Developing strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
Professor Michael Quinlan School of Industrial Relations and Organisational Behaviour Industrial Relations Research Centre University of New South Wales, Sydney
Research project commissioned by WorkCover New South Wales
4 September 2002
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Acknowledgements A number of WorkCover NSW officers provided crucial support to the project including CEO Kate McKenzie, Michelle Patterson, Rick Kolan, Neale Spencer, Judith Allen, George Kuti, Darren McDonald, Clare Nolan, Ermil Sipp and Indira de Silva. In the course of collecting information for this project we interviewed well over 100 people from all over Australia as well as speaking to a number of persons overseas. In addition to this, with the support of WorkCover NSW, I was able to speak to almost every Industrial Reference Group, obtaining a range of insights from employer and union representatives across a range of industries. Denise Adams, Leigh Banks, Stan Coulter, Maureen Craig, Clare Gallagher, David Imber, Marie Manion, Kelly Miller, Robert Pearce, Maureen Strauss, Julie Russell, Rob Seljak, Kim Tolotta, Nikki Wight and a number of other executive, policy and administrative staff assisted with the visits to OHS agencies in other jurisdictions, arranging meetings, meals and other essential supports. Senior managers, policy and operational staff from the various agencies gave willingly of their time. For example, David Kimber followed up a number of demanding requests. John Crittal was his usual helpful and effervescent self. Timothy Walker, Director General of the UK Health and Safety Executive provided valuable information during an all too fleeting meeting in Perth and I have benefited from discussions with Mel Draper and Peter Graham (also of the HSE). I am very grateful to Ken McCall, Richard Coleman, Tony Cooke, Pat Gilroy, Maryann Hazard, Peter Moylan, David Shaw, John Short, Deb Vallance and other representatives of individual employers and unions as well as industry associations and union peak councils who assisted the project by arranging interviews or providing material. Virginia Whalen, Wendy Thompson, NSW Industrial Relations Commissioner Donna McKenna and Michael Tooma kindly provided legal material and prosecutions relevant to the project. Igor Nossar provided material relating to clothing outworkers. Barry Durham, formerly with WorkCover Victoria, Kathleen Rest, Acting Director National Institute for Occupational Safety and Health (NIOSH) in the USA and Pascal Paoli Senior Research Director at the European Foundation for the Improvement of Living and Working Conditions in Dublin lent their support to our grant application. Gunnar Aronsson, Michael Belzer, Joan Benach, Stephanie Bernstein, Richard Butler, Alan Clayton, Stephen Dhondt, Tom Dwyer, Joan Eakin, Kaj Frick, Sandra Glasbeek, Ove Gustafsson, Per Langaa Jensen, Kirsten Jorgenson, Felicity Lamm, David, Lampert, Dana Loomis, Bo Netterstrom, Theo Nichols, Per Oystein Saksvik, Kaija Leena Saarela, Vilma Santanna, Malte Segerdahl, Harry Shannon, Terry Sullivan, Annie Thebaud-Mony, Allan Toomingas, Peter Tergeist, Eric Tucker, Michel Vizena, Laurent Vogel, Leah Vosko, Asbjorn Wahl, David Walters, Ton Wilthagen and a number of other colleagues in Europe, north and south America all provided material and ideas over recent years that has found its way into this report. Thanks to Marcy Facey (University of Toronto) for alerting me to a study of nonreporting. Closer to home, I would like to acknowledge the help of a number of colleagues such as Allan Clayton, Rob Guthrie, Tony LaMontagne, Andrew Hopkins and Elsa Underhill. Almost without exception those approached to assist with this project did so willingly even at very short notice. A special note of thanks must go to Dr Claire Mayhew. Claire gently pushed me into applying for this project with her and did a lot of the detailed work on the application. It was originally intended as a joint project. Unfortunately, major commitments in relation to the OHS Violence Taskforce of the NSW Department Health prevented her from taking further part in the project but her contribution was still invaluable. 2
Finally, I would like to especially thank two scholars of international standing who kindly agreed to review a draft of this report and provide expert comments, namely Professor Katherine Lippel and Professor Richard Johnstone. Professor Lippel, Département des sciences juridiques, University of Quebec at Montréal, Québec, Canada is an international expert on workers compensation, who is currently undertaking research on changing employment arrangements in Canada and, with two colleagues, prepared a report on women and home-based work in Canada. Professor Johnstone is an international expert on OHS prevention law and the acknowledged authority on OHS law in Australia. He is head of the National Research Centre for Occupational Health and Safety Regulation, Regulatory Institutions Network, Research School of Social Sciences, Australian National University and also holds a post in the Socio-Legal Research Centre, Faculty of Law, Griffith University. Both provided me with extremely valuable comments within a stringent timeframe.
