In Australia,
labour hire
Labour hire is a form of employment in which an employer directs their de jure employees ('labour hire employees', or 'agency workers') to perform work at an external workplace, belonging to a client of the legal employer.
In a labour hire arrange ...
is referred to by the legal
term of art
Jargon is the specialized terminology associated with a particular field or area of activity. Jargon is normally employed in a particular communicative context and may not be well understood outside that context. The context is usually a particu ...
labour hire arrangement, and refers to the employment practice of an employer supplying its employees to another workplace, for profit.
Labour hire arrangements often overlap with, but are distinct from the practice of
temporary staffing. Labour hire arrangements are situations in which an employee has a legal employer, but no direct
employment contract
An employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibilities between parties to a bargain.
The contract is between an "employee" and an "employer". It has arisen out of the old ...
with their place of work.
Companies that provide labour hire are often referred to as 'recruitment agencies' however, labour hire arrangements do not involve an
agency relationship with an employee or the worksite in a legal sense. The labour hire company is paid for services provided to the worksite by the employee, they are not paid as an agent for the cost of recruitment per se.
The labour hire arrangement can be contrasted with other
recruitment business dealings, that involve a
finder's fee
''Finder's Fee'' is a 2001 American film directed by Jeff Probst from his original screenplay.
Plot
The film takes place over the course of a single evening. Tepper, played by Erik Palladino, finds a wallet on his way home from work. He contac ...
paid to an agency for helping a workplace obtain an employee.
Labour hire industry
Labour hire firms
As of January 2020, the total revenue of the labour hire industry in Australia is approximately $29 billion; according to industrial analysts.
The analyst firm
IBISWorld claims that there are 9,634 labour hire businesses and 362,800 labour hire employees in the industry.
The largest companies in the Australian labour hire industry are
Hays,
Persol Holdings
Persol Holdings (rebranded from Temp Holdings) is a Japanese human resource management company, that provides labour hire
Labour hire is a form of employment in which an employer directs their de jure employees ('labour hire employees', or 'ag ...
(which owns both
Programmed &
Skilled Group),
Recruit (trading as RGF Staffing),
WorkPac),
ManpowerGroup
ManpowerGroup (formerly known as Manpower Inc.) is a Fortune 500 American multinational corporation headquartered in Milwaukee, Wisconsin. Founded in 1948 by Elmer Winter and Aaron Scheinfeld, ManpowerGroup is the third-largest staffing firm in ...
,
Adecco
The Adecco Group, is a Swiss-French company based in Zurich, Switzerland, and is the world's second largest Human Resources provider and temporary staffing firm, and a Fortune Global 500 company.
They directly employ 700,000 people a day ...
, and
Randstad
The Randstad (; "Rim" or "Edge" City) is a roughly crescent-shaped conurbation in the central-western Netherlands, consisting primarily of the four largest Dutch cities (Amsterdam, Rotterdam, The Hague, and Utrecht); their suburbs, and many tow ...
.
Other notable labour hire firms include
Ingeus
Ingeus Limited is a British-based, Australian
provider of employment and health programmes, services for young people, training and skills support, Labour hire and probation services.
It is notable in part, for being founded by Thérèse Rein, t ...
(notable for being founded by
Thérèse Rein
Thérèse Virginia Rein (born 17 July 1958) is an Australian entrepreneur who is the founder of Ingeus, an international employment and business psychology services company.
Rein is the wife of Kevin Rudd, who was the Prime Minister of Austra ...
, the wife of former Prime Minister
Kevin Rudd
Kevin Michael Rudd (born 21 September 1957) is an Australian former politician and diplomat who served as the 26th prime minister of Australia from 2007 to 2010 and again from June 2013 to September 2013, holding office as the leader of the ...
), and
Serco
Serco Group plc is a British company with headquarters based in Hook, Hampshire, England. Serco primarily derives income as a contractor for the provision of government services, most prominently in the sectors of health, transport, justice, i ...
(notable for its labour hire procurement to government departments).
