Estha van der Linden , Senior Policy Adviser Business SA
The issue with rogue labour hire companies in Australia is a real one. A Four Corners report in 2015 exposed the plight of migrant workers who had fallen victim to these operators. By cutting costs through reduced wages, lack of proper work, health and safety systems, and avoiding other legal obligations, these rogue operators damage legitimate businesses doing the right thing.
The State Government has introduced a Bill to Parliament to license all labour hire companies in South Australia. The scheme will require any business that supplies a worker to pay a license fee, pass a fit-and-proper person test, and provide regular reporting.
In an environment where businesses are already faced with complex workplace relations laws, we are concerned about any legislation which creates additional red-tape and business costs. Any new scheme must be easy to work within, be of minimal cost to businesses and, most importantly, it must work.
Unfortunately, there are complex reasons for the prevalence of rogue labour hire operators and the registration of labour hire companies is not a cure-all. There are already legal requirements for safe workplaces, payment of wages, payment of return to work premiums and significant penalties for breaches, but to date these have not proved effective in weeding out the rogue operators.
At present, if unauthorised migrant workers are discovered, they fear enforcement mechanisms under immigration laws will take effect and their visa will be cancelled. There is therefore no incentive for the most vulnerable category of workers to report non-compliance with workplace laws, or with any labour hire registration conditions when such a scheme is introduced.
Issues with retailers and end users also play a role. The competition between major supermarket chains for fruit and vegetables puts considerable pressure onto suppliers to cut costs, including within the labour supply chain. The suggested licensing scheme only concerns those at the lowest-end of the supply chain, being labour hire providers and their users, who are least able to absorb additional costs.
While several states and the Federal Government have undertaken inquiries into the labour hire industry and rogue operators can be found across Australia, they only make up a small portion of the market. The reputations of good labour hire companies and the industry are being tarnished by dodgy operators continuing to exploit workers. It is important to remember that labour hire staff are an important part of the Australian workforce in industries such as retail, tourism, events, hospitality and agribusiness due to the seasonal nature of the businesses, and that a majority of labour hire companies are doing the right thing.
The question is, will the new laws stop dodgy operators from doing the wrong thing and stamp out criminal and rogue behaviour, or just increase costs and penalise law-abiding businesses for not complying with red-tape and paperwork? Business SA is hoping a balance can be struck to benefit both workers and legitimate businesses.