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Table of Contents Acknowlegdements
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Table of contents
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List of Tables
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Abbreviations used
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Glossary of Key Terms Used
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Table of Cases
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Executive Summary
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Introduction
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Part 1: The Nature and Extent of the Problem
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Chapter 1: An Overview of Changing Employment Relationships
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1.1 Introduction: Conceptual issues 36 1.2 Evidence on changing employment relationships in Australia and other countries 42 1.3 Changing Work Arrangements at Industry/Sector Level in Australia 48 Chapter 2: Evidence on the Occupational Health and Safety Effects of Changing Employment Relationships 2.1 Introduction: A review of existing research 2.2 Gaps in existing research 2.3 Methodological difficulties 2.4 Other evidence on the OHS and workers’ compensation effects of contingent work 2.5 Putting the debate into context 2.6 Conclusion and policy implications of this evidence Chapter 3: Why do these work arrangements undermine safety? 3.1 Introduction 3.2 Economic/demand pressures and reward systems 3.3 Disorganisation and lack of control 3.4 Regulatory Failure 3.5 Further evidence on these risk factors collected in the course of this project 3.6 Conclusion Chapter 4: The current regulatory framework and changing employment Relationships - Prevention 4.1 Introduction 4.2 Principle Legislative Requirements and Provisions
50 50 54 61 64 81 83 86 86 87 88 93 95 97
98 98 98 4
4.2.1 The effect on general duty provisions 4.2.2 The effect on guidance material, codes of practice and regulations 4.2.3 The effect on participatory mechanisms 4.2.4 Workplace inspection, incident reporting and other administrative effects 4.3 Issues in Relation to Particular Work Arrangements 4.3.1 Outsourcing/subcontracting 4.3.2 Home-based work, telework and telecall centres 4.3.3 Labour hire/labour leasing 4.3.3.1 Hold Harmless Contracts 4.3.4 Casual, temporary and itinerant/transient workers 4.3.5 Part-time work and multiple jobholding 4.3.6 Downsizing/restructuring and job insecurity 4.3.7 Small business 4.3.8 Volunteers and other special category workers 4.4 Overview and Conclusion
98 108 110 118 123 123 125 129 135 137 142 143 145 146 147
Chapter 5: The current regulatory framework and changing employment relationships: Workers compensation and rehabilitation 5.1 Workers’ compensation coverage, knowledge of entitlements and claims behaviour 5.1.1 Introduction: Setting the Scene 5.2 Changing employment arrangements and the administration of workers’ compensation and rehabilitation 5.2.1 Coverage and under-utilizing claims behaviour 5.2.2 The link between coverage, claims data and prevention 5.2.3 Increases in claim frequency or costs 5.2.4 Determining eligibility and who is the responsible employer 5.2.5 Inter-jurisdictional issues, foreign and illegal workers 5.2.6 Ensuring insurance cover, fraud and premium-rating problems 5.2.7 Access and equity in administering claims 5.2.8 Access to/use of rehabilitation and return to work 5.2.9 Agency responses and cost-shifting/social security problems 5.3 Conclusion
151 151 162 162 166 170 171 175 178 186 188 192 197
Chapter 6: Employer, Worker/Union and OHS Professional Perspectives 6.1 Introduction 6.2 Employer and labour-leasing agency perspectives 6.2.1 Outsourcing/subcontracting 6.2.2 Home-based work, telework and telecall centres 6.2.3 Labour hire/labour leasing 6.2.4 Casual, temporary and itinerant workers 6.2.5 Part-time work and multiple jobholding 6.2.6 Downsizing/restructuring and job insecurity 6.2.7 Small business 6.2.8 Volunteers and other special category workers 6.3 Challenges for Workers and Unions 6.3.1 Problems in identification for the purpose of preventative action and representation in workers’ compensation proceedings 6.3.2 Changes industrial relations institutions and regulation
200 200 201 202 203 205 207 207 208 208 209 211 211
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6.3.3 Outsourcing/subcontracting 6.3.4 Home-based work, telework and telecall centres 6.3.5 Labour hire/labour leasing 6.3.6 Casual, temporary and itinerant workers 6.3.7 Part-time work and multiple jobholding 6.3.8 Downsizing/restructuring and job insecurity 6.3.9 Small business 6.3.10 Volunteers and other special category workers 6.4 Challenges for OHS and other Professionals 6.5 Conclusion
213 214 215 217 218 218 218 219 220 220
Part 2: Evaluating Existing Remedies and Developing New Strategies: Prevention
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Chapter 7: Regulatory initiatives, enforcement strategies and sponsored collaboration 7.1 Introduction 7.2 General Legislative and Policy Initiatives 7.2.1 General duties and the problem of determining the status and responsibilities of parties 7.2.2 Codes of practice, regulations, guidance material and risk assessment 7.2.3 Workplace registration, incident notification and other administrative issues 7.2.4 Controls on major industrial hazard facilities 7.2.5 Addressing limitations in existing participatory mechanisms 7.3 Initiatives in relation to specific work arrangements 7.3.1 Outsourcing/subcontracting 7.3.1.1 Provision of Information, New Codes and Collaborative Ventures 7.3.1.2 Targeted Prosecutions and Enforcement regimes 7.3.1.3Controls on Government Contracts 7.3.1.4Mandating Minimum Standards 7.3.2 Home-based work, telework and telecall centres 7.3.2.1 Provision of Information, New Codes and Collaborative Ventures 7.3.2.2 Controls on Government Contracts/Purchasing and Enforcement Activity 7.3.3 Labour hire/labour leasing 7.3.3.1 Provision of Information, New Codes and Collaborative Ventures 7.3.3.2 Targeted Prosecutions and Enforcement Strategies 7.3.4 Casual, temporary and itinerant workers 7.3.4.1 Provision of Information, New Codes and Collaborative Ventures 7.3.4.2 Targeted Prosecutions and Enforcement Strategies 7.3.4.3 Conclusion 7.3.5 Part-time work and multiple jobholding 7.3.5.1 Provision of Information, New Codes and Collaborative Ventures 7.3.5.2 Targeted Prosecutions and Enforcement Strategies 7.3.6 Downsizing/restructuring and job insecurity 7.3.6.1 Provision of Information, New Codes and Collaborative Ventures 7.3.6.2 Targeted Prosecutions and Enforcement Strategies 7.3.7 Small business 7.3.7.1 Provision of Information, New Codes and Collaborative Ventures 7.3.7.2 Targeted Prosecutions and Enforcement Strategies 7.3.8.3 Conclusion
223 223 223 223 225 227 230 232 235 235 236 245 248 251 251 251 254 259 259 264 271 271 276 280 280 280 280 280 281 282 286 286 289 290
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7.3.8 Volunteers and other special category workers 7.3.8.1 Provision of Information, New Codes and Collaborative Ventures 7.3.8.2 Targeted Prosecutions and Enforcement Strategies 7.3.9 Combined regulatory strategies 7.4 Conclusion 7.4.1 The provision of information, new codes and collaborative ventures with industry 7.4.2 Contract tender requirements and minimum labour standards 7.4.3 Targeted Prosecutions and enforcement strategies 7.4.4 Final Observations
291 291 292 294 294 296 297 297 298
Chapter 8: Voluntary employer/industry initiatives 8.1 Introduction 8.2 Outsourcing/Subcontracting 8.2.1 Voluntary Agreements, Standards and Codes 8.3 Home-based Work, Telework and Telecall Centres 8.3.1 Voluntary Agreements, Standards and Codes 8.4 Labour Hire/Labour Leasing 8.5 Casual, Temporary and Itinerant Workers 8.6 Part-time work and Multiple Jobholding 8.7 Downsizing/restructuring and job insecurity 8.8 Small Business 8.9 Voluntary and Other Special Category Workers 8.10 Conclusion
301 302 308 309 309 311 315 316 316 317 317 317
Chapter 9: Union sponsored or endorsed initiatives 9.1 Introduction 9.2 Subcontracting/Outsourcing 9.2.1. Special award provisions and tracking mechanisms 9.3 Home-based Work, Telework and Telecall Centres 9.4 Labour Hire/Labour Leasing 9.5 Casual, Temporary and Itinerant Workers 9.6 Part-time work and Multiple Jobholding 9.7 Downsizing/restructuring and job insecurity 9.8 Small Business 9.9 Voluntary and Other Special Category Workers 9.10 Conclusions Chapter 10: Worker entitlements
Part 3: Evaluating Existing Remedies and Developing New Strategies: Workers’ Compensation and Rehabilitation
