After five and a half years of holding government departments and agencies accountable, and doing our own research, we continue to pursue Australia’s largest case of wage theft. More than one BILLION dollars of underpayments involving as many as 5,000 workers. Our research has led to miners submitting complaints to the Fair Work Ombudsman (FWO). For example, a miner has been underpaid $211,000 and some miners have had at least $41,000 stolen per year of employment.
In this session with the Fair Work Commission (FWC), I asked Mr Furlong, General Manager of FWC, how many applications for regulated Labour Hire Agreements were currently under the Commission’s consideration. He stated that 55 applications had been submitted, with 11 Orders made—9 in the mining industry and 2 in the meat processing industry.
I then asked a series of questions about the relationships between Awards, Regulated Labour Hire Agreements, and Enterprise Agreements. Mr Furlong confirmed that, under the Labor government’s recent legislation, it’s standard for casual workers performing the same job as full-time workers under a Regulated Labour Hire Agreement to receive an additional 25% in pay as compensation for entitlements they do not receive. Mr Furlong agreed to look into which Awards would have applied in the absence of Labour Hire Agreement Orders and provide that information on notice.
I’ve raised this issue at every senate estimates hearing since late 2019 and finally the Fair Work Commission and Minister seem to be taking this issue seriously. Until recently, bureaucrats and Ministers have been in denial of what has been happening right under their noses and that raises questions of integrity.
Australia’s largest wage theft case has been possible only with the participation of the relevant union bosses in the CFMEU/MEU, labour-hire firms, mine owners and the FWC’s approval.
Transcript
Senator ROBERTS: I’m interested in exploring the nature of labour hire arrangements and their relationship with associated awards, and also partly the CFMEU administrator. What’s the total number of labour hire arrangements currently before the commission to date?
Mr Furlong: I might start here and then ask Ms Scarlett to assist. My understanding is that to 30 September we’ve received 55 applications for regulated labour hire authorisation orders. And of that—
Senator ROBERTS: What do you mean by ‘regulated’?
Mr Furlong: Of that number?
Senator ROBERTS: No, what does the term ‘regulated’ refer to?
Mr Furlong: That’s the term—
Senator ROBERTS: ‘Come before you guys’?
Mr Furlong: given under the loopholes mark 1 changes. In terms of the number of orders that have been made, there are 11. Nine of them, I understand, are in the mining industry and two are in the meat-processing industry. Ms Scarlett, is there anything you’d like to add?
Senator ROBERTS: That number was how many?
Ms Scarlett: It was 55. As Mr Furlong has said, 11 labour hire arrangement orders have been issued since the commencement of the provisions.
Senator ROBERTS: What sorts of orders?
Ms Scarlett: Regulated labour hire arrangement orders. Of the 55 applications, 11 orders have been made, a number of applications have been withdrawn and the remaining matters remain before the commission.
Senator ROBERTS: What’s the breakdown of these labour hire arrangement orders for each award that would otherwise have covered the employees? You might have to take that on notice.
Ms Scarlett: Yes. I’m not sure that we can go to the award. The regulated labour hire arrangement orders apply where there is a covered employment instrument such as an enterprise agreement in place. So it’s not necessarily an assessment of the award which applies, rather whether an enterprise agreement is in place that would cover the work of the labour hire employees if they were working in the business.
Senator ROBERTS: The enterprise agreement would be in an industry or work site that is covered by an award, but the enterprise agreement supersedes the award; is that right?
Ms Scarlett: That’s correct.
Senator ROBERTS: So would there be any such sites that only have an enterprise agreement and no back-up award?
Ms Scarlett: I don’t believe there would be, but I’d need to take that on notice.
Senator ROBERTS: If you could, please do. I’d like to know the connection to the award, or to the award that would be in place if the enterprise agreement wasn’t there?
Ms Scarlett: I understand.
Senator ROBERTS: Can you advice whether there would be a general expectation that anyone working as a casual should or would receive 25 per cent more than a full-time employee doing similar or the same work?
Ms Scarlett: The regulated labour hire arrangement order provisions provide for a 25 per cent casual loading for regulated labour hire employees.
Senator ROBERTS: Casuals.
Ms Scarlett: Casuals.
Senator ROBERTS: Can you advice if there is specific legislation, regulation or policy that requires that a casual employee should or would receive 25 per cent more than a full-time employee doing similar or the same work? I know that it’s a community expectation and it’s a right almost, but is it enshrined in law, statute or policy?
Ms Scarlett: I’m not aware of a specific provision in legislation that requires a 25 per cent loading.
Senator ROBERTS: Are you able to check that?
Ms Scarlett: Yes.
Senator ROBERTS: You’ll take on notice to check it? It is fairly normal that awards require casual employees to receive 25 per cent more than a full-time employee doing similar or the same work? Can you point to any award that does not require a casual employee to be paid 25 per cent more than a full-time employee doing similar or the same work?
Mr Furlong: I can’t point to an award, but I’ll happily take it on notice. There are 155 modern awards, Senator.
