- NOVEMBER 2015 -

Australian Services Union Victorian and Tasmanian Authorities and Services Branch

Submission to the Victorian Inquiry into the

Labour Hire Industry and Insecure Work

ASU Australian Services Union

Victorian and Tasmanian Authorities & Services Branch

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About the Australian Services Union

The Australian Services Union - Victorian and Tasmanian Authorities and Services Branch, is the principal union with coverage over local government and the Social and Community Sector (SACS) workforce.

The ASU has members performing work across a range of occupations within these sectors.

We represent a cross-section of society, our membership being divided between male and female workers; metropolitan based and rural and regional based workers; tertiary qualified and low to unskilled workers; and workers across all age groups.

Through the connection to our predecessor unions, the ASU has been representing workers in Victoria since 1885.

For more information about this submission contact:

Robert Bozinovski - Research Officer, ASU Victorian and Tasmanian Authorities and Services Branch

Australian Services Union - Victorian and Tasmanian Authorities & Services Branch 116 Queensberry Street Carlton South, VIC 3053

Phone: 03 9342 3400 Email: info@asuvictas.com.au

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Table of Contents

Executive Summary 4

Labour Hire and Precarious Employment 5

Labour Hire and Precarious Employment in Local Government 5

Precarious Employment in Social and Community Services 7

Precarious Employment and Women 8

Responses to Questions Asked by the Inquiry

Labour Hire 10

Insecure Work 14

ASU Recommendations and Further Suggestions for Reform 17

Attachment 1 - confidential

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Executive Summary

The ASU is pleased to participate in the Victorian Inquiry into the Labour Hire Industry and Insecure Work. For many years the nation's workforce has steadily seen the notion of job security eroded, to the point where many workers see it as little more than abstraction. A generation of workers have come of age knowing only different forms of precarious employment - casual, temporary, labour hire, fixed-term contract, seasonal, with new forms of employment such as the 'sharing' or 'gig' economy heading our way.

So far as employment models are concerned, precarious employment is the 21st century zeitgeist. The ASU is disturbed by this trend. And it is impossible to see it otherwise, with these opinions championed by none other than prime minister Malcolm Turnbull, who in remarks made shortly after deposing Mr Abbott as prime minister, asked Australians to embrace 'economic disruption', that it was 'our friend.'

Unfortunately for those on the ground experiencing the chill wind of economic disruption, it cannot said to be 'our friend.' A heavy shroud of ideologically inspired - yet reality divorced - orthodoxy has sought to extinguish any alternative thinking for employment models that places job security at its core. Job security, much sought and valued by ASU members, is frowned on in both government circles and among certain sections of the commentariat. Yet neither government nor commentariat are faced with the reality precarious employment entails: low take home pay; high levels of stress; insecurity and mental health problems among other things.

The ASU welcomes this opportunity to bring to public attention, via the committee, the reality of precarious employment for many workers, in particular the ASU's own members. We hope this process provides an antidote to the generally accepted dogma that precious employment is 'modern' and 'a good thing in a modern economy' and should be treated as 'our friend.'

In this submission we will discuss the issue of labour hire and precarious employment as they related to the principle areas of coverage for the ASU - local government and the community sector. Following from this, we will the address the questions asked in the inquiry's discussion paper.

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Labour Hire and Precarious Employment

Both labour hire and precarious employment are no strangers to local government and the community sector. Indeed precarious employment in particular is perhaps one of the most wide- spread and concerning issues facing ASU members across all the union's industry coverage areas. It takes distinct forms in addition to the generally seen forms of casualization, temporary etc seen across the economy: contracting out of services by local councils, and the limited tenure character of funding for many community sector organisations who rely entirely on government funding sources to merely exist.

Labour Hire and Precarious Employment in Local Government

Local government provides a disparate range of services. These include 'face to face' type human services such as home care; to the less interactive garbage collection services; to the more 'enforcement' type services such as environmental health inspections or by-laws officers.

Because of the breadth of service expected from Council, many maintain sizeable workforces reflective of the service levels expected by the population in their respective municipal districts. However not all councils provide services direct to their communities - rather some choose to contract out services to providers, frequently at a cheaper cost due to the lower wages paid to workers at those contactors.