319 323 325 325 327 328 329 329 330 330 331 333
335
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Chapter 11: Regulatory initiatives, enforcement strategies and sponsored collaboration 11.1 Introduction 11.2 Issues of coverage, eligibility and claims behaviour 11.3 Improvement in Information Collection and Premium-Setting 11.4 Failure to take out workers’ compensation cover and ‘under-insurance’ 11.5 Inter-jurisdictional Issues, Foreign and Illegal Workers 11.6 Return to Work/Rehabilitation 11.7 Initiatives in relation to specific work arrangements 11.7.1 Outsourcing/subcontracting 11.7.2 Home-based work, telework and telecall centres 11.7. 3 Labour hire/labour leasing 11.7.4 Casual, temporary and itinerant Workers 11.7.5 Part-time work and multiple jobholding 11.7.6 Downsizing/restructuring and job insecurity 11.7.7 Small business 11.7.8 Voluntary and other special category workers 11.8 Conclusion
336 336 343 345 351 352 353 353 355 356 359 359 360 360 362 363
12. Voluntary employer/industry initiatives 12.1 Introduction 12.2 Outsourcing/Subcontracting 12.3 Home-based Work, Telework and Telecall Centres 12.4 Labour Hire/Labour Leasing 12.5 Casual, Temporary and Itinerant Workers 12.6 Part-time work and Multiple Jobholding 12.7 Downsizing/restructuring and job insecurity 12.8 Conclusion
365 365 365 365 366 366 366
Chapter 13: Union sponsored or endorsed initiatives 13.1 Introduction 13.2 Outsourcing/Subcontracting 13.3 Home-based Work, Telework and Telecall Centres 13.4 Labour Hire/Labour Leasing 13.5 Casual, Temporary and Itinerant Workers 13.6 Part-time work and Multiple Jobholding 13.7 Downsizing/restructuring and job insecurity 13.8 Small Business 13.9 Voluntary and Other Special Category Workers 13.10 Conclusion Chapter 14: Worker entitlements Part 4: Regulatory Collaboration and Other Measures
368 369 369 369 369 369 369 370 370 370 371 374
Chapter 15: Regulatory Collaboration and Other Measures
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15.1 Introduction 15.2 Coordinated Multi-Agency Strategies 15.2.1 Clothing outworkers: An integrated approach to minimum labour standards, OHS and workers’ compensation 15.2.2 Another multi-agency strategy – road transport 15.2.3 Labour hire: A potential area for a multi-agency approach 15.2.4 Managing health risks affecting diverse groups of workers and the community at large 15.3 Consistent Regulatory Policies and a ‘Whole of Government’ Approach 15.4 Conclusion Part 5: Strategic Options and Recommended Priority Actions
375 375 378 379 381 382 382 383 384
Chapter 16: Strategic Options and Recommended Priority Actions 16.1 Introduction 384 16.2 Prevention 16.2.1 Policy and Legislative Reform 16.2.1.1 The scope and application of general duty provisions and key definitions 16.2.1.2 Consultation/participation 16.2.1.3 Industries requiring specific additional measures 16.2.1.4 Home-based work and at-risk groups 16.2.1.5 Hazardous substance exposure and health effects 16.2.1.6 Information 16.2.2 Compliance and Enforcement 16.2.2.1 Improved awareness of legal obligations and promoting compliance 16.2.2.2 Improved compliance information and targeted enforcement 16.2.2.3 Enhanced awareness of and capacity to address these issues amongst inspectoral, accredited OHS trainers and other parties 16.2.3 Communication and Influence 16.3 Workers’ Compensation and Rehabilitation 16.3.1 Coverage, claims behaviour and worker entitlements 16.3.2 Information and claims management 16.3.3 Return to work References
398
Persons Interviewed or Assisting the Project
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Appendices Appendix 1: Semi-structured Interview Schedule Used in Project
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Appendix 2: Subject Ethics Approval Document
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Appendix 3: Workplan and Anticipated Outcomes
453
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List of Tables Table 2.1: New South Wales: Persons in full-time or part-time employment at the time of injury or illness, 1995/96-1999/2000
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Table 2.2: New South Wales: Persons in permanent or non-permanent employment at the time of injury or illness, 1996/97-1999/2000
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Table 2.3: Victoria – Females in full-time and part-time employment who experienced an injury, 1995/96-2000/01
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Table 2.4: Victoria – Males in full-time and part-time employment who experienced an injury, 1995/96-2000/01
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Table 2.5: New South Wales – Workers compensation claim costs by part-time/ full-time employment status 1997/98-1999/2000
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Table 2.5: New South Wales – Workers compensation claim costs by permanent/ non-permanent employment status 1997/98-1999/2000
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Table 5.1: NSW injured workers who did not apply for workers’ compensation by reason why they did not apply, October 1993
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Table 5.2: Persons Who Experienced a Work-Related Injury or Illness – Main reason for not applying for Workers’ Compensation
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Table 5.3: Persons Who Experienced a Work-Related Injury or Illness - Workers’ Compensation
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Table 5.4: Percentage of 1,588 precariously employed Australian workers with workers’ compensation coverage
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Table 6.1 Australia: Unionization Rates: Permanent and Casual Employees by Sex (%). August 1994
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Abbreviations used ABS ABL ACCI ACGIH ACT ACTU AFL-CIO AIG AIRC AMIEU AMWU ANZSIC ATO AWA AWU CFMEU CDC CTP DIR EFILWC EU ETUC FIOH HSC HSE HSR HWCA IRC IRG MBA MOU NDS NESB NIOSH NIWL NOHSC NSW OHS OHSMS OSHA PAYE PPE PPS RSCA RSR SCWLR SMEs
Australian Bureau of Statistics Australian Business Limited Australian Chamber of Commerce and Industry American Conference of Government Industrial Hygienists Australian Capital Territory Australian Council of Trade Unions American Federation of Labor-Congress of Industrial Organisations (USA) Australian Industry Group Australian Industrial Relations Commission Australian Meat Industry Employees Union Australian Manufacturing Workers’ Union Australian and New Zealand Standard Industrial Classification Australian Taxation Office Australian Workplace Agreements Australian Workers' Union Construction, Forestry, Mining and Energy Union Centres for Disease Control and Prevention (USA) Compulsory Third Party (motor accident insurance) Department of Industrial Relations European Foundation for the Improvement of Living and Working Conditions European Union European Trade Union Congress Finnish Institute for Occupational Health Health and Safety Commission (UK) Health and Safety Executive (UK) Health and Safety Representative Heads of Workers’ Compensation Authorities Industrial Relations Commission Industry Reference Group (NSW) Master Builders Association Memorandum of Understanding National Data Set for Compensation Based Statistics (subset of claims data) Non-English Speaking Background (immigrant) National Institute for Occupational Safety and Health (USA) National Institute for Working Life (Sweden) National Occupational Health and Safety Commission New South Wales occupational health and safety occupational health and safety management system Occupational Safety and Health Administration (USA) Pay As You Earn personal protective equipment Prescribed Payments System Recruitment and Consulting Services Association (Australia) Regional Safety Representatives (Sweden) Swedish Council for Work Life Research small and medium sized enterprises
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TAFE TCFUA TUC TUTB ULIS WCB WIC
Technical and Further Education (colleges responsible for trade etc training) Textile, Clothing and Footwear Union of Australia Trades Union Congress (UK) Trade Union Technical Bureau (OHS unit of the ETUC) Uninsured Liability and Indemnity Scheme Workers’ Compensation Board WorkCover Industry Classification