Senator ROBERTS: Yes, so I’d like to know if that’s normal.
Mr Furlong: Can I clarify the question so we make sure that we provide you with the information that you require?
Senator ROBERTS: Yes, sure. Is it fairly normal that awards require casual employees to receive 25 per cent more than a full-time employee doing similar or the same work? That’s the first part.
Mr Furlong: Yes.
Senator ROBERTS: The second part is: can you point to any award that does not require a casual employee to be paid 25 per cent more than a full-time employee doing similar or the same work?
Mr Furlong: We’ll take it on notice.
Senator ROBERTS: Thank you, Mr Furlong. In applying the better off overall test, the BOOT, to enterprise agreement applications, would it be the normal expectation of the Fair Work Commission, having regard to pay rates of casual workers, that casual employees should or would receive 25 per cent more than a full-time employee doing similar or the same work?
Mr Furlong: I will ask Mr Corcoran to assist you, Senator.
Mr Corcoran: Each application is considered on its own merits by the member. They take into account the circumstances in their entirety. It’s not a line-by-line assessment that the member will make; the better off overall test is a global assessment.
Senator ROBERTS: A global assessment. If an award did not allow for casual employment, would this create the circumstance in which casual employees working under enterprise agreements subject to the set award would be paid less than full-time employees and/or be paid a rate that would be less than that of a full-time employee plus 25 per cent?
Mr Corcoran: A casual employee wouldn’t be paid less than a full-time employee, I wouldn’t have thought, in normal circumstances.
Senator ROBERTS: A casual employee would be paid less than a full-time—
Mr Corcoran: I thought they would not have been paid less.
Senator ROBERTS: Sorry. And they’d be paid full time plus 25 per cent?
Mr Furlong: With some of these questions, I return to the correspondence I provided you on 11 January this year regarding information published on your website but also relating to the better off overall test and the Chandler Macleod Northern District of NSW Black Coal Mining Agreement 2015. I’m not too sure if you still have access to that correspondence.
Senator ROBERTS: I do. It’s sitting on my desk—with an intent to reply.
Mr Furlong: This series of questions has been covered in that correspondence. I’m happy to table it, if that would assist.
Senator ROBERTS: No, that’s fine; I know exactly where it is on my desk. Can you envisage a circumstance in which, if a union objected to an enterprise agreement because the pay rate of casuals would be less than that of a full-time employee plus 25 per cent, the Fair Work Commission would ignore the objections of the union and endorse the agreement despite the union’s objections?
Mr Furlong: As we’ve discussed several times, the better off overall test, as Mr Corcoran said, is a global assessment to ensure the employees are better off overall. It is always determined by a member of the commission. Members, as you’re aware, are independent statutory office holders who are required to ensure that, in their decisions, they are satisfying the obligation, functions and prescribed content of the enterprise agreements before they can be satisfied and then ultimately approve the decision to make the agreement operational. If a party to that agreement or someone who has a valid interest in that agreement is unsatisfied, is concerned with that agreement application, they can seek to have the agreement overturned through the mechanism of an appeal; that is their right. The other thing I’d like to add here—
Senator ROBERTS: Just on the answer to that question: would the commission ignore the objections in assessing the enterprise agreement? Would the commission ignore the objections of the union as part of that? I’m not talking about passing it and then objecting to it; I’m talking about objecting as they’re processing it.
Mr Furlong: Prior to the application being made?
Senator ROBERTS: Yes.
Mr Furlong: It would be the subject of deliberation of a member before the tribunal.
Senator ROBERTS: It’d be pretty unlikely, though, wouldn’t it?
Mr Furlong: I can’t speak on behalf of our members and their independent decision-making.
Senator ROBERTS: Have you ever seen a member overturn a union objection?
Mr Furlong: As we’ve discussed, my role is to provide administrative support to the president of the commission to ensure—
Senator ROBERTS: It’d be pretty unlikely, wouldn’t it?
Mr Furlong: I can’t answer that.
Senator ROBERTS: Alright. I cut you off there.
Mr Furlong: I was just going to say that if an agreement has reached or passed its normal expiry date, then a party to that agreement can seek to have the agreement unilaterally terminated. They will then fall back to the underpinning award—or they can have the right to negotiate a new enterprise agreement.
Senator ROBERTS: Thank you for the extra detail; it goes outside what I’m looking for. In the process of getting approval for an enterprise agreement from the Fair Work Commission, if a union objected to an enterprise agreement because the pay rate of casuals would be less than that of a full-time employee plus 25 per cent, the Fair Work Commission would hardly ignore the objections of the union and endorse the agreement despite the union’s objections.
Mr Furlong: It’s a case-by-case basis, on the information provided to the members in the consideration of whether or not—
Senator ROBERTS: What would be the likelihood? Have you heard of any?
Mr Furlong: As I said, it’s not my role to comment on cases determined by members of the commission. It’s my responsibility to provide the president with administrative support, as the general manager, to ensure the commission can operate effectively.
Senator ROBERTS: I’m not asking you for your opinion.