It is this practice of contracting out local government services that is the principle - though by no means only - cause of precarious employment within the local government sector in general. Precarious employment is inherent in contracting arrangements - after all contracts expire, must be re-tendered and the possibility exists for a new contractor to win the work from the previous contractor, leaving the workforce in limbo.

Employment practices at local government contractors are a further source of precarious employment. Pay and conditions are of less value than those prevalent among workers employed direct by Councils. Rates of casualization are greater at a contractor than those commonly seen at a Council. Leave entitlements are also fewer. So too are career opportunities. So for workers employed at contractors undertaking services on behalf of local government, inferior pay, conditions and greatly eroded job security coupled with less career opportunities are the norm when compared to the possibilities open to workers employed directly by a Council.

Local government contractors, like Councils themselves, are users of labour hire agencies. While there may be instances where the legitimate use of labour hire is necessary (such as backfilling positions during a period of staff absences), the ASU has seen examples where labour hire employees have been exploited and used in a way intended to supplant the permanent workforce. Not only is this practice an instance of misuse of labour hire employees, but is another iteration of precarious employment.

At both local government contractors and Councils themselves, it is not unknown for labour hire workers to be undertaking work for extended periods of time - sometimes for years - without being given the opportunity to move formally into permanent employment at the host employer. This

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situation has obvious consequences for the employee concerned: they lack any employment security leading to knock-on effects, such as income insecurity and subsequent reduction in living standards.

Yet a further factor at play is the angst caused among the permanent workforce by the use of long- term labour hire employees. Permanent staff are concerned that their position may 'be next' for conversion into a role fulfilled by a labour hire worker. In turn this breeds suspicion between the permanent staff and labour hire workers on site. Unnecessary tension and reduced staff morale are the by-products of this outcome.

Other forms of precarious employment are also evident at both Councils and their contractors. Casualisation is a notable example. The ASU is familiar with workers who undertake de facto full- time work over the course of years, yet are not recognised as such thus missing out on employment security a permanent position brings and the conditions any permanent staff member enjoys, not least being sick and annual leave. In our experience this practice is a manoeuvre by employers to avoid committing themselves to a permanent employment relationship with a staff member, with the employer effectively able to terminate a casual employee's employment by simply refusing to offer him/her any hours. And every casual employee is aware of this implied threat - leading to a culture of anxiety bordering on fear. Thus in our experience casual employees are less likely to speak out about OHS problems, or other workplace injustices, or even join the union due to their fear the employer will exact revenge on them by cutting their hours of work.

For local government, casualization tends to cluster around certain roles - leisure services; customer services; home care among others. These typically are areas where union density is lowest; or where the workforce is relatively young; or where the workforce is predominantly female; or a combination of all three factors. And these three factors - low union density, young workers and female workers - in our experience tend to comprise the demographic profile of workers that attract the most precarious forms of employment. We believe that there is a correlation between low union density levels and high levels of insecure work.

Not that high union density is a guaranteed way of preventing labour hire abuse and insecure work. However, in the ASU's experience, high union density serves as a significant barrier to the institution of insecure forms of work, or offers the opportunity for poor employment practices to be identified and redressed in some way.

Thus the ASU believes the surest way to address the issues of labour hire abuse and insecure work is to encourage union membership and empower unions and their members to take action at the workplace level to address the problem - be it through the introduction via EBAs and awards of site rates applying to all employees including labour hire workers; casual conversion clauses in EBAs and awards, so that casuals have the opportunity to convert their employment to a permanent footing if they choose to do so; or winning clauses in EBAs setting out how labour hire and casuals cannot be used, i.e., as a replacement to the permanent workforce.

Recommendation 1: The Victorian government must engage with local government on ways to return outsourced services to the direct provision of Council.

Recommendation 2: That the inquiry recommend the Victorian government amend the Local

Government Act to require Councils contracting out their services to seek information from

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bidders specifying what employment instrument they engage their staff, demonstrate that the bid they have lodged with Council is sufficient to cover staff costs and that the Councils must subtract a percentage total from any tender evaluation process for contractors with poor employment records on matters including, though not limited to, precarious employment, history of enterprise bargaining, OHS and so on.