Industrial clients
Labour hire arrangements are used by many large companies in Australia in their workforce. A prominent example is the
Amazon
Amazon most often refers to:
* Amazons, a tribe of female warriors in Greek mythology
* Amazon rainforest, a rainforest covering most of the Amazon basin
* Amazon River, in South America
* Amazon (company), an American multinational technology c ...
MEL1 facility, located in
Dandenong South
Dandenong South is a suburb in Melbourne, Victoria, Australia, 31 km south-east of Melbourne's Central Business District, located within the City of Greater Dandenong local government area. Dandenong South recorded a population of 125 a ...
. It was reported by the
Sydney Morning Herald
''The Sydney Morning Herald'' (''SMH'') is a daily compact newspaper published in Sydney, New South Wales, Australia, and owned by Nine. Founded in 1831 as the ''Sydney Herald'', the ''Herald'' is the oldest continuously published newspaper i ...
that 100% of the non-managerial workforce at that facility is provided by
Adecco
The Adecco Group, is a Swiss-French company based in Zurich, Switzerland, and is the world's second largest Human Resources provider and temporary staffing firm, and a Fortune Global 500 company.
They directly employ 700,000 people a day ...
. Reportedly, Amazon's other facilities in Australia are operated on similar terms.
Labour hire is also used in great quantity by the
Commonwealth Government
The Australian Government, also known as the Commonwealth Government, is the national government of Australia, a federal parliamentary constitutional monarchy. Like other Westminster-style systems of government, the Australian Government ...
.
Legal issues
Legal responsibility
As the
de jure
In law and government, ''de jure'' ( ; , "by law") describes practices that are legally recognized, regardless of whether the practice exists in reality. In contrast, ("in fact") describes situations that exist in reality, even if not legally ...
employer, labour hire providers are legally responsible for ensuring compliance with Australian
Industrial law
Labour laws (also known as labor laws or employment laws) are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, ...
, including the
Fair work act
The ''Fair Work Act 2009'' (Cth) is an Act of the Parliament of Australia, passed by the Rudd Government to reform the industrial relations system of Australia. It replaced the Howard Government's WorkChoices legislation, it established Fai ...
.
Labour hire employees must be offered wages & conditions in compliance with the applicable
Industrial award.
Liability for injuries at client worksites
Labour hire companies have been found
legally liable for the injuries of their employees, on the tort ground of
Negligence
Negligence (Lat. ''negligentia'') is a failure to exercise appropriate and/or ethical ruled care expected to be exercised amongst specified circumstances. The area of tort law known as ''negligence'' involves harm caused by failing to act as a ...
. In the case
Drake Industrial v WorkCover Authority' the
common law
In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipresen ...
duty of care
In tort law, a duty of care is a legal obligation that is imposed on an individual, requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others. It is the first element that must be establis ...
owed by employers toward their employees, was affirmed to include circumstances in which that employee worked on a premises not controlled by the labour hire employer. The court noted that:
"An employer who sends its employees into another workplace over which they exercise limited control is ... under a particular positive obligation
to ensure that those premises, or the work done, do not present a threat to the health, safety or welfare of those employees."
Enterprise bargaining agreements
Enterprise bargaining agreement
Enterprise bargaining is an Australian term for a form of collective bargaining, in which wages and working conditions are negotiated at the level of the individual organisations, as distinct from sectoral collective bargaining across whole industr ...
s (EBAs) applicable to a
workplace
A workplace is a location where someone Work (human activity), works, for their employer or themselves, a place of employment. Such a place can range from a Small office/home office, home office to a large office building or factory. For Indust ...
do not legally cover labour hire employees and their employers, unless there is a clause written into the agreement expressing that to be the case. Instead, EBAs are formed between employees of the labour hire company, and the labour hire company itself. This can result in a pay difference between actual employees of a worksite, and those working there through labour hire; a aspect that has been criticized by the
Australian Labor Party
The Australian Labor Party (ALP), also simply known as Labor, is the major centre-left political party in Australia, one of two major parties in Australian politics, along with the centre-right Liberal Party of Australia. The party forms the f ...
.
