Labour Hire Licensing (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 26 September 2019.)

The Hon. I.K. HUNTER (17:03): I rise today to speak against the government's appalling and disgraceful plans to remove important protections for vulnerable South Australian workers engaged through labour hire firms in a range of industries. After a failed attempt to repeal the Labour Hire Licensing Act 2017, the Marshall government is at it again.

The original act was introduced by the former Labor government in response to blatant worker exploitation by some unscrupulous labour hire firms. The amendments before us today are yet another attempt to remove fundamental elements of the act that are essential to protecting workers and businesses from dodgy labour hire operators.

To understand why the licensing scheme was established in South Australia, we need to go back to when the Labour Hire Licensing Act was introduced. In 2015, an ABC Four Corners report aired allegations of exploitation and underpayment of workers employed around the country. This included two companies in South Australia.

Premier Weatherill then asked the parliamentary Economic and Finance Committee to investigate the labour hire industry to see what could be done. The inquiry heard about underpayment of wages, harassment and the poor treatment of workers, and a report was then handed down by the committee in October 2016. To provide a quick recap of the process, 13 submissions were received by the committee from government departments, industry and trade unions.

As part of the consultative work that the committee undertook, members travelled to the Riverland region and visited several companies that employ labour hire workers. The committee heard firsthand about issues involving labour hire firms and illegal phoenix activity. This is a practice of shutting down a company and opening another company, running away from obligations to creditors, including other businesses, workers and the Australian Taxation Office. I think that practice, by any other name, can only be called theft.

Inquiries were also held by the federal, Queensland and Victorian governments. All came to the same conclusion that we need a licensing scheme. I am pleased to say that, as a result, labour hire licensing schemes operate in Queensland and Victoria. We understand that the federal government also wants a scheme but is yet to provide a timetable of when we are likely to see that legislation put forward. In the absence of a federal scheme, we need to ensure that the current laws are given a chance to work.

This brings us to the current legislation and the amendments. Part 2, clause 4(2) states that this is to apply within high-risk sectors. First of all, we need to address the concept of high risk. Why does the government believe that the act requires such a narrow scope of what it deems as high risk? This will essentially create two classes of workers: those who receive protection from exploitative behaviour and those who do not.

Let's remember that this act was not in force for some time and was intentionally ignored by Consumer and Business Services, with the blessing of the Attorney-General, until a repeal bill was brought forward and then rejected by this place. In fact, enforcement of the penalties can potentially begin this month should the government desire it. We are not talking about a new bill: this original bill passed both houses in 2017 and is only just up and running at this late stage, this month. This is because of all the uncertainty that the government created and injected in this place by trying to bring in another piece of legislation, which then, as I said, failed.

The legislation as it currently stands has not yet had a real chance to work in the field. If the legislation had been enforced and a labour hire system established, we would have valuable data of its operation that would allow us to see how the system is working. I would like to commend the house and particularly the crossbench for rejecting the repeal bill last time with the intention of allowing this important legislation to work, to observe it in practice. I again ask the crossbench to consider their reasons for rejecting the previous bill and to reject the current one before us. I ask them to stick with the plan and allow the scheme to work as it was originally intended before we start fiddling with its operations.

I remember that, during the repeal bill's speeches, those opposite were saying that industry, specifically the South Australian Wine Industry Association and others, was for the repeal bill. I can now advise the house and those opposite that I am advised that those organisations are not in favour of the current changes to this bill. The South Australian Wine Industry Association (SAWIA) and other organisations have called the office of the shadow attorney-general saying that they are not in favour of these amendments.

I assume that the government will listen to the representations from these organisations now—they had not earlier. In fact, many of these organisations have very politely asked the opposition to make sure that the current legislation is left in place to be able to work. They rightfully point out that hospitality and construction are omitted from the legislation under these proposed amendments, just to mention a few areas.

As I said earlier, it therefore sets up two classes of workers. One wonders how that can be particularly easy to administer. Who, then, wants these changes that the government is proposing once again? I am not sure whether we can pinpoint anybody. These amendments smack of an ideology-driven obsession to get into the workplaces and remove protections from workers, particularly those protections that workers have fought hard for for many years.

