Workers Online
Workers Online
Workers Online
  Issue No 14 Official Organ of LaborNet 21 May 1999  

 --

 --

 --

Unions

The ACTU Faces the Labour Hire Challenge

By Max Ogden - ACTU Industrial Officer

The enormous growth in labour hire and contracting out employment is creating a big challenge for unions worldwide.

With about 1.7 million employees on their books, the US company Manpower which operates in 40 countries, believe they are now the worlds largest private employer. Adecco a Swiss/French company claim they are not far behind in size with a turnover worldwide last year of about $16 billion.

Labour hire now reaches into areas previously untouched. Teaches, nurses, engineers, information technologists, find themselves on the books of these companies.

We need to clarify terminology describing the various types of labour hire/contracting so we understand what we are talking about. There have been various forms of contracting and labour hire that have been around for sometime, and are reasonably under control. Electrical contracting where employees will often work for the same company over a number of years is an acceptable and appropriate method for that industry, and the union has been able to organise, and maintain wage and skill standards.

Labour hire when it is about limited term, supplementary labour e.g. in maintenance for major breakdowns, new installations, construction, etc., has largely been contained by the unions, and agreements such as the Victorian Labour Hire Agreement, and agreements in the building industry have maintained decent wages and conditions. Similarly contract office cleaning outside normal working hours made sense, and while the union had to be vigilant, could keep it under control with appropriate awards. The system was fairly limited and the flexibility attracted some people who liked working that way.

The big change, often stemming from government privatising and contracting out, has been to use such forms of work for cutting wages and conditions, and achieving management's aim of numerical flexibility by engaging and releasing staff sometimes on an hours notice. Many people are forced into this form of work whether they like it or not.

An interesting new feature, although it has been in the mining sector for sometime, is that of contracting out the whole management and employment function of a company. The larger companies such as Manpower, Adecco, etc., operate virtually everything while the host company is nothing more than a board, and a few executives. The argument for these arrangements is that it gives the host company greater flexibility without the responsibility of direct employment, employment instability enables the contractor to keep wages and conditions lower, and the contractor claims that they achieve higher productivity through their human relations management expertise, which is basically all they do.

This is particularly prevalent in the information technology industry. I.T. companies will contract out their whole manufacturing operation. Sometimes the manufacturer will produce hardware for a number of I.T. companies thus providing greater volume. This approach is not necessarily a problem providing the employment, wages, conditions, union rights, and training are protected.

Some experts argue that this form of managing and employment will continue to grow because markets are now so volatile, and products and services change so rapidly, that companies need a mechanism to change direction very quickly, and contracting out employment and management provides that facility. This maybe true, if the sole competitive factor for a company is labour cost.

However the method a company chooses to manage and employ its workforce is more complex and is dependent on other factors both external and internal. These are, the market it is in, the climate created by government, whether or not there are pressures for short term share price gains from the stock market, the strategic objectives of the board, the competence of management, strength of the unions, etc..

Different companies in the same market will do things differently. For example some have opted for skilled employees, working in flexible systems such as work teams, with fewer management layers and devolved decision making, with the emphasis on employment security, constant learning, innovation, commitment, and competence. A recent example of a company doing things different to their competitors is how Coles/Myer opted for more permanent employees, minimising casuals with a view to more commitment and trust. Theft and security because of the casual workforce was a reason for the change of policy. There is no doubt which system the unions should prefer.

A bad effect of the core/peripheral employment strategy is the virtual collapse of training. Very few labour hire companies have any margin for training, and some of their contracts even preclude it, and few employers will train casuals. At the very time when we require a highly skilled, innovative, committed workforce to take the high value added, high road economy, we are heading in precisely the opposite direction.

The Response From the Union Movement

Virtually all surveys conducted by unions recently demonstrate an overwhelming concern by the members about work stress, long hours, and job insecurity. As a result the ACTU and most unions have determined that the core issues for the next few years to combat the employer/government agenda are working hours/working life, job insecurity, casualisation, excessive hours, and labour hire/contracting out. The main focus in campaigns and agreements is aimed at the host companies to get greater permanence of employment, and minimise casuals using the following approaches:

1. Negotiate agreements that give unions some say or even control over contracting out, or the use of supplementary labour, preferably starting right at the tendering process. All unions are currently discussing and implementing a standard negotiating clause developed through the ACTU to achieve these objectives.