Recommendation 3: The inquiry recommend the Victorian government amend the Local Government Act to compel Council that have utilised labour hire workers for a job extending for a period up to 3 months to offer that worker the opportunity to apply for that position at Council or else provide written reasons why the worker has not been given the chance to apply for permanency in that role and to set out when the role is due to conclude.

Precarious Employment in Social and Community Services

Precarious employment is endemic in social and community services (SACS). And like local government precarious employment is linked to contacting decisions taken by funding agencies. However unlike local government which to a large extend is able to raise its own sources of revenue, community sector organisations (CSOs) are almost entirely dependent on limited tenure government funding. This factor is compounded by the competitive nature of tendering - where rival bidders seek to undercut each other and to do so by cutting staff costs. This funding model, which is employed by government, barely covers the award rate SACS workers are entitled too, meaning there is a very limited scope for above award rate pay increases through the enterprise bargaining process. Thus the award minimum typically sets the pay and conditions for workers in this sector. Furthermore the SACS workforce is predominantly female, which, as discussed in greater detail below during the section on women and precarious employment, presents added complexity to the issue of insecure work.

Compounding this issue very often funding changes abruptly, or is discontinued for any manner of reasons, and the workers affected are forced to seek employment elsewhere. The experience of ASU members is to shift from one CSO to another, again receiving award rates of pay and conditions and again at an employer dependent on government funding. This is a perpetual cycle of changing employers seldom for appreciably better pay and conditions though often due to enforced necessity. It is worth mentioning that this constant turnover is one of the causes of the inability for many SACS workers to accrue sufficient length of service with a single employer in order to access their long service leave entitlement and forms a key justification for the introduction of a portable long service leave scheme for the community sector - a matter currently under consideration by the Victorian parliament. Had CSOs enjoyed greater levels of funding and associated longevity in that funding, long service leave as a workplace entitlement would not be as much of an aspiration as it presently is for the vast majority of SACS workers.

Funding arrangements in the community sector are the main cause of insecure work and lead to employment models predicated on precarious funding. For example casual and short-term employment is also noticeable and is driven largely by precarious funding arrangements, effectively forcing CSOs to adopt employment models that can deliver a reduction in hours of work if/when funding is cut or lost.

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To the extent it is possible to address the issue of insecure work in the community sector, government needs to consider the consequences of precarious funding models as drivers of precarious employment. In the ASU's experience there is a clear correlation between the two. Government providing greater funding certainty, quantum of funding (so that CSOs are funded to pay wages in excess of the award minimum) and longevity of funding, while not of itself delivering a solution, will go a tremendous way toward addressing insecure employment in the community sector.

Further the ASU believes the inquiry should recommend that in future the Victorian government, as part of the government's tender evaluation process for community services, must require CSOs bidding for contracts to specify under what type of industrial instrument their staff are engaged (e.g. award or EBA), whether the CSO's bid is sufficient to cover employee costs and if the bidder intends to employ staff on a permanent footing or insecure basis. The Victorian government should simultaneously assess whether bidders are able to meet their staff costs, including in the event of redundancies. The ASU believes the government should favour those bidders who have demonstrated a commitment to secure employment.

Recommendation 4: That the inquiry recommend the Victorian government increase both the quantum of funding and length of funding available to community sector organisations as a means of addressing insecure employment within the sector by providing CSOs funding certainty.

Recommendation 5: That CSOs bidding for Victorian government contracts must specify what employment instrument they engage their staff, demonstrate that the bid they have lodged with government is sufficient to cover staff costs and that the Victorian government assess whether bidders are indeed able to meet these obligations, with successful tender going to those bidders who have demonstrated a commitment to secure employment and ethical workplace practices.