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Glossary of Key Terms Used Casual employee Older term used for workers engaged on a short term (usually hourly or daily basis) with no continuity of service (ie each period of work is a distinct period of service even though the worker may spend months or years with the same employer) or expectation of permanent employment. This term still has wide currency in Australia although in many other countries the term temporary worker has superseded it. In this report the term is used interchangeably with temporary worker (to avoid the confusion that might otherwise arise to readers). In Australia casual workers are usually paid on a hourly basis and receive a loading (often around 15-20% of the normal weekly wage rate) in lieu of sick leave, annual leave and long service leave. Casual workers are usually afforded less protection from unfair dismissal than employees with ongoing employment. Child worker Normally refers to person under the age of 15 years engaged in some form of work for which they are either directly remunerated or where the person/s they are assisting (such as a homebased garment worker) is paid. In NSW the legal age at which can be employed is 15 years and 8 months. Contingent work A catch all term of North American origin and coined in the 1980s to describe work arrangements where workers were provided on a temporary or flexible basis. There is some debate as to precisely what groups of workers should be included under this label. However, typical inclusions are temporary workers (including on-call) workers, short-term contract workers, leased workers, self-employed subcontractors and some home-based workers (for a more detailed discussion see Chapter 1). See also precarious employment. Dependent contractor Refers to a person engaged in a commercial contract (ie not a contract of service) but with work arrangements consistent with them being an employee (eg doing more than 80% of their work for a single 'employer'). Downsizing Refers to reorganization of an organisation’s operations that entails a significant reduction in the number of employees (achieved through induced voluntary separation such as early retirement or transfer/relocation as well as enforced redundancy). This process is often the subject of euphemistic labels like ‘rightsizing’. It is sometimes also labeled as restructuring although not all restructuring will result in job losses and reduced staff numbers may be associated with other changes such as changes to technology.
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Family-helper Refers to a family member (child, spouse/partner, parents, nephew/niece etc) who works on a regular or irregular basis to assist with tasks undertaken by relative, most often a small business or home-based worker. Family-helpers may or may not be paid a wage for the work they undertake and even when paid this amount may not reflect the minimum rate for that task (for example the payment of a small allowance to children). There is little research into this highly informal labour arrangement although it is clearly important in a number of industries like farming/pastoral activities, small business retailing and hospitality. Some workers’ compensation acts (such as several in Canada see Bernstein et al, 2000) provide specific rules governing family helpers. Fixed Term Contract employee Refers to a worker engaged under a specific contract of limited duration (normally in Australia not more than five years and generally a good deal less). Fixed-term contract workers normally receive award/agreement wages and leave identical or similar to permanent workers (except for upper level management positions where no award applies and packages are negotiated individually) apart from long service leave (where legislation usually specifies they receive a pro rata entitlement or payment in lieu). Full-time employee Refers to a worker normally employed for the standard hours specified under an industrial award or agreement (usually between 35 and 40 hours per week not counting overtime). May be permanent or casual though the majority of full-time workers in Australia are also permanent employees. Where casual workers are employed on a full-time basis they receive a loading in lieu of the statutory/award entitlements of permenent employees. Home-based work Refers to situation where work is carried out in the worker’s home rather than the employer’s premises. Historically, the term usually referred to situations where workers undertaking such tasks were entirely engaged at home (and as subcontractor rather than employee). However, the current situation is more complex, with many workers spending some part of their time working time (say a day or two a week) in addition to full-time home-based workers. Debate with regard to home-based work often confines itself to full-time homeworkers. Home-based workers can be employees or self-employed and their legal employment status is frequently ambiguous. Illegal Worker Refers to a worker or groups of workers whose employment contravenes specific labour legislation or other legislation (such as the employment of under-age workers or, as is more the case in the USA, young workers in precluded occupations) or where the work itself is illegal or has ambiguous legal standing (such as at least some types of prostitution). Another group within this category are persons in receipt of unemployment, disability or another welfare benefit who undertake paid employment (contrary to the conditions of these benefits) that they fail to declare to government welfare and taxation agencies. The term also refers to
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workers engaged in paid work that is legal but who lack the legal right to engage in that work because they are an illegal immigrant or are overseas visitors/tourists working contrary to their visa or work permit. In some countries (though not Australia) illegal immigrants are referred to as undocumented workers because they lack the documentation necessary for them to stay and undertake paid work in the country where they presently reside. See also undocumented worker/illegal immigrant. Independent contractor Refers to person employed on a commercial contract and with work arrangements inconsistent with them being an employee (in terms of court rulings though this is often a contest terrain). Informal sector/informal sector worker The term informal sector or informal economy was coined in the 1970s in connection with developing countries. Initially viewed as a stage of industrialization, its continued expansion (often to in excess of 50% of the workforce in these countries) over the past two decades has, along with the growth of precarious employment in industrialised countries, has caused a reevaluation. Normally included within the notion of the informal economy is the traditional subsistence farming and craft sectors of developing countries along with informal enterprises (including micro-enterprises) and informal labour arrangements engaged in activities such as street selling, paid domestic service, fishing, recycling and some forms of industrial production (criminal activity and the reproductive economy are excluded). The workers engaged in these activities (which in areas like street selling often include many children) are either self-employed or work in enterprises that are not registered and for which there is no regulation of employment arrangements (in terms of rights and entitlements). In part the definition depends on the more restricted coverage of employment and welfare legislation in developing countries than industrialised countries where the bulk of precarious employment/contingent work still occurs within the formal sector of the economy (although for some workers in the latter regulatory protections may be more apparent than real once actual enforcement is considered). Hence, the terms informal work and precarious employment are not analogous although it seems reasonable to suggest informal sector workers are precariously employed (and some workers in the formal sector of developing countries would also fit into this category). A small informal sector almost certainly exists within industrialised countries but has not, so far as I am aware, been investigated. Itinerant worker Refers to geographical mobile temporary worker who follow specific tasks from region to region, such as seasonal fruit pickers or agricultural labourers or newer categories of mobile workers such tourist backpackers who seek short-term employment at various destinations in order to fund their travel. Labour hire/labour leasing Refers to the workers who are supplied by a firm or agency to work for employers on a temporary basis. While labour leasing is the more common term for this arrangement in North America and Europe in Australia and New Zealand the older term labour hire retains widespread usage. Historically, in industries like building labour hire operated on an informal
