· web viewsubmission to the victorian labour hire industry and insecure work 22 february 2016...

Submission to the Victorian Labour Hire Industry and Insecure Work22 February 2016

Executive Summary

1. Chandler Macleod engages 13,000 employees each week across Australia and makes a significant contribution to the Victorian economy and the broader Australian labour market.

2. Employees utilise labour hire for a range of valid reasons. Our role is to efficiently facilitate people looking for work with the right role for their current circumstances. We provide meaningful opportunities for work for a broad cross section of the Victorian labour market.

3. Our clients select Chandler Macleod because of our reputation as a long established and highly professional organisation that can assist them in delivering a range of lawful labour market solutions.

4. We have a strong focus on ensuring we meet and exceed our safety obligations. We have developed comprehensive and accredited systems where we deliver improved safety outcomes for our employees and clients.

5. Chandler Macleod only uses lawful modes of engagement, predominately casual employment complying with all workplace relations and immigration requirements.

6. Additional state based regulations will penalise reputable labour hire organisations such as Chandler Macleod and are unlikely to deliver better outcomes for Victoria with respect to rogue operators.

7. We submit that existing forms of regulation are sufficient where enforcement initiatives are effectively utilised.

Submission 22 February 2016| Page 2 of 13

Background of Chandler Macleod

Chandler Macleod was founded in 1959 and is one of Australasia’s leading providers of integrated human resources services, products and technologies. We deliver Permanent, Temporary and Contract Staffing, Psychometric Assessment, HR Consulting Services, Managed Workforces, Outsourcing and Payroll & HR technologies.

Our mission is to unleash the potential of our employees; we attempt to link the best person for the best job each time- as part of our BestFit ™methodology.

Chandler Macleod’s Staffing Services division performs a range of recruitment and sourcing activities for various clients including supplying what the Inquiry has termed labour hire arrangements. We have over 13,000 employees working at client sites each week.

Key Clients and Sectors NationallyWe supply to a wide variety of industries across Australia as evidenced in the graph below.

Chandler Macleod in Victoria

Many of Australia’s largest companies are headquartered in Melbourne. We typically find that a head office is the base for centralised teams, information technology departments and administrative functions; therefore CMG in Victoria has a high concentration of white collar professionals that are on-hired to provide their specialist skills.

For example within our Victorian business in ICT services are well regarded. The dynamic nature of the industry means that a temporary on-hire framework provides for both the needs of the client and the employee. As technology can be complex and dynamic it is far more expedient for a company to engage a specialist who can bring the discrete required skills for the duration required rather than sourcing and recruiting a permanent employee featuring in the client’s headcount.

Similarly, an IT specialist in the 2016 labour market holds a ‘portfolio’ career where flexibility and exposure to diverse IT environments and projects assists them in building their career. This model enables specialists to lever the best financial outcomes for their careers. In some IT fields, permanent employment can be viewed as career limiting.

G RAPH SHOWING BREAKDOWN OF EMPLOYEES BY SECTOR IN V ICTORIA

Name Total%

CLERICAL AND ADMINISTRATIVE 239326%WORKERS

COMMUNITY AND PERSONAL 30%SERVICE WORKERS

LABOURERS 232926%

MACHINERY OPERATORS AND 205223%DRIVERS

MANAGERS 3614%

PROFESSIONALS 125414%

SALES WORKERS 4965%

TECHNICIANS AND TRADES 2222%WORKERS

Grand Total 9110

Benefits for Clients and Employees of Chandler MacleodPeople are our business, we need to continually seek and attract a pool of quality candidates. It is our role to ensure our employees remain the core focus and their continued engagement is a key performance indicator of our consultants.

We offer our employees respect for their career aspirations and respect any decisions with regards to flexibility and availability. Employees don’t have to waste time looking and applying for their next job as we can connect people directly with available roles.

Employees can also trust in our approach to compliance; we make sure they are safe at work on an ongoing basis, we pay them on time and correctly and they know that their entitlements are not going to disappear overnight.


We can offer employees better opportunity for continuity of employment where a direct hire employee would remain a single site, often with limited career opportunities as a casual. When an assignment is ending we work to ensure that employees can be placed elsewhere as quickly as possible.