Precarious Employment and Women

The ASU maintains a large female membership and we believe women workers experience greater levels of insecure work and greater challenges in same. In large part, this is driven by traditional roles associated with women: namely, being the primary carer for children, older family members, or sick or disabled family members. These caring duties often see women forego employment or career progression and lead to intermittent employment history, often employed in precarious positions like casual or short-term. To illustrate the depth of casualization among women, consider that:

Fifty -five percent of casuals are women (November 2011 ABS) 1

Almost a quarter of all Australian employees are engaged as casual employees2

22 per cent of female employees and 17 per cent of male employees were in casual work without the stability of leave entitlements 3

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2011 ABS, Forms of Employment, November 2011, Cat 6359.0 34 ABS, Victorian Inquiry into the Labour Hire Industry and Insecure work Background paper, October 2015 ,p12 Australian Bureau of Statistics 4125.0 - Gender Indicators, Australia, Aug

2013 http://www.abs.gov.au/ausstats/abs@.nsf/products/D75D00B0F3C80434CA2578FD0017FF50?OpenDoc ument

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So casual employment is extensive among women and the financial impact on women is immense. Some obvious consequences are: reduced superannuation savings over a working life; loss of leave entitlements - such as paid parental or personal leave - where the employee is casual; no access to predictable and permanent hours/rosters, leading to loss of control over hours of work; and loss of promotion or professional development opportunities.

Fixed term contracts, particularly in the SACS sector, are another problem. In that sector, which is dominated by women, fixed term contracts are extensively utilised because, as discussed above, of the nature of government funding practices, and limited donations from philanthropic trusts. Fixed term contracts do not allow employees to feel they have security of employment or permit them to plan for the future as they may not know month to month or year to year that they will have an income, nor that they will receive any redundancy should the program they work for become defunded. They may also encounter difficulties in obtaining personal loans, mortgages and so on from banks due to the uncertain nature of their income source.

For many ASU women there is little meaningful opportunity to access and sustain a permanent rewarding career. Many women are expected to take time away from paid employment and provide the primary caregiver role to children. Many workplaces do not regularly accommodate working mothers with flexibility, despite NES and other industrial provisions. Similarly, other caring responsibilities, such as elder care and disability care, often fall to women, with the same negative impact on their work lives as described above.

These expectations have their origins in social and family pressure that presumes women adopt caring responsibilities because of the gendered assumption that only women can or want to take on caring duties. Add to that the traditional perspective that men act as the family breadwinner, many families make arrangements for women to work part time or not at all for periods of time.

Sole parent families are also usually headed by women who, as the only or main parent responsible for children, struggle to maintain full time, ongoing employment whilst juggling the job of raising children alone.

Hence from the foregoing, it is clear women face distinct challenges on insecure work that policy makers need to address in a clear and systematic fashion. Another issue that overwhelmingly effects women is the impact of family violence and the importance of maintaining stability of employment and income. Family violence has a significant and enduring effect on the women who experience it. Women who are subjected to family violence need to have secure work to enable them to leave a violent relationship and support themselves. Yet often women have had a sporadic work history due to the violence they've experienced. It is imperative that women in abusive relationships are supported to maintain their employment in order that they can manage the costs of living without their violent partner, who may have been the primary earner in the household. The ASU family violence clause has been instrumental in creating change in workplaces allowing for more stability for those escaping family violence, many of whom are women. Measures like this should be available within all workplaces to ensure that women are less likely to suffer career/employment/financial penalties due to the abusive behaviour of somebody else.

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Labour Hire

1. To what extent is labour hire used in Victoria? In which industries and regions is it most prevalent?

Labour hire is used within local government, across all Councils, and is prevalent in operational, blue collar type roles (such as parks and gardens, garbage collection etc) as well as white collar roles (such as local laws, customer service, building inspectors, planning and engineering). The ASU, as the local government union, has had extensive experience with the use of labour hire in local government.

We are familiar with how labour hire has been abused in the sector - largely in the form of host employers using labour hire workers as a type of substitute workforce. We offer the following examples: in local government, all new positions need to be approved by the CEO. However often the CEO is reluctant to increase the size of their workforce and so resort to labour hire workers who are not deemed employees of the Council; another example is where managers, who require additional staff, often use labour hire as these costs can very effectively be concealed in other areas of that particular manager's budget - thus labour hire costs are not reflected as staffing costs. It is also our experience that most Councils are unable to identify exactly how many labour hire employees they have engaged at any given time for these reasons.

Indeed we are aware of instances where labour hire workers have been engaged by a host for several years and have never been offered the opportunity to become permanent employees of the host employer. This denies workers caught in such situations basic levels of fairness where they are able to at least win secure employment. We are also familiar with cases where long-term labour hire workers have sought permanent employment at the host employer, have been refused, with the host employer then asking the labour hire company not to send that particular individual back to the Council, effectively terminating the role performed by the worker for years.

