Construction labour hire compliance scores an F from ABCC audit

The Australian Building and Construction Commission recently released its Labour Hire; Campaign Report (June 2020).

ABCC inspectors carried out compliance audits on 63 labour hire employers across the building and construction sector. These employers were located throughout Australia (16 in Qld, 15 in NSW, 10 in WA, 9 in Vic, 7 in SA, 3 in NT, 2 in Tas, 1 in ACT), most were selected randomly and a minority were specifically targeted due to complaints or queries received.

The purpose of this specific ABCC campaign was to audit compliance with the Fair Work Act 2009 (FWA), the Fair Work Regulations and the applicable modern award (41% of labour hire workers employed) or enterprise agreement (59% of labour hire workers employed), specifically:

1. Pay; covering base rate of pay, penalty rates, overtime rates and allowances
2. Record keeping; covering internal records and pay slips

The bad news:

• Only 12 of the 63 employers (21%) were compliant in all areas of the audit
• 64% of employers were non-compliant in the payment of one or more of the following: base rate for ordinary hours; allowances; overtime and penalties. The inspectors noted that these errors mostly occurred due to the use of an incorrect or outdated award or agreement. A total of $563,850 was repaid to 1337 workers.
• 48% of employers were non-compliant with the record keeping or pay slip provisions of the FWA. The issues of non-compliance included; failure to keep overtime hours worked by the employee; incorrect name on the pay slip; pay slip not recording the pay period to which the pay slip applied and payment date of wages not recorded on the pay slip.
• The ABCC report concluded that “Record keeping within the labour hire sector was poor”

The (relative) good news:

Commissioner Stephen McBurney declined to name and shame the non-compliant agencies as “These employers provided that full rectification and full co-operation and that’s really what sets this apart from the other cases that I run”.

Charles Cameron, the chief executive of the RCSA (Australia & NZ), expressed concern at the findings and agreed labour hire firms should be beyond reproach when it came to simple award compliance.

“Awards can be very complex but the examples cited by the ABCC in this report are not examples of complex clauses and therefore we encourage construction firms to undertake more due diligence on which firms they work with,” he said.

I fully endorse Charles’s comments. I was, frankly, very disappointed that non-compliance was so high.

As a recruitment or on-hire specialist, each agency should be especially vigilant in ensuring that their pay and record keeping is, as Charles rightly says, beyond reproach.

It’s simply not good enough to be great at finding and matching employers and workers; that’s only part of the function of being a sector specialist. Following through with correct pay and accurate record keeping is just as important.

It’s a matter of trust.

I would hope trust with all customers is an important driver for agency owners and leaders.

If you can’t promise, and consistently deliver on, the highest standards in pay and records, then you can be sure your business’s reputation, and ultimately long term health, is declining.

I’m confident that such a low level of compliance, uncovered by the ABCC, among labour hire operators, won’t go unnoticed by the Fair Work Commission.

To all agencies with temp/contractor/labour hire workforces – be prepared for an audit.

I suspect the FWA will be far more likely to name and shame those who are caught transgressing, given the fair warning the ABCC has just provided to our whole industry.

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