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basis collecting workers for jobs from known ‘pick-up’ points. Though this practice still survives modern labour leasing firms (some global multinational operators) retain lists of workers. Micro-small business Refers to firm with few employees. In Europe the cut-off is usually put at 1-9 employees though in Australia the cut-off has been put as low as five employees and, in some cases, own-account workers have been included under this heading. See also small business and own-account worker. Multiple Jobholding Refers to the situation where a worker simultaneously holds jobs with two or more different employers. Originally often a practice where full-time workers sought to supplement their income with a second part-time (or more rarely a full-time) job it has become more common for workers unable to find a full-time job to ‘cobble’ a number of part-time jobs together. Some highly skilled workers have deliberately split their work commitments amongst employers. Another term (with more positive connotations) used to describe multiple jobholding is portfolio employment. On-call employees/workers A category of temporary worker who is listed with an employer and is called in at short notice to work at on a regular or irregular basis. Outsourcing Refers to the process of putting out or subcontracting a task originally undertaken within the organisation (such as cleaning, catering, maintenance, security or production/service delivery) to competitive an external provider. Particularly in the public sector, competitive tendering is the preferred method of deciding the external provider. Outworker Older term for home-based worker still widely used in Australia (the term is also used in several Canadian workers’ compensation statutes), though most often in connection to the clothing trade/garment making. Term probably originally derived from the fact that in the 19th century if not before garment making and some other types of home-based work were a result of the ‘putting out’ of tasks by manufacturers or retailers. See home-based work. Own-account worker Refers to person operating an unincorporated enterprise or engaging independently in a profession or trade and who hires no employees. Part-time employee Refers to a worker who usually works a regular number of hours (though the actual number of hours may be fixed or variable) less than full-time worker (as specified in legislation, the
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award or industrial agreement but normally between 35 and 38 hours per week). When not a casual worker (in practice there is considerable overlap between the categories), a part-time worker in Australia has continuity of employment and accrues entitlements such as annual leave, sick leave and long service leave on a pro rata basis. See permanent or ongoing employee. Permanent or ongoing employee Worker employed with an expectation of ongoing employment and entitled to annual leave, sick leave, long-service leave and redundancy payment (in the case of extended service). When engaged full-time permanent workers in Australia are usually entitled to at least four weeks annual leave, 7-10 days sick leave and 12 weeks long service leave (after 10 years in the first instance). Depending on their hours, part-time workers are entitled to pro-rata entitlements. Mainly used in counter-position to short term contract or temporary employment, the concept of permanent employee can be misleading as in many countries (like Canada, the USA and Australia) the job is not so permanent as an employment contract of indefinite duration that may be ended by either party with very little notice. In Australia, the employer can terminate the contract in most circumstances so long as redundancy and other entitlements are met and there has been no breach of procedure to permit a claim by the worker for unfair dismissal (which if found includes the option of monetary compensation or reinstatement). In some countries, such as France, there are more stringent regulatory protections for workers holding indefinite employment contracts while in others, like the USA, the level of regulatory protection is lower than Australia. Hence, as with temporary employment, there is a need to recognise some country-specific modalities in relation to permanent employee. Precarious employment Like contingent work, an omnibus term of French origin used to describe a number of flexible work arrangements marked by insecurity or limited tenure. Categories of work included essentially similar to those mentioned in relation to contingent work. See contingent work. Self-employed contractor Refers to persons who operate their own business without employees and supply labour services to clients on an explicit or implicit commercial basis. Short-term Fixed Contract job Refers to jobs of fixed duration, normally of 12 months or less (in the French literature reference is also made to very short-term fixed contract jobs of three months or less). Shortterm fixed contract jobs may be seen as a particular form of temporary employment (but with rather more security than a casual job). In some countries, notably France, the legislative framework makes fixed contract jobs a more important category in the discussion of temporary employment than is the case in Australia.
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Small business Generally refers to an employer with fewer than 20 to 50 employees - the precise size boundary varies between countries. In Australia, small business is normally defined as either fewer than 20 or fewer than 30 employees. A higher limit is sometimes placed on manufacturing employers (ie less than a 100 employees) where firms tend to be larger. In the USA official statistics occasional refer to firms with less than 200 employees as small but this practice appears exceptional (the upper limit for small business being 50 employees in other countries with which we are familiar). See also micro small business. Subcontracting/subcontractor Refers to the subletting of tasks by a contractor and the workers undertaking those tasks. Subcontractors may be firms with employees, partnerships or self-employed workers. Pyramid subcontracting refers to subletting sub-subletting of tasks resulting in multi-tiered contractual arrangements for the performance of a specific task (such as the production of clothing, provision of security or constructing a building). See also outsourcing. Teleworker Usually refers to workers who are able to work at a location remote from the employer’s premises (such as their home) due to telecommunication connections (such as on-line computer networks). Telework can be undertaken at a single fixed location (including ‘offshore’), at alternating locations (such as the home and office or between several offices) or be entirely mobile. Teleworkers are sometimes subdivided into those that are home-based, mobile teleworkers, combined home-based/mobile teleworking and occasional teleworking. Teleworkers may be either self-employed or employees. Telecall Centre Workers Refers to workers employed in service provision/sales or telemarketing using phones or a combination of computers and phones who are put into a location dedicated to this task. Centres can be located within an organisation (ie in-house) or remote to it. Centres and their staff may also remain as part of the organisation or be part of an outsourced activity (including joint ventures between the organisation and a subcontractor). Such workers are sometimes subdivided into those engaged in service provision (such as the provision of overthe-phone advice on computer difficulties) and those engaged in more repetitive/potentially stressful tasks answering of client inquiries or telemarketing. Temporary worker/employee See casual worker. Temporary/Temp agency worker Another term for labour hire workers or leased labour.
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Undocumented Worker/Illegal immigrant workers Refers to persons undertaking paid employment in a country who arrived as an illegal immigrant (and may include those in the process of applying for refugee status) and who lack the necessary documentation to retain residency. Unless they are in the process of applying for refugee status such workers may be subject to a threat of immediate deportation. Volunteer An unpaid worker such as those working for charity or community care providers like ‘Meals on Wheels’, religious organisations, State emergency services, bush fire brigades and the like.