2. What do labour hire suppliers in Victoria look like (e.g. size, sectors they operate in, local or part of national/multinational business?)

Labour hire companies vary in size, scope etc. In our experience there doesn't seem to be any defining characteristic shared by all of them - rather they are diverse in makeup. However we are not aware of labour hire companies that operate solely in local government. Rather they serve an open ended, general clientele.

3. How are labour hire workers generally engaged? To what extent are they engaged as employees? Or as independent contractors?

Labour hire workers are generally engaged on an 'as need' basis as employees of the labour hire company. However we are not unfamiliar with cases where labour hire workers are de facto employees of the host - having worked there for years and become quite familiar with the organisation - but are never given the opportunity of become permanent employees of the host, and thus denied secure employment or the superior terms and conditions of employment to be obtained at the host employer.

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The Local Government Act requires Councils to advertise all full time permanent positions. It is not unknown for some managers to 'word up' their friends or relatives to register with a particular labour hire company and then hire staff from that company. This enables managers to avoid the stipulations of the Act, Council's recruitment policies and procedures and requirements of an Enterprise Agreement, as well as avoiding the need to declare conflicts of interest and select staff on merit. It also gives labour hire workers so chosen a competitive edge when the position is eventually advertised as they have had several months or in some cases years, of experience in the position.

4. What working conditions do labour hire workers typically have? What differences are there, if any, between the conditions of direct employees of a host organisation and labour hire workers?

Labour hire workers experience lesser standards of pay and conditions than employees at host organisations within the ASU's industry areas of coverage. Pay rates are vastly different, with staff directly employed by Councils paid better than their labour hire counterparts; leave entitlements are significantly better at Councils than at labour hire employers; in some instances, labour hire firms consider the employees to be Award free and we have encountered situations where they have been paid below the minimum classification level of the relevant Award, denied RDOs and paid time for time in excess of 38 hours per week. We have attached correspondence (attachment 1) of an incident reflective of this scenario with this submission, however we ask that attachment 1 remain confidential.

This is on top of the fact that labour hire workers face insecure employment. It is difficult to quantify the significance of having a secure job against an insecure one, but we believe this difference must be taken into account when seeking to quantify the difference between the pay and conditions of an employee at a unionised host employer against the pay and conditions of a labour hire worker at the same host.

5. To what extent is accommodation provided by labour hire companies to workers, and what is its nature and cost?

The ASU is not aware of any widespread use of this arrangement by employers using labour hire workers within our areas of coverage.

6. In what ways do hosts typically use labour hire workers? Are they used to supplement or to replace ongoing workforces or direct employees?

Employers use labour hire workers in a variety of ways. We are familiar with employers using labour hire for legitimate operational reasons - backfilling positions during periods of staff absences; using labour hire during 'one-off' busy periods, and so on.

However we are also familiar with cases where host employers have sought to use labour hire as a replacement for direct employees. This typically takes the form of a labour hire worker being engaged at a host for prolonged periods of time, stretching into several years. The labour hire worker is often left in a state of limbo, not knowing when their tenure at the host is due to cease, and not being remunerated to a level found by his/her co-workers. Workers in these situations are reluctant to raise issues such as underpayment of wages (including penalty rates) as they can be

terminated with no recourse to unfair dismissal or general protections dismissal remedies.

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7. Does the use of labour hire impact the availability of apprenticeships and traineeships?

Yes. We find that employers are opting for the easy way out rather than making the investment in skills and youth which used to occur at a far greater rate, especially in local government, in the past. These days employers are able to either engage labour hire staff or resort to 457 visa workers to fill skilled/semi-skilled positions that previously would be apprentice roles. Where Council's employ apprentices and trainees the majority are employed through group training companies, which also removes the direct employment relationship and is another form of precarious employment. Additionally this practice removes the apprentice or trainee from coverage of any applicable Award or Enterprise Agreement.

8. To what extent do hosts inquire into the labour practices of labour hire suppliers? Should this occur?

Yes it should occur. We believe the host should be obliged to pay any labour hire worker engaged there the prevailing rate, or the rate paid by the labour hire company, whichever is the greater.