CASE STUDY:

Assisting in redeployment outcomes

Our client was closing their manufacturing business in Vic and relocating the work to NSW. We partnered with the client to ensure that close to 90% of our casual workforce on-site were redeployed to other clients within one week of the closure occurring. This clearly had significant financial benefits for our employees who were not without work as many of their direct hire counterparts may well have been. While redundancy benefits can assist, in our experience continuing productive work is a better option for our employees and the community.

We obtain and receive feedback from our employees continually via a range of sources. We conduct employee satisfaction surveys. We aim to receive at least a satisfaction score of 3.5 or above. In the below recent survey from a group of employees placed at a key national client, we exceeded our feedback aims, with all employees rating Chandler Macleod highly, as noted below:

Transitioning the unemployed into the workforce

Chandler Macleod partners with our local jobactive providers both nationally and throughout regional and metropolitan Victoria to assist long term unemployed people to transition into sustainable and ongoing employment. As an organisation we have modified our sourcing strategies within this arena to ensure that potential candidates who may have a gap on their resume are still provided with the opportunity to discuss their career goals and the various opportunities at our host sites.

To date, we have helped 631 employees leave jobseeker benefits for paid employment.

We also facilitate better engagement for disenfranchised workers through our pre-employment programs whereby candidates attend a 5 day course to gain a greater insight into specific client requirements focussing in the warehouse and food production sectors. These programs replace the need for recent and/or relevant experience and provide an opportunity for employment outcomes post course based on their attendance, participation and attitude. Under a traditional recruitment model, these candidates would find it difficult to progress to employment stage given limited recent experience.

On average we have 80-140 candidates per month participating in work readiness programs and have a greater than 70% successfully transition to employment.

Chandler Macleod is also exploring the benefits of the current Victorian Back to Work program and reviewing clients where we may have an opportunity to engage candidates in fixed term employment arrangements as opposed to casual employment. Where possible, this has the benefit of providing security to our workforce whilst also enabling up-skilling for candidates wishing to further their career in a particular field.

Transition to direct employment with clients

Chandler Macleod encourages employees to transition to direct employment by enabling employees to ‘get their foot in the door’ with a client. Once there we can help them‘shortcut’ client application and selection processes. There is less risk for employees in this model as they have had an opportunity to experience the client’s workplace and know that it is a good fit for them.

We encourage these arrangements with commercial incentives including by ensuring there is no fee charged to the client after our employee has worked with the client for a minimum number of hours / days. This also provides less risk for clients and reduces their recruitment and sourcing costs- they don’t need to spend time advertising, reviewing applications and interviewing candidates when there is a pool of ‘work ready’ candidates who know their supervisors and the business.

In these situations we find there is a high rate of success for our employee and client, as the transition to employment by the client a simple and smooth process.

Assisting business to grow effectively

We help our clients focus of their core business, as we partner to support what can often be dynamic labour requirements. We strongly support the RCSA’s submission that Chandler Macleod helps to increase the overall job creation in Victoria, rather than ‘taking existing jobs’ from employees as some detractors suggest.

Consistent with the RCSA submission, in our experience clients select an on-hire provider for a range of reasons, including:

a) Ability to provide supplementary labour to ‘flex up’ at their sites for additional labour during peak periods;

b) As a way to establish a pool of competent candidates to select from in making their own direct hiring decisions. This often results in transition to direct employment with the clients, noted above;

c) As a new business venture and the client is unsure of their labour demands;

d) The client organisation does not have the skills or expertise to adequately attract, screen, recruit and mobilise talent or the talent needs are diverse (geographically or in skill set).

e) The client organisation does not have the skills to adequately manage a large pool of employees at their site/s. We assist by ensuring that we can apply our HR expertise including performance management, workplace behaviour training initiatives to our employee group, which aids their productivity and can improve culture.

f) We provide subject matter expertise in the awareness of and interpretation of laws and regulations. Often smaller companies will outsource the engagement of temporary (contingent) workforces because they are not equipped to ensure their staff are able to stay abreast of changes and through engagement with Chandler Macleod we encourage compliance to workplace laws.

g) Clients use CMG because we allow them to remain competitive in their market through improving productivity by matching production/services to workforce requirements in a timely manner.

CASE STUDY:

Assisting clients to improve diversity outcomes

In May 2012, Chandler Macleod were approached to supply 67 Stevedores for a newly acquired site south of Perth. Our client partnered with us as they believed we could support their clear diversity strategy. With a target of 20% Indigenous employees and 10% female employees, Chandler Macleod was given four months to source and assess candidates. We exceeded the client’s expectations and saw 216 candidates appointed to Stevedore and Shift manager roles with the client.

