Brian Howe address to ACTU Congress 2012

Brian Howe speaking at ACTU Congress 2012

Confronting the risk and tackling the challenge of insecure work

Address by Brian Howe, AO

Chair of the Independent Inquiry into Insecure Work in Australia

Thank you Chair.

I’d like to begin by acknowledging the traditional owners of the land on which we are meeting, the Gadigal people, and their elders both past and present.

I’d like to thank the ACTU for inviting me to speak today, and particularly acknowledge:

  • Joe De Bruyn, ACTU Vice-President (in the Chair)
  • Ged Kearney, ACTU President
  • Jeff Lawrence, ACTU Secretary
  • Dave Oliver, ACTU Secretary-elect.
  • Fellow members of the Independent Inquiry – Paul Munro, Sara Charlesworth and Jill Biddington.
  • It is my pleasure this morning to present to you the report of the Independent Inquiry into Insecure Work in Australia.

    Six months ago when I was asked to chair this Inquiry, I have to admit that I didn’t have a clear understanding of the scale of the problem we’re talking about today.

    With my fellow Panel members – Paul Munro, Sara Charlesworth and Jill Biddington – I have been confronted by the rapid growth of insecure work right across our economy.



    The growth of insecure work


    The internationalisation of Australia’s economy over the past 30 years has undoubtedly improved living standards in Australia.

    At the same time however, the changes that have occurred in our economy and society have also given rise to the unprecedented growth of insecure work.

    This has occurred for a number of reasons, but the key driver has been the emergence of a business model across the entire economy that shifts the risks associated with work from the employer to the employee, and minimises labour costs at the expense of job quality.

    In some ways the spread of insecure work has taken place under the radar of the political class.

    There has been significant research and increasing interest among academics.  But there has been no thorough public inquiry into the effects of a trend which effects up to 40 per cent of the workforce in some kind of casual, contract, labour hire or other insecure arrangement, and sees a quarter, 25% of workers with no sick leave or paid leave.

    This was an issue crying out for a deep, far-reaching investigation – which I hope we have delivered.

    But investigation is not enough – the growing crisis of insecure work cries out for action that will translate our findings into real change for the people most affected.



    Stories from the Inquiry


    The stories we heard throughout our Inquiry were compelling, not to mention confronting.

    Over 25 days of hearings in 22 towns and cities, we visited every state and territory.

    We heard from workers in every sector of the economy whether in capital cities or in regional areas – men and women, blue collar and white collar, working in the public sector and the private sector , in secondary or tertiary industries or service industries.

    Across the board we heard the same story – the story of the new divide in the Australian economy.

    It is not between the blue-collar and white-collar worker, but between those in the “core” of the workforce and those on the “periphery”.

    Those in the core are likely to be in full-time employment, either permanently within organisations, in management positions, or possessing skills for which there is steady demand and for which they can charge a premium.

    They are likely to have sick leave, paid holidays and in many cases parental leave above the government’s minimum standard.

    For them, flexibility means the chance to work in a variety of industries, to work overseas, to earn good money free-lancing or in a secure part-time arrangement. Periods of unemployment are likely to be short or voluntary.

    Below and around this group are those on the periphery. They are employed on various insecure arrangements, casual, contract or through labour hire companies, on low wages and with no benefits.

    Many do not know what hours they will work from week to week, and often juggle multiple jobs to attempt to earn what they need.

    Their skills are low, or outdated, and they are not offered training through work. They shift between periods of unemployment and underemployment that destroy their ability to save money.

    Their work is not a “career” – it is a series of unrelated temporary positions that they need to pay rent, bills and food.

    For them flexibility is not knowing when and where they will work, facing the risk being laid off with no warning, and being required to fit family responsibilities around unpredictable periods of work.

    For many, life on the periphery is not a temporary situation; there is no pathway in to the core.

    Contrary to the views of some in the business lobby that workers are attracted to casual and temporary work because of the flexibility it offers, the evidence we heard confirms that there are huge number people engaged in insecure work who want more secure and stable working arrangements, but find themselves trapped on the periphery of the workforce.

    We saw evidence of this right across the economy:

  • In every city and town we visited we met school teachers, TAFE teachers and university staff employed on a casual basis or on rolling fixed-term contracts. What was once seen as a life-long vocation at the end of years of tertiary study is now treated by the Government as a temporary job.
  • We met countless casual workers in low-paying industries like security, contract cleaning, call-centres & child care – workers who face unstable and variable working hours, pay so low that many of them have to hold down two or three jobs to make ends meet, little or no access to paid leave, and little or no say at work.
  • In Sydney we heard from women paid piece rates in the textiles industry that amount to $4 to $5 per hour to produce garments with a retail value of up to $1,000. The multilayered supply chain they work in means there might be five or six contracting levels between the worker and the retailer, leaving these women with no bargaining power and no ability to push back against intimidation, harassment and bullying.
  • Insecure work is rife in the not-for-profit sector – particularly amongst frontline workers delivering critical community services.
  • The Commonwealth and State public services are increasingly engaging fixed-term contractors and labour hire agencies to deliver core activities, at the expense of ongoing employees – the NSW State Government alone spends $500 million annually employing nearly 12,000 temporary employees through labour hire agencies.
  • We heard many accounts of contractors working in the telecommunications industry who, though independent by law, are in reality dependent on a single client and in some cases explicitly required under their contracts not to accept any other work.
  • Workplaces have emerged in manufacturing, warehousing and logistics where the vast majority of workers are employed through labour hire agencies – an environment where employees are afraid to raise issues about their pay, conditions or occupational health and safety for fear of not being given any more shifts.
  • In one case in western Sydney, we encountered a manufacturing plant were the entire staff were employed as casuals through a labour hire firm. Employees were expected to be available for a full-working week, and were notified by text message around 4pm each day of whether and when they were required to turn up the next day – but without any information about how long their shift would be.