Mr Furlong: I can’t comment on cases that come before the commission.
Senator ROBERTS: I’m not asking you to. I’m not asking for your opinion on the member making the decision. I’m asking: would it happen, and has it happened?
Mr Furlong: I don’t have any oversight of particular cases that move through the tribunal side of the commission.
Senator ROBERTS: Would anyone else care to comment? It seems to me to be almost impossible; I won’t say it is impossible!
Mr Corcoran: I would say a member would always consider the views of the parties, but ultimately the member must be satisfied that the requirements of the act have been met.
Senator ROBERTS: Thank you. I have some questions for the minister; I think most of them will be pretty simple, Minister. I table this letter from the Independent Workers Union of Australia; it’s the letter that was sent to the CFMEU administrator, copied to you, me and Senator Cash. I think these questions will be fairly simple, given your background, Minister. Why is the CFMEU administrator not here at Senate estimates?
Senator Watt: They’re not a public official. I think pretty much every person who attends estimates is either a minister or a public servant. The administrator is not a public servant. There are probably other reasons but that would be one of them.
Senator ROBERTS: Who pays his salary?
Senator Watt: He’s being paid by the CFMEU in the same way that officials of the union have traditionally been paid.
Senator ROBERTS: That explains that. What responsibilities does the CFMEU administrator have with or to the Fair Work Commission? I imagine he’d have to deal with them a fair bit.
Senator Watt: Mr Furlong might be better placed.
Mr Furlong: Under the registered organisations act, I am the regulator of registered organisations.
Senator ROBERTS: So you’re overseeing it?
Mr Furlong: I oversee all the registered organisations, employer and employee alike.
Senator ROBERTS: Could the CFMEU administrator authorise payment of the underpaid miners from the CFMEU mining division using CFMEU funds?
Mr Furlong: I can’t speak on behalf of the administrator. I don’t think you were here for this section of my evidence: the administrator operates independent of government. He will make decisions on behalf of the union as he sees fit.
Senator ROBERTS: Can he investigate wage theft from casual miners in Central Queensland and the Hunter Valley?
Mr Furlong: In representing the interests of his members, he can look into the underpayments. It’s a core function of trade unions to do that.
Senator Watt: Noting that the administrator is the administrator of the Construction and General Division of the CFMEU. To use the colloquial, his members are members of the Construction and General Division of the CFMEU, not, for example, members of the maritime division and certainly not people who are now members of the Mining and Energy Union. His only responsibility is for the Construction and General Division, and its members.
Senator ROBERTS: The government said it needed the parliament to create the CFMEU administrator to deal with alleged CFMEU illegality and criminality, didn’t it—amongst other things?
Senator Watt: I might look back at what we said. We had a debate this morning about it. It’s not possible for me to go into the intention of the administration because of the High Court litigation. I’m sure you can look back at what was said in the second reading speech.
Senator ROBERTS: That was my impression, so correct me if I’m wrong. Now, management of this is not subject to parliamentary scrutiny. You said it would be a matter of immense public importance.
Senator Watt: I think there has been a lot of public interest in this issue.
Senator ROBERTS: Yes—so wouldn’t it be better to have him subject to parliamentary scrutiny and Senate estimates?
Senator Watt: I’m looking around at our lawyers. I might get Ms Godden, the departmental chief counsel, back up, if that’s okay. I know departmental people don’t normally appear at the table for this. Senator Roberts, I don’t know if you were here this morning but we had a discussion about issues that we could answer questions on and issues that we couldn’t because they might involve the High Court case. I don’t want to say anything which will interfere with that, and I know you don’t want me to either. Could you ask the question again, so I can get some advice on whether I can answer that.
Senator ROBERTS: My understanding is the government said it needed parliament to create the CFMEU administrator to deal with the alleged CFMEU illegality and criminality. Now the oversight of the CFMEU administrator is not subject to parliamentary scrutiny, and yet it was said to be a matter of immense public importance.
Senator Watt: I have no doubt it’s a matter of great public interest. I was saying before to Senator Payman that either the legislation or the scheme of administration requires the administrator to provide a report to me every six months, which I’m required to table in the parliament, so there is a form of parliamentary accountability through that. That was considered to be the appropriate amount of reporting for a role that is completely independent of government.
CHAIR: Senator Roberts, I know you’ve been very patient during the day, but this is—
Senator ROBERTS: Given a report in the media on 12 April this year—I mentioned this in a speech in the Senate, but there was no answer to it—is the real reason for the CFMEU being placed in administration to stop John Setka taking over Labor in Victoria, as he reported? And why wouldn’t constituents be suspicious of the arrangement?
Senator Watt: As I said in response to an earlier question, I’d really like to be able to answer that question but it’s probably not wise that I do given the High Court litigation.
Senator ROBERTS: Thank you, Chair.
Senator Watt: But I’m told you might want to have a look at paragraph 11 of the revised explanatory memorandum, which provides some reasoning for the legislation.
Senator ROBERTS: Thank you.
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