CASE STUDY:

Assisting to build partnerships between employees and employers

Chandler Macleod worked closely with our client and Foundation House (a company that supports refugees) to identify opportunities for program participants which would assist the business in achieving its objectives for the Christmas Period. We assisted the client by sourcing, assessing and selecting 15 recently arrived workers and inducting them to the client’s business. We were pleased that 3 employees were able to remain in permanent employment with the client. We continue to partner with Foundation House annually.

Our approach to compliance

Our compliance approach is professional and robust and reflects our status as a large national employer, operating across a broad range of role types and industries.

Our ISO 9001 accredited processes and systems ensure full compliance with minimum Award pay rates and we confirm through a detailed analysis that if we are paying to an alternative industrial instrument (like a client’s Enterprise Agreement) that we can do this lawfully.

Our advice is delivered by an experienced team of HR, ER and IR professionals who support our consultants and local management teams. Additional external expertise is provided by bodies such as Ai Group when required. Our team delivers advice on wide range of matters including performance and complaint management, where we are often able to positively influence our clients in their decision making. We do not accept from clients the view that labour hire employees are less valued.

Our large professional payroll team ensures employees receive their pay and superannuation along with payslips outlining their entitlements. We manage accruals across many various state based systems for long service and industry contribution schemes as well as annual leave, sick leave and RDOs for a range of employees.

We work on continually improving and investing in our compliance systems including encouraging the utilisation of electronic time keeping by our clients. With close to 600,000 payslips generated each financial year, we monitor the accuracy of our payroll process intensively and most recent figures show we achieve 97.86% accuracy. We note the outcomes of the Fair work Ombudsman’s compliance initiative that indicated that On-hire providers had higher rates of compliance that direct employers.

CASE STUDY:CHANDLER MACLEOD ASSISTING OUR CLIENTS TO IMPROVE ITS COMPLIANCE

APPROACH

Our client a large national poultry producer had over time ended up relying upon a range of supplementary labour models in its business. Following a Fair Work Ombudsman investigation it was highlighted that many of their providers were not ensuring that workers on their sites had valid working rights and were being paid minimum award conditions.Chandler Macleod participated in the FWO investigation and was found to have no compliance issues for follow up.They turned to Chandler Macleod and another reputable supplier to address these compliance issues. Chandler Macleod supplies workers to these sites that are lawfully able to work and ensures that employees receive the minimums of either the site enterprise agreement or the award. Our employees attend both Chandler Macleod and client site inductions and understand how to raise safety issues no matter how small. Unlike previous suppliers there is no ‘independent contracting’; no piece rates; no threats or coercion regarding immigration overstays and no failure to register employees for workers compensation. We are helping our client deliver workers who receive all the conditions that they are entitled to in an Australian workplace.This example demonstrates that employers and on-hire providers can partner to deliver better outcomes for employees.

Our approach to Industrial Relations

We have a productive relationship with many union branches across Australia, and genuinely respect the right of Freedom of Association as outlined in the Fair Work Act 2009. For example; we facilitate union deductions for any employee who requests these, we have clear policies in relation to Right of Entry and partner with our clients when requests are made; and where our employees become union delegates we respect this decision.

Additionally in Victoria, SA and WA we facilitate unions such as the NUW being invited to meet new employees during inductions to discuss benefits of union membership. We also bargain productively for Enterprise Agreements with union representatives where it facilitates our continued partnership with employees and clients.

We work with a client to understand if their applicable Enterprise Agreement contains a ‘site rates’ clause in relation to on-hire labour. In our experience we have seen many instances where productivity is retained or enhanced on a site where pay and conditions parity is maintained between direct hire and on-hire employees.

If a client elects not to comply with such a clause then, as we are not lawfully a party to that Enterprise Agreement, the client must contend with the legal ramifications of that decision. As all Enterprise Agreements have by law, dispute resolution clauses, we would encourage an aggrieved worker or union to ventilate that issue at the Fair Work Commission and seek enforcement remedies via readily available legal avenues.

Where a client elects not to have such a clause in their agreement then the relevant industrial instrument is the Modern Award. The terms and conditions set by the Fair Work Commission form a fair and consistent benchmark for the particular industry or occupation and we ensure we meet these conditions.