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Table of Cases Adolf Grandovec v Roger Burdon, Tasmanian Industrial Commission, Unfair dismissal Decision T7700 of 1998. Covillion v Plante Brothers Inc, 3364 CRB-07-96-06 11 December 1997 Connecticut Compensation Review Board Crouch v Bannerman, Tasmanian Workers’ Rehabilitation and Compensation Tribunal Hearing 16 June 1998. Daykin v Neba International Couriers & Anor [2002] WASCA 213 (8 August 2002). Dowling v Sol V Slotnik and Diane Reverand, 3062 CRB-4-95-5 and 3277 CRB-4-96-2 5 February 1997, Connecticut Workers’ Compensation Review Board) Drake Personnel Limited v WorkCover Authority of New South Wales (Inspector Ch’ng) (1999) 90 IR 432 Gordon Tuckley v NSW Department of Community Services [1999] NSWIR Comm 402 Jones v Lillibridge 3149 CRB-2-95-6 10 December 1996 Mason & Cox Pty Ltd v McCann (1999) 74 SASR 438 Minuit v. PDF Construction Company et al, 3145 CRB-3-95-7, 26 November 1996, Connecticut Workers’ Compensation Review Board Moatt v Mid Western Health Service, NSW Chief Magistrates Court, Matter No. 95/137, Reasons for Decision, 19 December Paul Daniel Godford v Oil Drilling and Exploration Pty Ltd, [2001], District Court of Queensland, 355. Printed and Kindred Industries Union and Hannanprint Victoria, 1995, Australian Industrial Relations Commission, H0237 Dec 239/95 M Print L9150. Rasit Girgin v united Energy Ltd and Skilled Engineering Ltd [2002], Melbourne Magistrates Court M2809278 and M2809110, Reasons for Decision, 25 January. Reiss v Drake Personnel Ltd, trading as Drake Industrial, Ringwood Magistrates Court, 7 December 2000, at 24 Ruiz v Belk Masonry Co., No.01-98 NC Ct. App. Feb 19 2002 Smith and Others v Moore Paragon Australia Ltd., Australian Industrial Relations Commission, [2001], U1310-1328.
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State of Tasmania v Brett [2002] TASSC 33 (Supreme Court of Tasmania (FC), 5 June 2002,). Swift Placements Pty Ltd v WorkCover Authority of New South Wales (2000) NSWIR Comm 96 IR 69 The Health Services and Support-Facilities Subsector Bargaining Association and others v. The Province of British Columbia, Supreme Court of British Columbia, Statement of Claim, 2002 The Queen v John Norman Tormey (1995), Melbourne County Court: Criminal Jurisdiction, 5 September 1995, Sentence The Queen v Concrete Construction Group Pty Ltd (1995), Melbourne County Court Criminal Jurisdiction, 31 July 1995 Sentence. The Workers Rehabilitation and Compensation Corporation v JR Engineering Services Pty Ltd, Western Mining Corporation (Olympic Dam Operations) and Jeffrey John Ball [1995] Supreme Court of South Australia, No. SCGRG 94/970 Judgement 4992. Thompson v Cooee Point Abattoirs Pty Ltd [2002] TASSC 41 21 July 2002. Velez-Ramos v Labor Force of America et al 3070 CRB-4-95-5 25 November 1996 Connecticut Compensation Review Board Walton v Hector Trucking 13 Conn Workers’ Comp. Rev. Op.239, 1835 CRB-1-93-9 13 April 1995 WorkCover Authority of New South Wales (Inspector Magill) v Boral Gas (NSW) Pty Ltd (1996), NSWIR Comm Matters Nos. CT 903, 904 and 905 of 1991. WorkCover Authority of New South Wales (Inspector Ankucic) v Drake Personnel Limited (1997) 89 IR 374
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WorkCover Authority of NSW (Inspector Hughes) v Boral Montoro Pty Ltd, [1998] NSWIR Comm 86 IR 1. WorkCover Authority of NSW (Inspector May) v Swift Placements Pty Ltd (No.2) [1999], NSWIR Comm 96 IR 24. WorkCover Authority of NSW v Byrne Civil Engineering Constructions Pty Ltd, [2001] NSWIR Comm 264. WorkCover Authority of NSW v Consolidated Constructions Pty Ltd, [2001] NSWIR Comm 263. WorkCover Authority of NSW v Develco Project Pty Ltd, [2001] NSWIR Comm 97. WorkCover Authority of NSW (Inspector Legge) v Coffey Engineering Pty Ltd (no.2) [2001] NSWIR Comm 319. WorkCover Authority of NSW (Inspector Paul Mansell v Anytime Industrial Services Pty Ltd, [2001] NSWIRComm 237 12 October. WorkCover Authority of NSW (Inspector Robins) v Milltech Pty Ltd, [2001] NSWIR Comm 82 of 2000. WorkCover Authority of NSW (Inspector Robins) v Labour Co-operative Ltd (No.1) [2001] NSWIR Comm 223. WorkCover Authority of NSW (Inspector Robins) v Labour Co-operative Ltd (No.2) [2002] NSWIR Comm 2. WorkCover Authority of New South Wales (Inspector Pompili) v Central Sydney Area Health Service (2002) NSW IR Comm 44. WorkCover Authority of NSW [Inspector Clark] v Raymond Jabboury (No.2) [2002] NSWIR Comm 70 WorkCover Authority of NSW [Inspector Milligan] v Transfield Pty Ltd. [2002] NSWIR Comm 125. WorkCover Authority of NSW [Inspector Milligan] v Worley Pty Ltd. [2002] NSWIR Comm 125. WorkCover Authority of NSW [Inspector Milligan] v Manbead Pty Ltd. [2002] NSWIR Comm 130
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Executive Summary Over the past 20 years there has a significant shift in employment relationships in New South Wales and Australia more generally. Approximately one quarter of the employed workforce in Australia now holds a temporary job and roughly the same number a part-time job – at least double the comparable figure in the early 1980s. These changes, which are mirrored to a greater or lesser degree in most if not all industrialized countries, raise a number of critical issues in relation to both preventing occupational injury and disease and providing compensation/rehabilitation to injured workers and their dependents. A thorough review of the available scientific evidence (over 160 studies published internationally between 1966 and 2002) demonstrates that a number of flexible work arrangements are associated with a measurable deterioration in OHS indices (including injury rates, disease, psychological distress, legal knowledge, compliance with OHS programs and access to workers’ compensation/rehabilitation). Well over 80% of studies found an association (and most of the remaining studies were indeterminate) between outsourcing, job insecurity, temporary employment and the like with inferior OHS outcomes. Only with regard to the small number of studies of permanent part-time work did this pattern not hold. Neither methodology nor country where the study was undertaken appeared to affect this result. Such a decisive set of results in unusual in a large review of the scientific literature and provides compelling evidence that, in general, more flexible work arrangements are have having serious adverse effects on the health and well-being of workers. While the reasons for this association are not always explored in the research just cited a number of factors are repeatedly identified. First, economic and reward pressures associated with these types of work arrangement (payment by results, under-bidding on contracts, inadequate resources, the absence of full insurance cover) encourage hazardous work practices, including corner cutting on safety by subcontractors and others. Second, the introduction of third parties to work arrangements (via subcontracting or labour hire), the creation of multi-employer worksites, the growth of smaller worksites, a lack of planning (including induction and training of temporary workers or the OHS effects of downsizing) foments potentially dangerous forms of disorganisation. This problem is exacerbated by the inability of many contingent workers to represent their interests in terms of OHS. Third and finally, the conventional regime for regulating OHS and workers’ compensation has been slow to adapt to the special demands of contingent work arrangements. The bypassing of minimum employment standards, and problematic access to workers’ compensation entitlements, has also had adverse effects. This report identified a number of areas where further research would be especially valuable, including the OHS effects of telework and telecall centre work, the health effects (as distinct from safety) of outsourcing arrangements, the safety effects (as distinct from health effects) of downsizing/restructuring and the extent of and OHS effects of home-based work. By and large, interviews conducted with union, employer and government agency staff, written submissions and documentary evidence collected in the course of this project reinforced the results from the review of the scientific literature. Without exception, regulatory agencies saw changing employment relationships as posing very serious issues for the community as a whole. One consequence of this was that were keen to both contribute to 23
