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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
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Economic and Finance Committee: Inquiry into the Labour Hire Industry

Mr ODENWALDER (Little Para) (11:48): I move:

That the 93rd report of the committee, entitled Inquiry into the Labour Hire Industry, be noted.

In June 2015, the Economic and Finance Committee commenced an inquiry into the exploitation of workers in the labour hire industry. The final report of the inquiry was tabled yesterday. The revelations, which first aired on the Four Corners episode entitled Slaving Away on 4 May last year, provoked outrage around the country. That such abuse and disregard for the legally protected rights of workers can be occurring in this country in this century was truly shocking. In response, the commonwealth Senate announced an inquiry into the treatment of people in Australia on temporary visas.

The Queensland parliament and the Victorian government also announced inquiries to investigate the abuses perpetrated against vulnerable workers, and the Economic and Finance Committee in this state similarly instigated the inquiry whose report is the subject of this debate. On behalf of the members of the committee, I would like to express my gratitude to all those people who either provided a written submission to the inquiry or appeared before the inquiry to present oral evidence.

The committee is particularly appreciative of those workers who bravely recounted their experiences for us and for the purposes of Hansard. The inquiry received a total of 13 written submissions from interested parties. These parties included various government departments, industry groups and unions. The committee also sought and received answers to certain questions from three commonwealth departments and agencies. In addition to those submissions we also held seven public hearings and heard testimony from more than 30 witnesses, including some who had themselves been victims of exploitation.

Because the instances of exploitation were more likely to be occurring in those sectors of the economy which are heavily reliant on temporary workers, including those on working visas, the committee felt it was essential to visit such an area and hear firsthand from those involved. Therefore, one of the public hearings was held at the Berri Barmera Council chambers. While in the Riverland, the committee also visited several companies who employ labour hire workers.

The committee repeatedly heard that the current lack of registration requirements for the labour hire industry ultimately leads to difficulties in identifying employer/labour hire worker relationships. The most relevant act in South Australia, the Employment Agents Registration Act 1993, does not assist, as it lacks a clear definition of labour hire. The committee heard that a range of different employment arrangements may fall under the banner of labour hire and thus, as things stand, may not be subjected to a proper level of scrutiny.

The evidence we received pointed towards a state of affairs in which it is simply too easy for people to set up a business and call themselves a labour hire provider and then, when placed under the spotlight of scrutiny for their appalling practices, may wind up their businesses and wait a while before starting the whole awful cycle again. This practice, known as 'phoenixing', is all too common, and of course the workers themselves are left in the lurch, often being owed many thousands of dollars.

Accordingly, the central recommendation of the report considers introduction of a licensing and registration scheme for labour hire providers. Features of such a federal scheme would include:

a fit and proper person test on owners/directors of labour hire companies and authorised representatives of such companies;

a threshold capital requirement based on held assets and revenue and cash flow;

annual reporting requirements;

a compliance unit within government;

a fee and bond structure which would at least partially fund such a compliance unit; and, importantly,

significant penalties for the use of unlicensed or unregistered labour hire firms by host or primary employers.

This recommendation specifically refers to and supports the major recommendations of the Senate inquiry, which has still not been responded to by the federal government. To be fair, the federal government was interrupted by an election and one of history's longest caretaker periods, but I put on the record that to date it has still not responded. Senator Marshall, in the Senate, has subsequently called on the education and employment committee of the Senate to essentially take up where the last inquiry left off and keep the issue moving forward. So the major recommendation explicitly echoes that of the Senate inquiry, specifically recommendation 32 of its report.

There are two sides to the equation. Such an arrangement requires both a provider and an end-user of labour hire workers. The host employers may potentially be complicit in the mistreatment of workers or they may simply be ignorant of the issues. Either way, they must not be able to absolve themselves of their responsibility towards people who are working on their behalf and on their premises. Hence, we include, as part of the above, the further recommendation that the South Australian government legislates significant penalties for the use of unlicensed or unregistered labour hire firms by host employers. This is important.

Those opposed to a licensing and registration scheme will argue—and I have no doubt will argue today—that the current laws are enough, that these things are already illegal and that the solution would be to have better enforcement and investigation, and so on, of the existing laws, that that would solve the problem. I disagree, and the committee ended up disagreeing, because, amongst other reasons, it removes any onus on the host employer to make sure that the people they are employing to further employ people on their behalf are fit and proper providers of that hire.

I am not suggesting that any specific host employer would deliberately exploit workers or employ a labour hire provider to exploit workers, but the simple fact remains that they have no way of knowing. Should they choose to ignore it, they can choose to ignore it, and they can deny any responsibility. A licensing and registration scheme at the very least puts the onus on those employers to make sure they check the bona fides of the firm they are hiring to provide labour on their behalf, thereby forcing the so-called 'cowboys' out of the market. I think the larger reputable labour hire companies would agree with such a proposition.

Australia is not the first country to address this issue. The government of the United Kingdom, in response to the deaths of more than 20 undocumented migrant workers, established the Gangmasters Licensing Authority. This body regulates employment in the horticulture and fresh produce supply sectors specifically. As part of the act, severe penalties, including imprisonment, apply to both the providers of temporary workers and, importantly, to those who employ their services. Host employers who make no attempt or only superficial attempts to verify the bona fides of those providing their workers face strong sanctions. The committee felt that the introduction of a similar penalty regime here is entirely appropriate.

While in the Riverland, the committee heard descriptions of the accommodation some workers are forced to endure as part of their employment arrangements: 20 or more people in a single house with sleeping conditions amounting to no more than a row of mattresses on the floor were indicative of some of the conditions enforced, according to the evidence. Therefore, we include the recommendation that, where accommodation is included in a contract of employment, it must be of a standard that is acceptable to the wider community. That there is even a need for this particular recommendation speaks volumes about the extent of the problem.

The committee also heard evidence that any attempt to remedy this situation, if it is to be successful, must involve a coordinated national approach. States acting in isolation are likely only to see the problem move across the border and continue on. Notwithstanding that, the committee has recommended, in recommendation 2, that in the absence of a national scheme the state government investigate the possibility of such a scheme within this state.

The issue of interagency cooperation and data sharing between various state and commonwealth agencies was raised repeatedly during the inquiry's hearings; some were described as good, others as improving, while some were considered unsatisfactory. Some existing formal collaborations were outlined to the committee, including Taskforce Cadena, which has been established to coordinate activities between the commonwealth government and state-based agencies to monitor potential exploitation in the temporary visa program.

The committee believes that formal relationships between South Australian government agencies, as well as with relevant interstate and commonwealth agencies, are essential to ensuring compliance with measures taken to protect vulnerable workers, and this report contains several recommendations that tend towards this goal. The committee feels that the better educated a workforce is in regard to their rights and the options available to them when they have a grievance, the less likely it is to fall victim to these practices. The committee believes that this process cannot begin soon enough and should preferably commence immediately when these workers arrive on our shores.

During its Riverland trip, the committee heard from one labour hire provider concerning the education they provide to their clients, including the delivery of all information in multiple languages. I reiterate that there are many reputable labour hire companies. Indeed, the majority of labour hire companies do the right thing, pay their workers well, pay their WorkCover premiums, and so on.

Many industries in South Australia are heavily reliant on seasonal and temporary labour. The committee accepts that, the committee has no problem with that, but the committee feels that the implementation of any recommendations intended to curb the exploitation of workers must therefore be made in close consultation with those industries, with business groups, and also in consultation with the relevant unions. I seek leave to continue my remarks.

Leave granted; debate adjourned.

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