Case Study:

Negotiating a Greenfield Agreement in the Black Coal Mining Industry

When Chandler MacLeod was considering tendering for an opportunity at a black coal mine that was yet to be opened, we built a relationship with the CFMEU, and negotiated an enterprise agreement. We partnered to deliver an agreement that in large part mirrored many Award conditions but reflected the local practices. The CFMEU has strong views about on-hire models, but worked with us to understand our competitive pressures and ensure we ended up with an agreement that was largely competitive with other on-hire agreements in the region. This approach has enabled us to build an open and collaborative relationship that assists us in resolving workplace issues as our business has substantially expanded in this region.

Our approach to Safety

We regard our commitment to Safety as first and foremost a moral responsibility and one that is key driver of our business growth and profitability.

We have reduced our TRIFR by 40 % in the last 36 months.

We have achieved this across a range of industries and clients, by embedding a strong safety culture and applying Chandler Macleod's safety knowledge and expertise to improve the condition of workplace practices and behaviours.

With oversight by our GM for Occupational Health and Safety and state based OHS specialists, Chandler Macleod ensures that with exception:

a) All employees are screened in accordance with the standard process we

would apply for that client;

b) We know the work environment of all employees is safe by performing a

safety assessment (Client Risk Assessment); and

c) We are party to the work instructions and/or safe operating procedures

provided by the client to the employee.

Our OHS Management System is formally accredited against the international OHSAS 18001 and regional AS/NZS 4801 Occupational Health and Safety Management Systems. It comprehensively covers the legislative requirements and internal processes which are addressed on a state-by-state and site-by-site basis.

We have been recognised both within our industry as the winner of the RCSA, Mclean award for workplace safety in 2014 and by Workcover in Victoria for employer excellence in return to work in 2014.

Supporting the OHS Management System is Chandler Macleod’s “beyond compliance” approach to safety, striving for “best case” safety outcomes. For example, Chandler Macleod’s Consulting division applies psychometric testing and behavioural development programs internally to identify and control risk taking behaviour in recruitment and placement teams. Additional innovative safety initiatives we have introduced to our employees across an array of industries have included:

a) Chandler Macleod has released its own Life Saving Commitments based on historical data and client workplace experiences.

b) Our employees are required to undergo a full Chandler Macleod OHS Induction as part of their registration process. Our induction process incorporates all aspects of our OHS policies and procedures, industry specific hazards applicable to the industry the candidate will be working in and a competency based questionnaire. Additionally then employees receive site specific induction and training on commencement.

c) Mobility Assessment Tool (MAT) - MAT is a pre-employment screening tool designed to reduce the risk of manual handling injuries in blue collar workplaces.

d) SMS Injury Alerts. Our safety team are alerted to a workplace incident and commence an investigation as soon as possible after it occurs, with details on what happened, how it happened and how to avoid it happening again.

e) First Three, Injury Free. Our experience tells us that the 40% of incidents occur in the first 3 months on assignment. This is the time an employee is most likely to either leave an organisation or be more susceptible to injury of themselves or others. To prevent this we implemented a program of Email and SMS alert system targeting new employees to alert them to the hazards of working in a new location.

f) Monthly Safety Surveys and Feedback Forms, to encourage employees to raise and respond to questions relating to recent safety activities.

g) Workplace Presentations. We have partnered with organisations such as the Paraplegic Benefit Fund and the Workplace Tragedy Family Support group to deliver safety culture presentations that convey a powerful message about the importance of personal and workmate safety. We have also hosted several Paralympians discussing the importance of workplace safety.

h) Employee Assistance Program is made available to all on-hired employees, free confidential service offers counselling for work or non work related concerns that employees may have from time to time.

Case Study:

EMPLOYEE ESCALATES A SAFETY CONCERN-HOW WE PARTNER WITH OUR CLIENTS

An employee at a wholesale distribution facility was operating an electric pallet jack and stock picking, under supervision on his 3rd day of work. He observed that an emergency stop button on this pallet jack was missing, our consultant raised it with the trainer at the site who said that “half of the machines have them missing”. Our consultant was not satisfied with the response and escalated the matter to the client’s senior management team that day who actioned the replacement immediately, enabling our employee to safely continue his work. This demonstrates how Chandler Macleod can assist in driving excellent safety outcomes for both its employees, and those of our client.

