Red Tape, Regulation and Union Interference leads to disastrous Labour Hire Bill

Friday 8 September, 2017 | By: Kate Whittle

The Labour Hire Licensing Bill 2017 that was passed in Queensland Parliament yesterday is a prime example of poorly thought through, rushed legislation that will have massive unintended consequences for employment and jobs growth in Queensland. 

CCIQ wholeheartedly supports initiatives to protect vulnerable workers from exploitation. However, the new labour laws enact catch all licensing scheme, when it is only in certain sectors that there is concrete evidence to support the assertion that exploitation of vulnerable workers is taking place i.e. the horticulture industry. 

CCIQ believes the State Government’s one size fits all approach is completely misguided government overreach, and as a result, forces unnecessary regulation and red tape on compliant firms when there has been zero evidence produced that labour hire has been exploitative in sectors of the workforce it is utilised outside of horticulture. 

CCIQ is strongly opposed to a broad-based labour hire licensing scheme, and views this as another example of the union movement driving government policy, to the detriment of the small businesses of Queensland doing their best to fill skills gaps, and create opportunities for Queenslanders. 

Labour Hire catch all’ ignores compliant firms, international best practice and is bad law 

The new labour laws are so broadly drafted that its aim is to capture all labour hire practices across Queensland, as opposed to a sectoral approach to apply to those industries where exploitation has been found to have occurred (as has been introduced in the UK for example). This is essentially a licensing scheme requiring every single labour hire firm in Queensland to jump through a series of bureaucratic hoops to provide jobs for Queenslanders. 

The new laws will fail to protect all workers from exploitation and will not stamp out the poor practices of criminal and rogue labour hire firms. It will not for example cover contracting and, as a result will leave a huge loophole for workforce contracting firms in the horticulture sector.

This is bad law that will undermine business confidence and will reduce job creation within the StateAs a restrictive licensing scheme, it over regulates an entire sector and throws up numerous unintended consequences that will further dent the confidence of employers and businesses in Queensland.

Effective safety net under existing employment legislation 

Within the modern award system under the Fair Work Act (FWA), labour hire companies are subject to the same legal obligations as employers with respect to the National Employment Standards (NES) conditions, entitlements, and protections of people in their employ via a labour hire agreement.

Further, it is not solely the FWA that regulates employment in Australia. The protection of temporary or other employees also occurs through the following legislation:

a. Anti-Discrimination Act 1991 (Qld); 

b. Criminal Code 1995 (Qld); 

c. Competition and Consumer Act 2010 (Cth); 

d. Independent Contractors Act 2006 (Cth); 

e. Industrial Relations Act 2016 (Qld); 

f. Migration Act 1958 (Cth); 

g. Superannuation Guarantee (Administration) Act 1992 (Cth) and the Superannuation Guarantee (Charge) Act 1992 (Cth); 

h. Tax Administration Act 1953 (Cth); 

iWorkers’ Compensation and Rehabilitation and Other Legislation Amendment Act 2015 (Qld); 

j. Work Health and Safety Act 2011 (Qld); 

l. Further Education and Training Act 2014 (Qld).

CCIQ is of the firm position that labour hire in Queensland does not pose a unique set of challenges beyond the capacity of existing legislation to provide an effective safety net. 

Greater regulation of the labour hire industry would impose significant additional costs on already compliant firms. Imposing another layer of ‘one size fits all’ regulation on businesses in Queensland would be a counter-productive measure towards achieving job creation and economic growth. 

CCIQ believes the new labour laws will add to an already significant compliance environment for employing businesses, thereby undermining job growth. 

Benefits of non-standard forms of work to a modern economy

A modern and dynamic 21st century economy requires a flexible and adaptable labour market. The decline in income generated from the resources sector has not yet been effectively offset by growth in other sectors, highlighting the fact that Queensland and Australia’s economy are facing a time of significant transition.

Additionally, the ongoing growth in service sector industries, predominately in response to the growing Asian middle class and the strength and reliability of Australia’s tourism industry indicates that a significant proportion of the jobs of the future will be primarily in the service sector.

Such industries no longer operate in a 9am-5pm, Monday to Friday paradigm, typically responding to consumer demand and increasing global interconnectedness by operating on a 24/7 basis. Additionally, technological changes have never been as advanced or disruptive than at present, thereby changing consumer expectations with respect to the delivery of products or services.

Because of such significant transitions in Queensland and Australia’s economy, the nature of work has changed in the modern economy. More flexible types of employment have become an established part of the economy, with independent contractors, labour hire, and casual employees now comprising around 40 per cent of the total workforce.

Although permanent forms of employment remain in the slight majority throughout Australia’s workforce, businesses operating in a modern and dynamic 21st century economy with greater global market connectivity require higher levels of labour market flexibility and adaptability; and these needs are being met by the type of flexible and temporary employment arrangements that is offered by labour hire.

For example, businesses in the service sector operating in key industries such as tourism, retail and hospitality must be able to respond to varying demand, while businesses operating in high-skill high-wage sectors, such as information communications and technology must be able to compete. Across the spectrum of Australia’s workplace landscape, businesses in the new economy are undoubtedly benefiting from the type of flexible and temporary employment offered by labour hire.

Regrettably, non-standard forms of work are often described deleteriously by unions as ‘insecure’ and ‘precarious’. Indeed, some commentators will no doubt perceive all forms of work performed outside of a ‘permanent employment relationship’ as a one-sided bargain favouring the employer.

CCIQ argues that this perspective towards non-standard forms of work is excessively negativeFurther, people employed in non-standard forms of work are highly heterogeneous, with such jobs suiting people’s circumstances well and often acting as stepping stones for more secure work.

According to the Productivity Commission, most of non-standard work is causal employment, with labour hire and subcontracting rare in most industries. As evidenced in the above table, labour hire employees make up around only one per cent of the workforce.

Notwithstanding that such forms of employment are not the “norm”; non-standard forms owork such as labour hire play a critical role in ensuring a flexible and productive workforce. This also highlights the need for recommendations to be proportionate to the size of the sector and the number of workers at risk of being adversely impacted.

In a dynamic economy where varying types of people will work under an assortment of arrangements, whether as an employee or through self-employment, it is regressive for this government to continue to craft employment policies that position temporary and flexible working arrangements as inferior. This has the unfortunate consequence of relegating such types of employment as unproductive and uneconomic, which is quite simply not the case.

Governments looking to further regulate the employment relationship through the imposition of stronger regulatory oversight of the labour hire industry are out of step with the changing demands of Australia’s workforce.

It is unfortunate when governments talk good game about jobs and growth and then introduce poorly thought through legislation that only serves to undermine their mantra. 

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