroll provider. There’s also the possibility that the payroll provider might be appointed by the client (host) or even by the worker. There’s the additional possibility that the payroll provider is, in fact, the worker’s own incorporated entity. That’s a whole other story!

Teacher 3

 

 

Andrew C. Wood

 

[i] [2015] FCAFC 37 per North and Bromberg JJ at [paras 215 to 218].

This is an opinion piece intended to promote public discussion. It is not, and should not be relied on as legal advice. If you do want legal advice, please seek it from a lawyer, who is familiar your industry and with the laws that apply in the jurisdictions where you carry on business. Your industry associations or local Law Societies may be able to help you to find professional legal advisors, who can assist you.

 

Victoria Introduces its Labour Hire Licensing Bill 2017…and cracks are starting to show.

Victoria’s Labour Hire Licensing Bill 2017, introduced into State Parliament on 13 December, is the third labour hire licensing scheme introduced this year as part of a labor State push to establish a common pattern of labour hire licensing regulation.

South Australia’s Labour Hire Licensing Act 2017 is set to commence on 1 March 2018.

Queensland’s Labour Hire Licensing Act 2017 is set to commence on 16 April 2018.

Victoria’s Labour Hire Licensing Bill 2017, if it is passed, has a proposed commencement date of no later than 1 November 2019, but may be proclaimed earlier.

Despite hopes of establishing a common scheme, cracks are starting to show.

Some of the cracks may be smoothed over by regulations that have yet to be released for comment in South Australia and Queensland. Others may be smoothed over by administrative fiat in those States that are intending to create an administrative power to grant various exemptions (S.A. and Vic).

Some cracks may be smoothed over by accommodating mutual recognition arrangements; and some might only be smoothed over by legislative amendment.

Furthermore, detailed analysis of the legislative schemes reveals some glaring gaps – e.g. the failure to regulate substitutable workforce contracting services; and some apparent inconsistencies – e.g. the inconsistency created by regulating only the supply of a worker where the work is done in and as part of the host/client’s business whilst simultaneously extending the definition of worker to include independent contractors. The issue, here, is that genuine independent contractors perform their work in and as part of their own businesses.

Many of these issues will only come to light when the legislation is tested in the course of prosecutions and licence decision reviews and appeals. Nevertheless, it is worthwhile to to take note of them – especially for businesses that operate across state borders or may be relying on interstate advice – and bring them into the  field of public and industry dialogue.

A good place to start might be a side-by-side comparison of the main coverage provisions of the three state schemes – as far as we know them at this stage, without the benefit of regulations and with the Victorian Bill still awaiting its second reading debate.

So, I’ve had a go at representing some similarities and differences in table format. To do it, I’ve had to standardise some of the terminology. I’ve opted for:

Provider = the person who needs the licence;

Worker = the person who performs the work;

User = a person who takes the benefit of the supply of a worker for the performance of work.

The “user” terminology was the most difficult to arrive at. In the Queensland and South Australian Acts, this party is usually referred to as “another person”. Victoria uses the expression “host”. Both of those terms are problematic in their application to labour contracting chains, where several layers or tiers of supply are involved; and the nature of the services being supplied up the chain may switch between labour hire services and sub-contracting services before reaching the point where the work is actually performed.

I’ve therefore opted for the “user” terminology because it applies to labour contracting chains operating through intermediate users to an end user. However, to my mind, the term remains problematic because of the possibility of confusion with user models of gang-mastery that are regulated under the UK Gangmasters Licensing Act but have so far escaped attention in Australia.

Using my standardised terminology, one could say that common to all Australian schemes is the proposition that:

A person is a labour hire provider (provider) if, in the course of conducting a business, the person supplies a worker to another person (user) to do work…

At that point, the schemes begin to diverge around details of:

  • situational application – e.g.whether in and as part of the user’s business;
  • additional coverage;
  • exclusions; and
  • worker definition.

The table represents my attempt to illustrate these points of departure. To read it click  here or on the link below.

https://recruiterscasebook.files.wordpress.com/2017/12/qld_sa_vic-comp_cov.pdf

The expression, “c.f.”, where it is used in the table, indicates that a comparable outcome is achieved by slightly different means.

I’d love to learn of your thoughts and comments.

Businessman & Newspaper

 

 

Andrew C. Wood

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

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

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!

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

JJ Richards & Sons Pty Ltd admits it’s time to take out the garbage.