    Again and again there were illustrations of the insensitivity of employers to the importance of certainty in rostering for families either caring alone or sharing caring for children or agent parents or someone disabled.

    Providing protection and investing in the workforce

    Put simply, these workers require greater protection in our industrial relations system.

    But tackling the problem of insecure work cannot be reduced to a question of regulation.

    The technological and information revolution has transformed the nature and organisation of work, requiring an ongoing commitment to improving the education and skills of our work force.

    An open economy in an internationally competitive environment like Australia’s will never be able to compete by driving down labour costs. Instead we need to focus on productivity, innovation and improving the skills of our workforce.

    To do that, we need to be radical in thinking about new approaches to training and educating our workforce.

    Without very serious investment in marginal workers nothing much is going to change.

    There is a message here for business, which ignores the rise of insecure work at its peril. A business model that is predicated on short-term profits generated by widespread use of insecure work is unsustainable in the long run.

    This has been highlighted during the shallow national debate around productivity, in which business groups have attempted to convince us that the only way to increase productivity is to cut wages and conditions.

    This ignores the fact that the main long-term drivers of productivity are investment in industry, infrastructure and in the skills of workers.

    As Michael Keating, the former head of the Department of Prime Minister and Cabinet, has noted, “the critical problem facing Australia is that there is a structural mismatch between the labour supply and the demand for labour. There is a shortage of skilled labour and a substantial excess supply of people with low education and skill levels.”

    The nature of the training required has also changed.

    In the past most training for people without post-school qualifications was provided by their employers, at the employer’s cost. But this approach biases training in favour of very job specific competencies.

    In a world of constantly changing technology, people need more generic skills that enable them to change jobs and to engage in continuous learning.

    Our recommendations

    We have made a number of recommendations setting out how we believe this might be achieved.

    First, labour law must be reformed to provide a universal set of protections to all Australian workers.

    Our report outlines some principles for how this can be achieved.

    Australia must pursue universality in labour law. Doing this effectively requires:

  • Expanded definitions of employers and employees;
  • Reforms to better capture indirect employment arrangements like labour hire and dependent contracting;
  • A firmer definition of casual work; and
  • Expanded National Employment Standards that create a set of inclusive minimum standards that protect all employees.
  • We have also provided recommendations on how our industrial relations system can be reformed to provide stronger legal pathways from insecure work to ongoing employment.

    However, as I have said simply refining labour market regulation won’t limit the growth of insecure work.

    To provide decent work for all, we also need to ensure that an effective safety net is in place for people who fall out of work and invest more in our workforce – especially the most disadvantaged.

    We have called for a number of reforms aimed at achieving a more skilled workforce, including:

  • A broader focus on work-life transitions, rather than the narrow preoccupation with the transition between employment and unemployment that has given led to an emphasis on ‘Welfare-to-Work’ initiatives.
  • A commitment to lifelong learning, including a call for the ACTU to investigate learning accounts as a model for investing in the capability of workers over the lifetime.
  • Reform to Australia’s tax and transfers system to provide a stronger safety net by:
  • Addressing the inadequacy of the Newstart Allowance;
  • Simplifying income declaration systems; and
  • Abolishing the Liquid Assets Waiting Period.
  • Changes to the way Job Services Australia interacts with forms of insecure work such as labour hire.
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    We have also called for the ACTU to investigate models for a comprehensive system of employment insurance.

    Government also needs to take its role more seriously, and recognise just how influential it is as one of the largest employers in the country. Governments at all levels need to make stronger use of their leverage as employers, funders and purchasers to support secure forms of employment.



    The challenge for the union movement


    The crisis of insecure work cries out for action that will translate our findings into real change for the people who need it.

    In many ways, our Inquiry has barely scratched the surface of the issue of insecure work.

    To take our work forward, it is time for the ACTU and the broader union movement to commit to a deeper engagement with the community to tackle insecure work.

    There is a felt grievance in the community about the way our relationship with work has changed, and the consequences this has had for workers, their families and the community.

    I’d like to thank the ACTU for commissioning our Inquiry.

    Rather than try to turn back the clock on the reforms of the past quarter of century, the union movement needs to provide a vision for the future of work in the post-industrial economy.

    I know that you will take up the challenge.