As indirect employment rises, working conditions are eroded

The erosion of secure working conditions in Australia and around the world takes many forms, not all of which receive equal levels of attention or recognition. Some of the most overt and obvious challenges to secure work, such as casualization, have grown alongside other less widely recognised challenges to secure and stable work, such as the rise of outsourcing and the use of labour hire.

Outsourcing labour, or contracting external companies to perform roles which were or could feasibly be provided internally, has become increasingly common as employers look for cost savings. While this practice is often deemed a cost saving, it creates a situation where staff undertake work at third party locations alongside workers with different employers. In instances where those contracts are further subcontracted out, this adds further layers of complexity and unclear lines of responsibility and accountability. Those workers are frequently employed in casual or contract-dependent roles, lacking conditions such as access to leave, with the additional insecurity making them more vulnerable to exploitation.

Where multiple employers and contractors are at play, there is much more complexity in lines of communication, responsibility, and levels of training. This means that the kind of coordination and centralised oversight required to ensure best practice health and safety procedures are in place, and that any breaches are reported and remedied effectively, are much more difficult to establish, let alone to maintain.

This complexity is consistently implicated in significant safety breaches, including in the hotel quarantine COVID outbreak in Victoria during 2020, where there was a clear link between a subcontracted security workforce, unclear training and accountability around healthcare protocols, low wages being paid to workers, and those workers holding other jobs to get by.

Likewise, the inquiry into the 2020 COVID-19 outbreak in North-West Tasmania found that found that “high levels of staff mobility between different healthcare facilities” and “the necessity to earn income” was a driver of infections, “because many health care workers are not employed by the DoH in a full-time capacity and accordingly work across two or more healthcare facilities to enable them to earn sufficient income to meet their commitments.” Similar complexities arise from the use of labour hire firms in industries such as meat processing and logistics: both sectors whose work has been deemed “essential” throughout the pandemic, and both sectors where workplace transmission became a significant threat to workers’ safety throughout the past two years.

Outsourcing and erosion of conditions have been has been particularly the case in the public service, where successive governments have actively avoided investing in nurturing the kind of specialist in-house expertise which is crucial to conducting public service work effectively. Rather, the Morrison Government like successive governments before it prefers to contract out to the corporate sector, at great financial and personal cost to taxpayers.

This means that when the contract is completed, the expertise and training undertaken by the contracted workers goes with them, making the expenditure a false economy which trains up and invests in private sector workers at great expense, all while public sector workers’ wages are frozen and told there are no resources available to pay for their expertise.

As the latest report of the Senate Select Committee on Job Security noted, labour hire agencies charge higher rates to government for the purported benefit of making workers “cheaper and easier to hire and fire”. Through doing so, they note, “labour hire companies and outsourced service providers have been allowed to pillage the public purse through excessive profit margins, meaning not only is the Australian public receiving a degraded quality of service, they are also paying more for it.”

This indictment has not led to significant response from the Morrison Government, however, who have instead continued to pursue practices of propping up corporate consultancies at the expense of the under-resourced public sector.

At COP26 in Glasgow last week, the Morrison Government demonstrated its allegiance to private profit over public good once again, by presenting Australia’s net zero modelling based on work contracted to the corporate consultants McKinsey. Rather than utilising the expertise of the CSIRO who also applied for the tender, the Morrison Government chose a company which advises many of the world’s largest polluting companies. The ensuing modelling, clearly marked by these partisan interests over any good faith commitment to science, has rightly been derided as insufficient. Had the decision been made to invest in scientific expertise, the results of that conference and the quality of that modelling might have been very different.

Far from receiving hazard pay in recognition of this frontline essential role, however, these workers have faced additional cuts to their pay and conditions, undermining of their job security, and Indirect employment ultimately fragments the systems of oversight, accountability and care which are crucial to ensuring that workplaces are safe and that workers can access fair conditions. It relies on an absence of transparency and a built-in commitment to inequitable conditions as a means of pursuing profit for the few.

Yet despite being a normalised and pervasive aspect of the economy, coordinated worker actions such as those taking place in the logistics industry and in aviation have successfully placed pressure on employers to reduce their reliance on these unfair practices. This indicates that there may be opportunity to build further resistance and rebuild the foundations of equitable working conditions across the economy.