If we were covering other policy areas in the same way as is proposed in this legislation, we would divide people or organisations into high-risk and low-risk categories. For example, let's have a look at driver's licences. Perhaps we could propose that low-risk drivers, those who have not had an accident in 10 years, should not have to worry about registering as drivers. Whereas, those who have had accidents, high-risk drivers, must do so.

That is essentially what the government is trying to do with this workplace legislation we have before us: to create a different way of approaching different types or classes of people in the workforce. Not only is it administratively very difficult to imagine how that will work, it will also bring to the front some antipathy from those people who are impacted by the legislation in a negative way, particularly employers, and those who are given a free pass.

These changes do not just hurt workers, they hurt the businesses that work in industries where cowboys are prevalent, where they are dragging down wages, conditions and, in particular, the safety of workplaces. Standards across whole industries could drop if these amendments are adopted. Correspondence the opposition has received from some industry groups, workers and unions makes it very clear that they want to leave the current legislation in place. They want the fiddling with this legislation to stop to allow it to get on and do what it was meant to do.

I would like to see the government explain why a worker in a warehouse, working on a forklift for a labour hire company, does not require protection from a dodgy labour hire firm. A law that covers all at-risk labour hire workers makes more sense to me. Leaving it to the commissioner to make sensible decisions to exempt some professions or businesses, as the bill currently stands and was designed to do, I think is the best way forward.

Removing red tape can hardly be a response to why these extreme changes are required. The government's terminology here is if workers are considered at low risk or medium risk of exploitation. Surely, we have a duty to make sure all workers who are at risk of exploitation are protected—that is, all workers—and not divide them up into separate categories. As legislators, we are asking for trouble. I would put it to the chamber that if one worker packing a box is covered but when that box is handed to a labour hire worker working for a transport company that person therefore is not, you are really raising some issues of demarcation which I do not believe will assist business in any way and will only drive up costs for that business.

If you want to lessen red tape, cover all workers in the same way who require protection along that chain of production. The existing bill already has scope for exemptions, which have already been used by the commissioner, I am advised. We need the commissioner to sit down with the government and the South Australian labour hire task force and SA Unions to work through a sensible package of exemptions for their particular industries.

SA Unions needs to be involved because, if you want to have a genuine consultation process, they are a key stakeholder in this area. Parliament, I would suggest, does not need to micromanage an act that has not yet been allowed to operate. We just need to tell the government to get on with it and let it do the work that it was designed to do.

The Victorian version of the licensing scheme, I am advised, currently includes secondees for exemptions, providing workers within a group, a small body corporate providing a director, students under the education and training act, and vocational placements as prescribed under the Fair Work Act 2009. That seems to me like a sensible way through the process where the stakeholders have agreed mutually on appropriate exemptions from the legislation. But the Victorian legislation covers all classes of workers in industries. It is clear. It is concise. It is easy to administer for the Public Service. Using the Marshall government's terminology, low, medium and high-risk employees are covered by the Victorian legislation with sensible exemptions, as I have just outlined.

The amendments that we are considering before us not only narrow the prescribed industries considerably; for example, part 2, clause 5—Amendment of section 6—Interpretation, but further refine meat processing work as one of eight subsections from 'killing of animals' to 'packing meat'. It cherrypicks jobs within those industries, or attempts to do so, being a higher risk or lower risk, but why? What is the government trying to solve with this cherrypicking of classes of workers in a particular industry?

It will actually gut the work the bill was meant to do. It creates two classes of workers in the same workplace and, in fact, on the same production line. There will have to be separate ways of dealing with these workers by the business involved because of their different categorisations as either low risk or high risk. That is not a sensible way for a business to operate. They want a set of rules that applies right across their workplace for all workers that can be administered very easily.

The proposed amendments mention the packing of meat. They do not mention the unpacking of meat. And there are many other examples of where we can draw the distinction that in fact creating this artificial demarcation in the workplace is actually going to be detrimental to businesses in South Australia. Will it cover the person who sweeps the floor? Does it cover the person who changes the meat blades on machines or sharpens the knives? We do not know.

The government wants to talk about—politically—the reduction of red tape, so why, then, would they make it so much more difficult for businesses in South Australia to actually get on with the job of hiring people, employing them and training them in their workplace? They wish to treat them all in the same manner, but this legislation will require them to treat different classes of workers differently.