Labour hire companies have been accused of using spurious legal tactics to undermine EBAs existing between employees and their existing workplaces; on behalf of clients. In 2016,
Carlton & United Breweries
Carlton & United Breweries (CUB) is an Australian brewing company based in Melbourne and owned by Japanese conglomerate Asahi Breweries. Its notable brands include Victoria Bitter, Carlton Draught, Foster's Lager, Great Northern, Resch's, Pu ...
(CUB) attempted to abolish an in-force EBA with its workforce, by paying the company
Programmed to become their legal employer. Programmed then attempted to force the workers onto an EBA that had been created years earlier, with different workers; with substantially lower wages. When some workers refused to sign-on to the new agreement,
Programmed attempted to replace them with labour hire. CUB and Programmed's actions resulted in a consumer
boycott
A boycott is an act of nonviolent, voluntary abstention from a product, person, organization, or country as an expression of protest. It is usually for moral, social, political, or environmental reasons. The purpose of a boycott is to inflict som ...
and
picketing campaign against the company that lasted six months. (see also:
Carlton & United Breweries dispute)
Regulation
De jure
In law and government, ''de jure'' ( ; , "by law") describes practices that are legally recognized, regardless of whether the practice exists in reality. In contrast, ("in fact") describes situations that exist in reality, even if not legally ...
employers in a labour hire arrangement are subject to the industrial laws that generally bind all employers.
This includes any applicable
Industrial awards, as well as additional laws specifically regulating the conduct of labour hire businesses. In
Victoria
Victoria most commonly refers to:
* Victoria (Australia), a state of the Commonwealth of Australia
* Victoria, British Columbia, provincial capital of British Columbia, Canada
* Victoria (mythology), Roman goddess of Victory
* Victoria, Seychelle ...
and
Queensland
)
, nickname = Sunshine State
, image_map = Queensland in Australia.svg
, map_caption = Location of Queensland in Australia
, subdivision_type = Country
, subdivision_name = Australia
, established_title = Before federation
, established_ ...
, labour hire businesses must obtain a license to operate from the
State government
A state government is the government that controls a subdivision of a country in a federal form of government, which shares political power with the federal or national government. A state government may have some level of political autonomy, or ...
.
Terminology
While labour hire is the term used in
Australia
Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
and
Namibia
Namibia (, ), officially the Republic of Namibia, is a country in Southern Africa. Its western border is the Atlantic Ocean. It shares land borders with Zambia and Angola to the north, Botswana to the east and South Africa to the south and ea ...
, the concept has varying terminology depending on
jurisdiction
Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels.
Jur ...
. Practices analogous to labour hire in Australia have been referred to as Labor Contracting (
USA
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
), and
Labour brokering Labour brokering is a South African term for a form outsourcing practiced (and formerly practiced in Namibia, where it was known as labour hire) in which companies contract labour brokers to provide them with casual labour. Labour brokers are dif ...
(
South Africa
South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...
), among other names.
Likewise, labour hire providers are referred to by differing names depending on country. Some terms include
Employment agency
An employment agency is an organization which matches employers to employees. In developed countries, there are multiple private businesses which act as employment agencies and a publicly-funded employment agency.
Public employment agencies
One ...
(UK),
professional employer organization (USA), among others.
See also
*
Labour hire
Labour hire is a form of employment in which an employer directs their de jure employees ('labour hire employees', or 'agency workers') to perform work at an external workplace, belonging to a client of the legal employer.
In a labour hire arrange ...
*
Employment agency
An employment agency is an organization which matches employers to employees. In developed countries, there are multiple private businesses which act as employment agencies and a publicly-funded employment agency.
Public employment agencies
One ...
*
Temporary work
Temporary work or temporary employment (also called gigs) refers to an employment situation where the working arrangement is limited to a certain period of time based on the needs of the employing organization. Temporary employees are sometimes ...
By country
*
Labour brokering (Southern Africa)
*
Labour hire in Namibia In Namibia, the issue of labour hire remains a controversy between the government, unions and labour brokering companies. The ILO categorizes two forms of subcontracting, namely job contracting (where a subcontractor supplies goods or services) and ...
References
{{Labour Hire
Australian labour law
Recruitment