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Labour hire firms put in the hot seat

LABOUR hire’s old contract-broking model looks to be on the way out in WA, with the State Government naming labour hire firms as ‘employers’ in its proposed Labour Relations Reform Bill.

This means labour hire firms can be drawn into the industrial relations system and can have awards made on their areas of operation.

It also makes them easier targets for unions looking to organise their workers.

The Bill also lifts the casual employment loading from 15 per cent to 20 per cent.

However, the labour hire industry does not seem overly concerned about these developments.

Its peak body, the Recruitment and Consulting Services Association, believes labour hire firms have been becoming employers for some time.

Consumer and Employment Protection Minister John Kobelke said labour hire firms had been named as employers in the Bill to help protect the workers operating as contractors.

“The labour hire industry has presented a number of problems for workers where they have been denied the right to claim for unfair dismissal and contractual benefits,” Mr Kobelke said.

“The changes in the Labour Relations Reform Bill will ensure these workers have rights under the Act.

“These changes will in no way impact on genuine contractors.”

RCSA WA workplace relations committee convenor Stuart McLean said he believed the labour hire industry had to take on more employees as it moved forward.

“This helps to keep the skills base within the organisation,” he said.

“I think the permanent employee move is part of the natural progression for the industry so I’m happy for the Bill to consider us as an employer.”

Mr McLean admitted the naming of labour hire firms as employers would hurt those operating as contract brokers.

“But I think most large labour hire firms have moved towards the employee model,” he said.

Mr McLean said the RCSA recognised Awards as the minimum conditions of employment.

“Some companies will be hit by the casual loading increase, especially if they locked in contracts at 15 per cent without a clause allowing for increases due to statutory changes, but most of the larger firms are paying 20 per cent anyway,” he said.

Deacons senior associate Alistair Salmon said this move should be a concern for the labour hire industry because it drew them into the IR system.

“This sector has grown considerably over the past 10 years – largely at the expense of the unions,” Mr Salmon said.

“It is easier for a union to organise the one workplace. If the contractors become the employers of the labour hire firm it is easier for the unions to force an Award on them.”

Employers are concerned with the change. They fear it could have an impact in the construction industries that use labour hire firms extensively.

However, they admit labour hire firms have been taking increasing responsibility for their contractors.

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