The shadow attorney-general, the Hon. Kyam Maher, I am advised, met with Commissioner Soulio, and on his behalf I would like to thank the commissioner for his time. He said that if the amendments are passed, I am advised, 40 per cent of those who have applied for licences would no longer require them. I am also advised the Attorney-General's office has later revised that figure up to 50 per cent. We do not have any figures to substantiate that increase and why the Attorney-General has come to that view. We do not know how many workers would be without protections from dodgy operators within that 50 per cent figure, but one can only surmise it would be a significant number.

Going through those numbers, there have been 353 labour hire licences issued, I understand, and 238 were being processed at the time that the shadow attorney-general, the Hon. Kyam Maher, met with the commissioner. If the government is sincere in its concerns about business red tape reduction, then they really should be concerned about removing the uncertainty for business that they have gone about creating over the past 12 months. Another change to an existing law that has not yet been allowed to operate fully is just going to make the situation for business worse.

I also understand there have been several representations made from concerned business sectors, that their industries have seemingly been targeted while others have been left without licensing. This is exactly why the law was produced in its original form, so that it does not discriminate or make an arbitrary decision about which industries and which jobs within those industries are covered.

Just think of the scenario that we can conjure up: these amendments are accepted by the parliament and then, for example, the federal government finally gets around to its own legislation, with yet more changes for businesses to try to implement in their workplace. We have been advised by the Attorney General's office and from indications in the media that a federal licensing system will come at some point—I will believe it when I see it—but there has been no time frame that has been mooted as far as I understand.

So there is more uncertainty for businesses in SA if they are now to face changes in this current legislation and a policy vacuum from this government where cowboy labour hire firms are allowed to get away with the rorts they do and their dodgy operations and not protecting workers in the workplace even in higher numbers than before, as the Attorney-General in the other place seems to be suggesting.

I say to the council that we are better off giving the system we have before us the chance to work, a chance to do the work that this chamber decided it should do the last time we decided to reject the repeal legislation. If the federal government does get around to making its own changes, perhaps we can then revisit the legislation in the light of those proposals. My suggestion to the chamber is that we reject once again this government's ill thought through plans and that we reject this piece of legislation, just like we rejected the repeal bill a couple of years ago.

The Hon. J.A. DARLEY (17:18): I rise to contribute to the second reading of the Labour Hire Licensing (Miscellaneous) Amendment Bill. This bill is a result of the government consulting and listening to feedback given in response to their previous bill, the Labour Hire Licensing Repeal Bill.

In my second reading contribution on that bill, I suggested there may have been an appetite from this parliament to support amendments to the act in response to problems that have been identified rather than to repeal the act entirely. I commend the government on listening to this feedback and for introducing the bill we are currently considering.

I understand the bill lists a number of industries to which the act will apply rather than having the broadbrush approach under the current act. This list of industries was compiled after consideration of reports from the Migrant Workers' Taskforce, the Fair Work Ombudsman and Victoria's inquiry into labour hire and insecure work. I acknowledge that this is not perfect and there are still sectors representing both those who use labour hire workers and those representing the workers themselves who are unhappy with the outcome. However, I believe that the government has struck a reasonable balance with this bill.

The bill also makes a number of other amendments, such as removing the penalty of a gaol sentence, requiring labour hire providers to disclose certain information to workers and streamlining the administrative red tape by aligning reporting periods. I support the second reading of the bill.

The PRESIDENT: Clerk, I note the state of the chamber; please ring the bells.

A quorum having been formed:

The Hon. T.A. FRANKS (17:21): I rise on behalf of the Greens to indicate that, while we will support the second reading of this bill, we look forward to the debate. We understand that this bill has reached much further and cast its net much further than was originally intended and that there have been unforeseen consequences. We are sympathetic to those arguments and have had representations from people in many industries that we would have thought would never be captured by this piece of legislation.

We look forward to an informative debate and indicate that we will be supporting the SA-Best amendment regarding more flexibility and determining additional industries, should that be required. It would have been moved by the Greens if SA-Best had not beat us to the punch. With those few words, while we actually reserve our right to vote against this bill at the third reading if we are not satisfied that a case has been made, at this stage we support the second reading.

Debate adjourned on motion of Hon. D.G.E. Hood.