In Enterprise Bargaining the ASU often advances a claim regarding the terms of engagement of labour hire workers. Our claim includes that labour hire workers receive the same pay and benefits of Council employees. The standard response of most Council's is that they cannot and will not impose any conditions on labour hire companies regarding the terms and conditions of their employees. However we note that this is a false argument since there doesn't presently exist any legal barrier to implementing this sort of arrangement.

9. Is there evidence of labour hire being used to evade workplace laws and other legal obligations?

Yes. We have attached (attachment 1) a series of correspondence pertaining to the use of labour hire workers at a Council in metropolitan Melbourne where the labour hire staff have not been paid their due pay and entitlements.

We ask that these attachments be treated as confidential.

10. What role do labour hire companies play in supply chains for the provision of goods and services? Do other actors in those supply chains have responsibilities towards labour hire workers, whom they do not directly engage?

The issue of supply chains is not significant within the ASU's industry areas. Therefore we wish not to make comment on this specific matter.

11. Does the labour hire arrangements lead to positive outcomes for Victorian workers, businesses and the broader community? What problems does it create?

No. While there are some circumstance where labour hire is necessary for the operation of a Council (i.e., backfilling, increased staff for temporary periods), on balance it cannot be said that labour hire is a positive outcome for Victorian workers. Labour hire workers themselves are poorly paid, lack decent conditions and have practically no secure employment. This leads to anxiety about their future, particularly financial stress.

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For direct employees of host employers, labour hire presents a challenge as a replacement workforce, which bad employers can call on to undermine wages and conditions and employment security. As mentioned earlier in this submission this situation can lead to an unhealthy state of tension to prevail at a workplace between, on the one hand, labour hire workers who are resentful due to under-payment and lacking permanent, ongoing employment at a host employer, and equally suspicious direct employees who see labour hire workers as a threat to their own job security and a potential 'Trojan Horse' for driving down wages and employment conditions. This state of affairs benefits nobody.

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Insecure Work

1. What experience or evidence can you provide of insecure work in Victoria? What forms of working arrangements give rise to this? Which industries and regions does it occur in?

Insecure work is prevalent across all the ASU's areas of coverage and across all regions where the ASU has members.

The working arrangements that give rise to this differ between industries. For local government, insecure work can be attributed to uncertainty around a council's commitment to a service it provides, or the duration of a contract it has let for the provision of a service, or the level/duration of government funding provided a council to deliver a service on behalf of a different tier of government before that level of funding in real terms is reduced because government does not provide cost-reflective funding. Under such circumstances, workers can be employed officially as permanent full/part-time, but in reality once the council opts to cease providing a service or funding expires affected workers will be out of a job. More often workers are employed as casuals whilst performing full-time or regular hours of work, but once funding ceases or Council makes a decision to cease offering the service, affected workers have their hours reduced to zero and are for all intents and purposes left unemployed. In sum, insecure work arrangements in local government can be attributed to precarious funding and capricious decision making from both Councils as well as other levels of government.

In the sense of insecure funding sources, a similar force is at play in the community sector. As mentioned earlier in this submission, CSOs are heavily reliant on government funding for their income sources. These sources often cease or the terms of the agreement change on relatively short notice. This leaves CSOs two choices: either casualise the workforce so as to more easily reduce hours of work when funding is cut with the aim of retaining staff (to the extent staff are prepared to remain at the organisation under those employment arrangements), or offer redundancies - where possible - when funding is cut.

In both local government and the community sector, funding decisions, often based on politics, are a key factor impelling insecure work. However this is not to say that both industries contain employers who prefer to adopt insecure employment models for various purposes. One reason we believe employers maintain insecure employment models is to cower their staff into obedience. Put simply, employers make their staff casual and punish any staff member who begins to demonstrate any manifestation of union activism or raises concerns about OHS or other workplace rights common at unionised workplaces. Punishment in this context takes the form of hours of work reduced to zero, or inconvenient hours of work, or outright bullying, or a combination of the foregoing. Not only does this practise compound the stresses inherent in precarious employment, but they also lead to employment abuses like underpayment, OHS breaches and so on because workers fear they could be out of a job if they call out their employer for poor employment practices. We find that these employment practices are more egregious at for-profit contractors, though both Councils and CSOs are not immune from this type of behaviour.