Labour hire, vulnerable workers and current regulatory models

Identifying the scope of labour suppliers and distinguishing between reputable on-hire firms

The RCSA made submissions in relation to the multiple and often confusing terminology used in this industry. As large national employer we strongly condemn the practice of supplying‘labour’ with no consideration of the legal implications of the relationship. Such operators damage the industry and existing compliance initiatives should continue to focus on sectors such as agriculture that still attract these rogue operators.

We note that a media attention centres on the horticulture and agriculture Industries in Victoria. We have observed when investigating new clients in these industries, that there can


be a tendency to engage in compliance avoidance through the use of third party suppliers. As a business with a long standing reputation, and servicing some of Australia’s largest businesses, we work diligently to educate our clients about lawful engagement models that would address their business needs. Our experience tells us that where we present in detail about our model and our attention to compliance that we can quickly determine whether the client is seeking to genuinely partner with us.

We have observed that in at least the last 18 months, since greater media attention was placed on suppliers regarding both their legal and moral responsibility to investigate compliance in the labour supply chain that there has been an improvement in compliance in‘hot’ areas of vulnerable workers such as regional locations in the agriculture industry. The compliance obligations have remained the same during this period, the concern for reputational impact has dramatically increased. This demonstrates that industries will self regulate where there is enough perceived or real impact to their customers and profitability.

Addressing Misconceptions in the Labour Hire Industry

Wages and conditions of labour hire providers

Some lobby groups criticise labour hire but fail to distinguish in their commentary between reputable companies like Chandler Macleod and other less reputable companies less concerned with legislative compliance, for example;

Labour hire engages in sham contracting:

The majority of our workforce is engaged through an on-hire employment model. We utilise a range of casual, maximum term or permanent employment arrangements. We have a small segment of properly contractors who operate ASIC registered companies in professional industries such as IT. This is consistent with the RCSA submission on industry wide data.

Labour hire takes advantage of visa holder labour:

Chandler Macleod does have some employees who are lawfully engaged under various visas that contain restrictions to work; commonly working holiday visas or student visas. Recent data shows only 3% of our employees working in Victoria hold a visa with working restrictions. We carefully monitor these conditions to ensure compliance.

Labour hire is a tool to drive down wages:

This is a flawed argument, firstly we meet lawful wages applicable to all national system employers and additionally we must deliver market pay rates to our employees at all times, in a highly competitive market place or we lose business. It is counter-intuitive in both our commercial pricing model (where generally speaking the higher the rate the higher the dollar margin we can obtain) and to our business planning to offer the lowest possible rates for work, valuable employees will leave us and work for a competitor.

Further as our Victorian business demonstrates at least 75% of our employees would receive wages in excess of Modern Awards. For example in many white collar industries in IT, Banking and Finance and government clients the market dictates rates of pay far in excess of current Award minimums.

Conclusion

We consider that the existing forms of regulation that apply to our national business sufficiently ensure an appropriate balance of ensuring we manage our legal and social responsibility to the community with that of the commercial obligations to our shareholders.

The RCSA submission highlights the workplace relations system in Australia is already heavily regulated in a national and consistent manner via the Fair Work Act 2009 and via OHS laws. These laws provide enforcement mechanisms, including key roles for both government and union officials to address non compliance issues, whether inadvertent or reckless.

As a reputable employer, we work collaboratively with regulators to ensure that we meet or exceed legislative compliance requirements. Further as such obligations are consistent across Australia, enabling us to deliver an efficient and cost effective service, additional state based regulation adds complexity and cost to business, clients and ultimately consumers.

Chandler Macleod supports the RCSA led approach to improve self regulation that would help our clients to more clearly delineate between reputable and disreputable providers in the industry.

While we are not entirely sure about what models of regulation the Inquiry is considering subsequent to this review, our general observation, echoed in the RCSA submission is that a where rogue operators engage in deliberate evasion of compliance obligations that additional layers of regulation rarely fix the problem and can be addressed under current legislative provisions.

Key questions remain about how and by what means would ‘breaches’ of licensing standards occur, who would investigate these breaches, how long would it take for an alleged breach to be proven and then what would stop a ‘dodgy’ provider from closing down and restarting again.

We submit that a reputable business like Chandler Macleod under this model would have increased costs of operation, for what is not likely to eventuate in any reduction in rogue operators, which appear to form a very small part of the labour hire industry.

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