Labour hire in crisis?
Labour Hire firms facing million dollar liabilities over entitlements ruling
Wednesday 31 January 2018
A Mackay based industrial relations specialist says companies across the coalfields could be facing “back-pay” liabilities worth millions of dollars and possibly even administration if a court decision to cancel a Labour Hire enterprise agreement stands.
According to Mackay based Workplace Consultant Craig Joy, a case currently in front of the courts involving well-known labour-hire firm OneKey Resources has significant implications.
Mr Joy says just four administrative people voted to accept the original EA, but later more than 1000 operational people were employed casually under it.
“The Enterprise Agreement was revoked by the court because the judge felt it was not genuinely agreed,” he told Shift Miner
“With the EA [retrospectively] cancelled, the Coal Mining Award takes effect, which has far more generous provisions for sick pay, holiday pay and redundancy.
“And that decision has big implications for OneKey because they could be liable for millions of dollars in back pay for anyone who worked as a casual under that EA in the last few years.
“Having to do that would make most of the work done [with that labour force] loss-making, and would put an enormous strain on their business.
“OneKey has had to put up a significant amount of money as surety to cover this liability, but if they lose the appeal, my understanding is that the actual cost could be considerably higher.
Concurrently, Mr Joy says another case involving Workpac is also being watched closely.
In that case, a miner employed by Workpac on a casual - or labour hire - basis for three years is challenging the legitimacy of his employment contract.
“At issue, is how you define casual employment,” he said.
“In the Workpac contract being examined by the court, the same employment contract was being used for permanent and casual employees.
“Which aspects of the contract applied to you depended on what box you ticked on the back page about your employment status.
“In the Fair Work Act and the Coal Industry Award, there is no reference to permanent workers, just full-time, part-time and casual, so you need to very careful about using the word permanent.
“However the Fair Work Act and the Coal Industry Award also don’t define the term casual, so in that case, it diverts to a dictionary definition, and they're 20 years behind.
"All it says is that casual is either irregular or uncertain.
“Well everybody accepts in the real world, casual means you get a casual loading, but the court has to use the definitions provided.
"It looks at the miner and sees he’s been working 7-on-7-off for three years, and if he hadn't left he probably still would be.
“Well that's not casual according to the definition, therefore under Workpac’s EA and contract, he must be permanent, and so we get to the same place.
“ In hindsight, it suggests he should have been paid annual leave, sick pay, and even redundancy which are very generous under the Coal Mining Award.
“I have had lots of calls from business worried about what both cases mean for them.”
The next hearing for the One Key case is set down for early March.