Major employer groups are divided over contentious workplace relations reforms after federal minister Tony Burke negotiated amendments to exclude service contractors.
Major employer groups are divided over the federal government’s contentious workplace relations reforms after minister Tony Burke negotiated amendments to exclude so-called service contractors.
The Australian Resources and Energy Employer Association, which in the past has been a strong critic of the reforms, has come out in support of the proposed changes.
“This is the guarantee AREEA has fought long and hard for on behalf of the Australian resources and energy industry,” chief executive Steve Knott said.
"AREEA’s century-long expertise in industrial relations was pivotal in consultations with government as we brought forward a compelling case to carve out specialist service contractors from the proposed labour hire legislative reforms."
Other groups including the Minerals Council of Australia and Business Council have criticised the proposed changes, even though neither has seen the details.
Mr Burke seized on this aspect when he rounded on the Minerals Council and BHP in an ABC radio interview this morning.
“The Minerals Council will never be on side with this legislation for the very simple reason that one of their key members – BHP – uses the labour hire loophole in a very significant way,” he said.
“So they will be funded to run a campaign and they will run a campaign.
“And, you know, the quotes from the Minerals Council today, when you have a look at them, they haven’t seen the amendments but they know they oppose them.”
Minerals Council chief executive Tania Constable said the reported amendments to the Closing Loopholes Bill appeared to fall desperately short of a workable solution.
“Any amendment that does not include a complete removal of service contractors from being exposed to 'same job same pay', and a proper definition of 'labour hire' would merely be tinkering at the edges, and an attempt to hoodwink the parliament and the public,” she said.
She also implicitly criticised the AREEA when she said the minister’s modus operandi was to “find a soft target, get them to support your amendments sight unseen and then portray the problem as solved”.
“No-one should be fooled by such tactics,” Ms Constable said.
In a similar vein, Business Council chief executive Bran Black accused the government of offering secret deals.
“We haven’t seen any detail, but on face value it appears the government has now agreed to do something it had already committed to doing,” Mr Black said.
“The Bill was flawed before the government first committed to excluding service contractors from its labour hire changes, and it remains flawed now.”
Mr Burke acknowledged the government always wanted service contractors excluded from the legislation.
Its original plan was to give the Fair Work Commission discretion to exclude service contractors, but this relied on a points test that employers said was complex and unclear.
“The new wording will just have a straight exclusion that if it is a service other than the provision of labour, then they are excluded,” Mr Burke said.
“And that just gives a really clear line drawn that if it’s labour hire it’s covered; if it’s service contractors, it’s not.”
Mr Burke said service contractors covered organisations that provided machinery, their own systems, their own management, and included mining contractors along with catering and cleaning contractors.
This would include the likes of Sodexo, Compass Group and Downer subsidiary Spotless.
The criteria for service contractors is expected to include matters such as supervision, control, provision of equipment and whether the work is of a specialist or expert nature.
By contrast, Mr Burke said labour hire companies just provided workers.
The aim of the legislation is to crack down on employers that have one set of conditions for staff on enterprise agreements and lesser conditions for workers who do the same tasks but are employed via a labour hire company or a separate entity within the corporate group.
BHP has claimed the changes would add more than $1.3 billion a year to its costs.
Mr Knott said the agreed amendments were critical to the resource sector’s future.
“The industry cannot operate without contract mining and petroleum production services, maintenance service contractors, shutdown service providers, facilities management providers and other specialist service providers – none of which are loopholes to circumvent client enterprise agreement rates,” he said.
Mr Knott added that tight criteria would direct the FWC to focus only on factual matters of supervision, control, provision of equipment, statutory obligations and whether the work is of a specialist or expert nature.
“Legal review has confirmed the negotiated amendments would significantly strengthen the service contractor exemption and ensure only businesses providing labour hire to clients could be captured by future orders,” he said.
The latest dispute over the IR reforms comes after an earlier deal with Australian Hotels Association on the treatment of casual employees.
While the AHA welcomed those changes, other business groups remained critical.