2. Minimise casualisation through various means, e.g. a maximum ratio of casuals to permanents, a maximum period for employment of casual employees before they have to be made permanent e.g. 4 weeks, 8 weeks, 3months, depending on the circumstances, rights to negotiate before casuals are engaged. A standard clause has been developed for this purpose.

3. Negotiate agreements with the contracting companies that maintain wages, conditions, union rights, and training at no less than the level currently operating in the host company. A national framework agreement is in existence with Manpower, and one is about to be conclude with Adecco. These set out broad principles, but like most agreements require vigilance by the unions to ensure the standards are met. These agreements are not earth shattering, but those unions with less industrial muscle can get a foot in the door.

4. Unions wherever possible to demonstrate that contracting out/labour hire, casuals etc., is very often inefficient and does not deliver a quality product or service. There are examples of companies changing their approach because core/periphal employment policy was uncompetitive.

5. In the longer term for the unions to work with the ALP and the broader community to pursue a high value added, high road, high knowledge industry policy\economy which will be helpful in delivering the core union objectives.


------

*   View entire issue - print all of the articles!

*   Issue 14 contents

In this issue
Features
*  Interview: Madame President
The new President of the NSW Legislative Council Meredith Burgmann has spent most of her life opposing authority. Now she has a chance to exercise it.
*
*  Unions: The ACTU Faces the Labour Hire Challenge
The enormous growth in labour hire and contracting out employment is creating a big challenge for unions worldwide.
*
*  History: The Wartime Women�s Employment Board
During World War II policy makers were forced to embraqce a unique wage-fixing method.
*
*  Labour Review: What's New from the Information Centre
View the latest issue of Labour Review, Labor Council's fortnightly newsletter for unions.
*
*  Review: Origlass Biographer Keeps Red Flag Flying
The self proclaimed 'ultra-democrat', Hall Greenland, has described his relationship with the Balmain legend Nick Origlass as "Freudian".
*
*  International: Paddy's Payback
But for the Timorese many Australian diggers, like retired wharfie Paddy Kenneally, would have died at the hands of the Japanese during WW2. Now it's time to return the favour...
*
*  Campus: Tales from the Frontline
This week's successful VSU protests seem to have killed off Kemp's ideological agenda. We go live to the protest
*

News
»  Call For IR Crisis Talks as Country Conference Looms
*
»  Workers Sacked for Body Hire
*
»  British Union Secures Free Net Access
*
»  Cab Charge Wars: SBS Workers Fight for Their Lives
*
»  State Wage Case Smooth - Except for Brack
*
»  FOI Loopholes Could Leave Public Servants Exposed
*
»  Drug Summit Misses Tokin� Gesture
*
»  Public Will Lose Again From Rail Sackings
*
»  Robin Hood Strikes Again
*
»  CPSU shows it cares�
*
»  Unions Take Action on Timor, Stolen Generation
*

Columns
»  Guest Report
*
»  Sport
*
»  Trades Hall
*
»  Piers Watch
*

Letters to the editor
»  Faction Calls Miss Point
*
»  Don't Ignore the Class Divide
*
»  Timor: Look at the Map!
*
»  Songs of the Revolution Feedback
*

What you can do

Notice Board
- Check out the latest events

Latest Issue

View entire latest issue
- print all of the articles!

Previous Issues

Subject index

Search all issues

Enter keyword(s):
  


Workers Online - 2nd place Labourstart website of the year


BossWatch


Wobbly Radio



[ Home ][ Notice Board ][ Search ][ Previous Issues ][ Latest Issue ]

© 1999-2000 Labor Council of NSW

LaborNET is a resource for the labour movement provided by the Labor Council of NSW

URL: http://workers.labor.net.au/14/b_tradeunion_max.html
Last Modified: 15 Nov 2005

[ Privacy Statement | Disclaimer | Credits ]

LaborNET is proudly created, designed and programmed by Social Change Online for the Labor Council of NSW

 *LaborNET*

 Labor Council of NSW

[Workers Online]

[Social Change Online]