The Australasian Centre for Corporate Responsibility (ACCR) made a submission to the Select Committee on Job Security today.
ACCR’s submission focuses on indirect employment and outsourcing.
The boundaries of a company’s workforce increasingly stretch beyond its direct employees, to include labour hire agencies, sub-contractors, service contractors, independent contractors, and even gig economy workers. ACCR’s submission analyses the dynamics, trends and impacts associated with this “fissuring” of the Australian workplace, highlighting the risks for workers, companies and investors.
Katie Hepworth, Director of Workers’ Rights at the Australasian Centre for Corporate Responsibility (ACCR) said:
“While statistical data on indirect employment in Australia is limited, it is clear that in some sectors, such as mining, construction, cleaning and agriculture, companies are outsourcing a staggering proportion of their workforce to external entities.
“The fissuring of the Australian workplace erodes job security and working conditions in the present, and negatively impacts on workers ability to achieve dignity in retirement. It is also a risk for companies, and their investors.
“A company’s workforce mix is material to its performance, and decisions by companies about how they structure their workforces will have long term impacts on company performance and shareholder value. If companies are relying on a large proportion of 'indirect' workers to operate, then information about these workers should be included in annual reporting.
“However, at the moment many companies are failing to provide investors and the public with even basic information about their workforces, such as the percentage of labour hire and contract workers in their total workforce.
“During the COVID pandemic, we have seen the risks of complex contracting and subcontracting arrangements materialise. Incidents where outsourced workers were not given correct training, adequate Personal Protective Equipment (PPE), and even minimum wages and conditions, all highlight the wider implications of 'fissured' workplaces.
“Responsible stewardship requires investors to engage companies on their entire workforce. Investors must look beyond direct employees, to understand the entire mix of contract types and outsourcing models that companies are deploying in their business.”
ACCR submission to the Senate Select Committee on Job Security.
ACCR is currently engaging companies in sectors that have significant exposure to risks associated with outsourcing and indirect employment, including horticulture, commercial cleaning, mining construction, large scale solar and warehousing. These sectors may be exposed to significant outsourcing risks due to the percentage of the workforce that is employed via third party agencies, or the severity of the risks associated with the outsourcing of labour (up to and including modern slavery).
ACCR’s report Labour Hire and Contracting across the ASX100 highlights the key business, operational and workforce risks associated with the use of labour hire and contracting
ACCR’s investor brief Broken chains of responsibility: Victorian COVID clusters reveal subcontracting risks, details how labour hire and subcontracting increased the risks of COVID transmission