and be informed of the results of this project. There is clear evidence of similar concerns in other countries and regions such as the European Union. Flexible work arrangements pose serious problems to regulators, not all of which are immediately apparent. For example, more frequent job changes not only make it more difficult to manage worker exposure to risks of injury (due to inexperience, lack of training and the like) but also make it more difficult to identify specific exposure to hazardous substances and other factors giving rise to work-related disease and illness. It also makes it more difficult for affected workers to obtain their entitlements to workers’ compensation or to make claims at common law. The documentary and interview-based research for this project identified a number of serious regulatory issues. With regard to prevention, the report identified problems in terms of: • •
• •
•
Stakeholder understanding and regulatory implementation of general duty provisions in OHS legislation. The NSW OSH Act has a significant limitation in this regard that needs to be addressed; Despite some recent initiatives (in relation to subcontracting, labour hire and telecall centre work) there serious generic or industry specific gaps in the coverage of codes of practices, regulations and guidance material (especially in relation to temporary workers and home-based work). The growth of these work arrangements has seriously weakened the participatory mechanisms (workplace committees and health and safety representatives) that are central and critical feature of modern OHS legislation. Theses changes have also had significant administrative effects. For example, the growth of mobile and home-based work, identifying employer and worker status in an increasing complex web of subcontracting or corporate arrangements, and more complex forms of work organisation all make it increasingly difficult for inspectorates like WorkCover NSW to carry out their inspection and enforcement activities. Major problem areas for regulators include subcontracting, labour leasing, temporary workers and home-based work.
With regard to workers’ compensation/rehabilitation, the report identified problems in terms of: • • • •
•
A decline in formal coverage of these systems as the number of workers in excluded categories grows; A drop in effective cover which may be at least significant due to the impact of increasing ignorance of entitlements amongst workers, employment insecurity and job churning on claims behaviour; Additional administrative problems in terms of determining worker eligibility and who is the responsible employer; An apparent increase in premium avoidance, under-insurance or claims manipulation in association with the growth of small business/subcontracting arrangements and labour leasing) notwithstanding existing deeming provisions and enhanced enforcement activity; Return to work has become more difficult because of the growth of small business, temporary and leased workers. 24
Other regulatory effects include: • • • •
There is some evidence of cost shifting from workers’ compensation to Medicare, social security and other insurance systems; The formal and informal exclusions from workers’ compensation data weaken its value for devising and evaluating prevention and workers’ compensation strategies; The growth of these arrangements affects other OHS surveillance and reporting systems (including requirements to report under OHS legislation, workplace monitoring and epidemiological studies). A number of industries appear to be marked by a high level of non-compliance in terms of OHS, workers’ compensation, industrial relations standards (on wages and hours) and other statutory entitlements. These industries would seem to require multiagency strategies.
The report identified a number of initiatives in connection to a number the problems just identified. The report identified policy initiatives in virtually every jurisdiction though some were more active than others. Despite overlap in the areas being targeted by jurisdictions there were also significant variations in terms of both the areas selected for targeting and the nature of the activity undertaken. In terms of legislative activity at least one jurisdiction is giving serious consideration to flaws in its existing general duty provisions and a number of others are giving consideration to either reintroducing some form of workplace registration (albeit perhaps on a selective basis) addressing limitations in existing procedures for worker involvement. A number of agencies are also examining the possibility of better aligning key definitions (such as worker) under various bodies of legislation (including OHS, workers’ compensation, industrial relations and taxation laws). There is also a growing recognition of serious under-reporting problems in relation to OHS outcomes for some types of work arrangement. Several jurisdictions have moved to begin filling these gaps using a range of methods including workforce surveys and hospital admission reporting systems. A significant area of activity is the production of new guidance material (both generic and industry specific though more especially the latter) and the amendment of existing material to better reflect different work arrangements. Major areas where guidance material (both hard copy and electronic) was being developed include labour leasing, telecall centre work, the provision of homecare services, subcontracting, small business and younger workers. As the report notes, the quality of this material (in terms of addressing underlying issues, ease of access etc) has improved substantially over the past decade although comparatively little of material has been assessed in terms of effectiveness. Even within the areas just identified important gaps remain (with regard to both generic and industry specific material). In some other important areas, like temporary work and home-based work, little guidance material is available to either employers or workers. Agencies are also increasingly cross-referencing guidance material so that, for example, young workers can obtain information on OHS, workers’ compensation and their wages and other entitlements under industrial awards and agreements. In addition to the production of guidance material the report identified a number of other policy initiatives. These included collaborative ventures amongst several jurisdictions to 25
improve OHS amongst seasonal agricultural harvest workers as well as collaborative ventures with industry and unions to introduce improve subcontractor management and small builder safe work plans in the building and construction industry. Several of the latter (in Queensland and NSW) have been assessed and found to be effective although the practice of evaluating program initiatives is still exceptional (though becoming more common). These initiatives indicate that the combination of jointly developing interventions at an industry-specific level can be effective where both employers and unions are committed and where the process reinforced by a level of mandatory enforcement. In NSW Industry Reference Groups provide an avenue to facilitate the development of industry specific responses to the challenges posed by altered employment arrangements in terms of managing OHS. At one level the former developments can both reinforce and extend voluntary measures being undertaken by particular industry associations and unions to better manage subcontractor safety and the like that are also detailed in this report. In addition to the construction industry, agencies are beginning to direct attention and develop remedies in relation to industries where the pervasive use of particular work arrangements has been seen to pose particular problems. Notable here is the behind the label strategy that has been developed in NSW (and under consideration in a number of other jurisdictions) to address the OHS and other problems confronting clothing outworkers. In particular this involves a multi-agency approach to address regulatory evasion affecting a number of areas that is associated with complex web of subcontracting. Multi-agency integrated strategies are under consideration in at least two other industries (trucking and taxi-drivers) and this report has identified a number of other industries where a similar approach appears to be warranted. A notable