2. What experience or evidence can you provide of sham contracting?

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We have an example of an arrangement that approximates to sham contracting, though doesn't fit neatly into the sham contracting arrangement as would normally be defined. This is in respect of family day care services in local government. Some family day carers are engaged on a contract and in most cases are required to tender for the work on a periodic basis. They are treated as contractors, not employees, and are paid a rate per child, currently around the $5-$6 per hour mark. They are usually expected to be available for 60 hours per week. Many family day carers work 60 hours a week with no overtime payment. They can be required to have only 1 child in their care which means they are being paid around 30% of the Award rate.

As they are required to be available for 60 hours a week and in most instances Council is their sole source of work, they are not considered to be independent contractors by the ATO. In a departure from more egregious sham contracting arrangements, Councils also pay family day carers WorkCover and Superannuation which is a concession that they are not genuine contractors.

3. What experience or evidence can you provide of the use - or misuse - of working visas in Victoria? Which industries and regions are they used in? What kinds of jobs do working visa holders obtain?

The ASU is familiar of the use of 457 visa workers as replacement labour at both CSOs and local government contractors. We are not aware of any widespread abuse at of working visas at Councils themselves.

In our experience there is a nexus between working visa (a la 457 visas), insecure employment and poor employment practices. We find that most of those employed on 457 visas are on short-term or casual forms of employment, are not aware of their workplace rights and are too intimidated to raise with their employer any concerns they may harbour about conditions at work. Certainly the ostensible justification of the Commonwealth government maintaining 457 visas viz., to enable employers to fill occupations where a skills shortage is prevalent and local workers are unavailable for the job, is not the reality in the ASU's experience. Some of the work 457 visa workers do is either low-skilled (i.e., street cleaning) or has a surplus of locally qualified workers (social work). We believe that employers are resorting to 457 visa workers without exploring the possibility of local workers being willing to do the job because employers are able to wield inordinate power over the lives of such workers - this is especially the case where a 457 visa worker aspires to obtain permanent residency in Australia and requires their employer's support to do so. It does not take much intellectual rigour for a 457 visa worker to realise that their hopes of obtaining permanent Australian residency will be dashed if they spoke out robustly in defence of their rights as workers in Australia. This factor compounds the already unacceptable dearth of knowledge many 457 visa workers have about their rights as workers, their security in the job and the often poor workplace cultures they must endure.

4. What experience or evidence can you provide of exploitation of vulnerable workers in Victoria? This could include working visa holders, young or older workers, workers from a non-English speaking background, women workers, workers with low levels of formal education, workers with a disability or other vulnerable workers.

The ASU is aware of cases that fall within this category. We are in the process of seeking examples for the attention of the inquiry.

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5. What experience or evidence can you provide regarding the use of phoenix activity, supply chains or franchising arrangements contributing to insecure work, the exploitation of vulnerable workers or unfairness for competing businesses?

We have already discussed the role played by contracting and funding arrangements in both local government and the community sector in driving insecure work.

6. What are the effects of insecure work on Victorian workers, including their family life, community involvement, housing and financial arrangements?

The effects of insecure work on the lives of workers and their dependents are extensive. It is no exaggeration to say that their lives are put on hold. The impact of insecure work - which in reality is another way of describing insecure income - on the ability of effected workers to obtain loans for any purpose if tremendous. Without a stable source of income derived from a stable job, many lenders refuse to provide loans. Workers are sometimes forced onto credit, or resort to the extortionate loans provided by 'pay day lenders' or micro-credit facilities merely to make ends meet. Loans are sought to pay household bills and groceries. Paying these debts become harder, especially where hours of work have been unexpectedly reduced. It is no exaggeration to say that a spiral of debt consumes anyone caught in this trap, with no easy way out. Thus, the only way to avoid this scenario is for workers to obtain secure sources of income, which can only be found with secure employment.

7. Do workers experiencing insecure work desire more ongoing working arrangements, and if so, of what kind? What barriers do you encounter in obtaining more secure working arrangements?