Last month, I wrote that recruiters, who use standard form terms of business, might take note that the Australian Competition and Consumer Commission (ACCC) has started taking court action to enforce the unfair terms in standard form small business contracts provisions, which were introduced into the Australian Consumer Law in November last year.

One of the companies against which the ACCC took action was JJ Richards & Sons Pty Ltd, a large privately owned waste management company (JJR & Sons). ACCC v JJ Richards & Sons Pty Ltd [2017] FCA 1224 (13 October 2017). The case moved forward very quickly, seemingly with JJR & Sons admirable co-operation.

On 13 October, JJR & Sons admitted that each the following terms in its standard form waste management contracts caused a significant imbalance in the parties’ rights and was not reasonably necessary to protect its legitimate interests.

  • Automatic renewal;
  • Unilateral price variation (after notice);
  • Agreed times (for waste collection – best endeavours but no liability);
  • No credit without notification (JJR & Sons charged customers if they attended for waste collection but were unable to gain access, etc);
  • Exclusivity (customer not to engage another waste removal firm);
  • Credit terms (entitlement to suspend services with no corresponding right to withhold payment for failure to provide services);
  • Indemnity (wide ranging hold harmless provision); and
  • Termination (clause preventing customer from terminating whilst payments outstanding).

As a result, the Federal Court of Australia held that each of the impugned terms was void and imposed orders (by consent):

  • restraining JJR & Sons from relying on the impugned terms;
  • restraining JJR & Sons from using standard form contracts containing an impugned term;
  • requiring JJR & Sons to publish corrective notices;
  • requiring JJR & Sons to provide a copy of the Court’s orders to each person who was a small business that entered into one of the impugned contracts after 12 November 2016. (There were 26,000 contracts. It will be up to JJR & Sons to work out how many of them were with customers, who employed fewer than 20 persons – i.e. were “small businesses”!); and
  • requiring JJR & Sons to establish an Australian Consumer Law compliance program to be undertaken by each employee or other person involved in its business. who deals with Australian customers in order to minimise the risk of future reliance on unfair terms.

Many recruitment, contracting and staffing services providers might be aware of similar terms to those that were impugned in this case. Hopefully, they won’t be in their own terms of business because they will have taken the opportunity over the last twelve months to have them reviewed. If they haven’t, then perhaps … it’s time to take out the garbage!

Publication1

 

 

 

Andrew C. Wood

ACCC taking action to enforce new unfair business terms laws

locked-into-contractRecruiters, who use standard form terms of business, might take note that the Australian Competition and Consumer Commission (ACCC) has started taking court action to enforce the unfair terms in standard form small business contracts provisions, which were introduced into the Australian Consumer Law in November last year.

Two proceedings have now been commenced in the Federal Court, where the ACCC is seeking declarations that some standard terms are unfair and void, together with injunctions, publication orders, compliance program orders and costs.

One proceeding is against Servcorp, a large provider of serviced office facilities; the other is against JJ Richards & Sons Pty Ltd, a large privately owned waste management company.

Amongst the business terms coming under attack are:

  • terms binding customers to subsequent contracts;
  • terms permitting unilateral increase in prices;
  • indemnity or hold harmless terms;
  • exclusivity terms; and
  • terms permitting one party to unilaterally determine whether the contract has been breached.

Frequently, terms such as these reflect an approach to contract drafting that was considered “smart practice” in the past. But that approach will need to change under the influence of consumer law and demands for more sophisticated relational contracts.

It will be interesting to see how the proceedings unfold and what future actions the ACCC may take, having indicated, last year, that the contracting sector is one of the sectors that it is targeting.

 

 

 

Andrew C. Wood

Who’s in charge? Independent contractors and the unfair terms in small business contracts reforms.

On 12 November 2016, what has been described as “the single biggest change in the way Australian enterprises do business for decades.”[1] took place.

Judging from the lack of registrations at one industry association workshop[2], there may be reason to think that it might have passed in some sectors of the recruitment and contracting industry without too much notice[3]. That is a pity because, amongst the seven industry sectors that the ACCC has been viewing closely as it prepares to administer the reforms, is the independent contracting sector.

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The Unfair Contracts Legislation: Threat, Challenge, or Opportunity?

Now that we have passed 12 November 2016, when the unfair terms in standard form small business contracts reforms commenced, recruitment, on-hire and contracting agencies might consider how they can adjust to the changes; and might ask themselves whether the changes present a threat, a challenge, or an opportunity. They might be all those things. And, for a few, they might also be an invitation to do something amazing.

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