Observation (CEACR) - adopted 2012, published 102nd ILC session (2013)

Labour Inspection Convention, 1947 (No. 81) - Australia (Ratification: 1975)

The Committee notes the comments made by the Government in its report received on 7 September 2012 by the Office in reply to the communications of the Australian Council of Trade Unions (ACTU), dated 31 August and 25 October 2010. The Committee further notes the latest communication by the ACTU, dated 31 August 2012, concerning the application of the Convention in law and in practice, transmitted to the Government on 14 September 2012.

Article 3(1) and (2) of the Convention. Functions of the system of labour inspection. Contracting and precarious work. The Committee notes the concerns raised by the ACTU regarding the extent of “sham contracting”, and the growth in precarious forms of work, in Australian workplaces. According to the ACTU, just under 40 per cent of all workers in Australia are in “non-standard” work arrangements, including casual, short-term, contracting and labour hire arrangements. The ACTU refers to a recent independent inquiry commissioned by them to examine the extent of insecure work and its impact. The inquiry recommended that the Federal Government increase the resources allocated to the Fair Work Ombudsman (FWO) to improve enforcement and compliance, with a focus on developing new approaches to protect insecure workers.

Investigation into workers and trade unions. The ACTU raises further concerns over the extent to which the FWO expends its time, effort and resources investigating whether workers and trade unions have breached workplace laws, and most notably whether they have taken industrial action contrary to the restrictive provisions regulating this activity in the Fair Work Act 2009 (the FW Act). The ACTU indicates that this activity risks distracting the FWO from its core and critical task of assisting vulnerable workers in enforcing their rights.

Building and construction industry. The Committee takes note of the response provided by the Government with regard to its previous comment and the 2010 communications by the ACTU. The Committee notes in particular that the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Act 2012 has been adopted, and that it abolishes the Office of the Australian Building and Construction Commissioner (ABCC), and replaces it with the Fair Work Building Industry Inspectorate, known as Fair Work Building and Construction (FWBC). The FWBC and the Fair Work (Building Industry) Act 2012 commenced operations on 1 June 2012. The Government indicates that the long-standing practice of referring wages and entitlements claims, including the underpayment of employees, to the FWO has been terminated, with the aim of turning the ABCC, and now the FWBC, into a full service regulator. The FWBC retains, however, the power to compulsorily obtain information and/or documents. The Government indicates that the retention of these powers is balanced by the introduction of significant new safeguards, including a sunset provision three years after they come into effect. The Committee notes that the ACTU, in its 2012 communication, again raises concerns in relation to these coercive powers for use in the investigation of industrial issues. The ACTU alleges that early indications show that the investigation and prosecution of workers and their organizations remain a key aspect of the FWBC’s work. The ACTU believes this continued focus on enforcing laws against workers and trade unions is inconsistent with the primary duties of inspectors as specified in Article 3 of the Convention.

The Committee invites the Government to respond to the concerns raised by the ACTU, and in particular concerning measures taken to address the increase in the use of “sham contracting” and precarious work, and regarding the use of the FWO’s time and resources to investigate workers and their organizations, including in the building and construction industry.

Article 4. Labour inspection under the supervision and control of a central authority. In response to the concerns raised by the ACTU in 2010, the Government indicates that it considers an independent body to oversee labour inspection in the building and construction industry would give best effect to the Wilcox report’s recommendation that the FWBC have “operational autonomy”, and that it is both appropriate and necessary to retain industry-specific regulation within a separate body while genuine cultural reform continues in the building and construction industry. The Committee notes that the ACTU’s most recent communication again raises concerns in relation to the creation of this second federal labour inspectorate, in particular given that the model adopted by the Government was specifically rejected by the Wilcox inquiry. The ACTU alleges that separate inspectorates inevitably lead to differing standards applying to workers within different sectors. The Committee invites the Government to respond to the concerns raised by the ACTU in relation to the risks associated with having separate inspectorates.

Article 5(b). Collaboration between officials of the labour inspectorate and employers and workers or their organizations. The Committee takes note of the response by the Government to its previous comment and the communication by the ACTU dated 31 August 2010, concerning collaboration between the FWO and employers’ and workers’ organizations. The Government indicates that an example of such collaboration was the AU$2.5 million Shared Industry Assistance Project (SIAP), designed to help specific industries transition to Modern Awards. In partnership with 15 employer and employee organizations, the FWO developed resources, including interpretive guides and tables, industry-specific helplines, fact sheets and handbooks. The Committee notes that the ACTU has again remarked on how the operation of the restrictions in the FW Act in relation to the right of access by unions to workplaces for compliance purposes is significantly limiting the capacity of unions to perform their monitoring and compliance activities. While the ACTU welcomes the introduction of new laws in 2012, which amend the current right of entry provisions to address sweatshop conditions for outworkers in the textile, clothing and footwear industry, it calls on the Government to amend the FW Act so as to permit agreements to improve on the statutory right of entry, and to ensure trade unions can enter premises where their members have been employed. The Committee invites the Government to respond to the concerns raised by the ACTU in relation to right of access by unions to workplaces for compliance purposes, and to continue to provide information on the collaboration between officials of the labour inspectorate and employers and workers or their organizations.

Article 18. Adequate penalties. The Committee notes the most recent communication by the ACTU, which indicates high levels of non-compliance of workplace instruments by employers, especially in smaller enterprises. In this regard, the ACTU calls on the Government to consider increasing fines for underpayment or non-compliance so as to increase deterrence. The Committee asks the Government to respond to the comments by the ACTU concerning the adequacy of penalties for non-compliance of workplace instruments by employers.

The Committee is raising other points in a request addressed directly to the Government.