Yes absolutely. Workers experiencing insecure work desire permanent employment, with predictable hours and income that secure employment provides. However employers need to change their thinking to facilitate and enable this to occur - that means the attachment to so called 'flexibility' needs to be re-evaluated in light of its deleterious social consequences.

It also means that where workers jobs are dependent on political decisions and government grants/tenders, more consideration needs to be taken on the repercussions precarious funding models have in respect of insecure work. As far as this aspect of insecure work is concerned, there is limited ability for workers and the union movement to deliver more stable employment outcomes for workers - it is truly up to governments and Councils to live up to their rhetoric and deliver funding models that discourage insecure employment and that enable employers to offer their staff good, stable and secure employment.

ASU Recommendations and Further Suggestions for Reform

The recommendations the ASU has put to the inquiry are:

Recommendation 1: The Victorian government must engage with local government on ways to return outsourced services to the direct provision of Council.

Recommendation 2: That the inquiry recommend the Victorian government amend the Local Government Act to require Councils contracting out their services to seek information from

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bidders specifying what employment instrument they engage their staff, demonstrate that the bid they have lodged with Council is sufficient to cover staff costs and that the Councils must subtract a percentage total from any tender evaluation process for contractors with poor employment records on matters including, though not limited to, precarious employment, history of enterprise bargaining, OHS and so on.

Recommendation 3: The inquiry recommend the Victorian government amend the Local Government Act to compel Council that have utilised labour hire workers for a job extending for a period up to 3 months to offer that worker the opportunity to apply for that position at Council or else provide written reasons why the worker has not been given the chance to apply for permanency in that role and to set out when the role is due to conclude.

Recommendation 4: That the inquiry recommend the Victorian government increase both the quantum of funding and length of funding available to community sector organisations as a means of addressing insecure employment within the sector by providing CSOs funding certainty.

Recommendation 5: That CSOs bidding for Victorian government contracts must specify what employment instrument they engage their staff, demonstrate that the bid they have lodged with government is sufficient to cover staff costs and that the Victorian government assess whether bidders are indeed able to meet these obligations, with successful tender going to those bidders who have demonstrated a commitment to secure employment and ethical workplace practices.

In addition to some of the measures described in the foregoing discussion, the ASU has some other suggestions on how the labour hire industry can be better regulated and insecure work addressed. We are broadly aware of certain proposals in respect of labour hire that have been made by the National Union of Workers (NUW). The ASU is in agreement with these proposals, which we generally understand to be:

A licencing regime, with core requirements such as satisfying a 'fit and proper person test' and compliance with workplace laws for a part of the conditions to hold a licence, be instituted and that labour hire companies obtain and maintain a licence to operate.

That licence holders pay a bond or fee to the Victorian government in order to operate a labour hire business in Victoria

The fees generated by these licences can then be used to finance a labour hire compliance unit whose task it will be to monitor the activities of labour hire firms; investigate suspected breaches of law; and generally enforce regulation as they pertain to labour hire firms

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That labour hire companies need to maintain a minimum capital threshold so as to guarantee the viability of the firm and to ensure employees entitlements are met in the occurrence of the firm going bankrupt

A mandatory requirement that labour hire firms systematically train their employees regarding their workplace rights

Other areas within the purview of this inquiry, though perhaps beyond the power of the Victorian government to enact, we suggest it look at:

Increasing transparency in contracting - including sub-contracting, supply chains as well as government tendering, funding arrangements etc - with the aim of ensuring contracts are cost reflective of staff wages and are not structured in a way as to encourage precarious employment or underpayment. In addition, these contracting arrangements must be open to scrutiny from workers and unions.

Government funding and grants must have conditions upon them that encourage secure and local employment and require the recipient of such money to undertake labour market testing prior to engaging visa holders as employees

That labour hire workers be covered by site rates or whatever industrial instrument applies at the host employer if the pay, terms and conditions of employment at the host are better than those prevailing at the labour hire company

State government to consider some sort of financial incentive (ie. payroll tax, workcover premiums) for employers who adopt insecure employment models and the converse for those that offer more secure forms of employment

That additional protections be included in law for young workers, women and CALD workers, who tend to be overrepresented in insecure work.