feature of the clothing outworker strategy and that proposed for trucking is that they entail mechanisms for following or tracking the movement of work between parties via complex webs of contractual arrangements (what this report has labeled tracking mechanisms). This is designed to facilitate enforcement (and the information essential to undertake this) as well as the use of complex contractual arrangements to evade OHS and other employment standards. It also enables OHS agencies like WorkCover to implement general duty and other obligations with regard to all parties in a lengthy supply chain and to target those that may be seen as most responsible for OHS breaches and not simply those in closest proximity to the worker who is put at risk. The need to recognise and address elaborate supply chains as part of OHS enforcement programs is gaining wider recognition both in Australia and overseas and was specifically raised in the final communiqué of the NSW Workplace Safety Summit held in Bathurst in July 2002. In terms of more general enforcement activity there is clear evidence that agencies are making greater use of targeted audits and enforcement including the imposition of a range of sanctions (on the spot fines, the issuing of prohibition or improvement notices, major prosecutions and adverse publicity). Apart from sanctioning the activities of some parties these prosecutions have also be used to highlight legal responsibilities in relation to a number of work arrangements more generally, including subcontracting, labour leasing and more recently temporary workers. The more strategic application of enforcement needs to be extended to a number of other arrangements and industries that have been hitherto neglected. The development of a two-track model of enforcement utilizing an even wider array of sanctions, and with appropriate training of inspectors, would seem worthwhile in this regard.
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With regard to workers’ compensation a number of jurisdictions are re-examining coverage/deeming provisions with a view to expanding coverage or clarify/counteract attempts to ‘disguise’ employees as another category of worker. The claims behaviour/ access to entitlements of particularly vulnerable groups of workers (like some home-based workers) has also begun to receive attention, both in terms of research and in terms of new efforts to improve the provision of information. Several agencies are also trying to address problems of return to work with regard to particular work arrangements and employer configurations (notably small business and labour hire) but as yet this activity is on a relatively small scale in comparison to the problems that have been identified. As far as can judged existing employment security provisions are vigorously enforced which limits the scope for more extended ventures. Agency activity is especially critical because, in general, voluntary employer or industry initiatives (and union activity too for that matter) appear more exceptional than with regard to OHS prevention. Another initiative in relation to workers’ compensation undertaken by at least half the state agencies has been to reassess premium setting in relation to labour hire to combat what appears to be widespread problems in this area. Notable here has been the development of a set of premiums specific to the labour hire industry. Virtually every workers’ compensation agency has increased compliance audits and penalties (in NSW utilizing data mining) in order to counteract problems of both non-insurance and (more importantly) under-payment of workers’ compensation premiums. This activity has targeted particular industries and work arrangements where such problems are seen to be especially acute. In sum, agencies are developing a number of what appear to be valuable initiatives with regard to both prevention and workers’ compensation. However, as yet these efforts are only addressing part of the substantial problems identified in this report. Even using the most cost effective strategies (including inter-agency collaboration in Australia and information exchanges with overseas bodies), agencies are may require more resources to better address these problems.
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Introduction Changing work arrangements are increasingly being recognized by governments, researchers, professionals, industry and unions as one of the most (if not the most) significant emerging issue in relation to managing safety and health at work in the world today and one that is almost certain to be a dominant theme in policy debates for the foreseeable future. Over the past 20 years working arrangements have undergone a profound change in most if not all industrialized countries, entailing a significant increase in the proportion of the workforce holding part-time, home-based or remote location, casual/temporary, short-term fixed contract or multiple jobs. Repeated cycles of restructuring/downsizing by large employers and increased use of outsourcing/subcontracting arrangements have also affected working arrangements, including work organisation and job security. Privatisation, competitive tendering and corporatisation have wrought significant changes in work arrangements in the public sector. Further, the growth of labour leasing, franchise arrangements and small business (especially micro-small businesses that often self-employed subcontractors) in addition to the decentralization/decollectivisation of industrial relations regimes has altered work patterns, including effects on the timing of work and the total average hours worked. There is a growing body of both scientific and anecdotal evidence that these changes are having significant effects on occupational health and safety (OHS) and presenting new challenges to policy makers/regulators, managers, unions and professions. Evidence of increased concern amongst these groups is not difficult to locate but is worth briefly citing. In Australia the National Occupational Health and Safety Commission funded a number of studies examining the OHS effects of subcontracting and OHS performance in small business in the mid 1990s. Indeed, it could claim to have recognized this issue ahead of agencies in the EU and North America. Unfortunately, aside from some commissioned research on small business, this activity largely ceased with the elimination of a pool of competitive research funds and closure of the Research Standing Committee by 1997. The issue was discussed by a number of commissioned research projects on the implementation of OHS management systems, where it was generally portrayed as a potentially serious impediment to such developments (see for example, Gallagher et al 2001: 31-38). More recently, the issue has again received co-ordinated attention, being incorporated into the National OHS Research Action Plan Priorities (NOHSC, 2002a). In New South Wales the Legislative Council Standing Committee on Law and Justice inquiry into workplace safety received a number of written and verbal submissions on the problems posed by changing work arrangements and devoted a chapter to the subject in its final report (1998). The NSW government subsequently commissioned a working party to inquire into the labour hire industry, addressing both industrial relations and, to a lesser extent, occupational health and safety issues. The task force final report was released in 2001 (see NSW Labour Hire Task Force, 2001). In July 2002 the NSW government organised a workplace safety summit at Bathurst, with representatives of government, industry, unions and academics in attendance. In its final communiqué (NSW Workplace Safety Summit, 2002) the resolutions of a number of industry groups (including hospitality, transport, manufacturing and construction) made specific reference to the need to make special efforts to address the OHS needs of casual workers, contractors and supply chains, and other changes to work arrangements. In passing it can be noted that the implications of changing employment arrangements are also being explicitly considered as part of reviews of OHS legislation currently taking place in Queensland, South Australia and Western Australia. 28
On May 23 2001 a special meeting of the NOHSC Preventative Committee (with representatives of every federal, state and territory government OHS agency plus the social partners) met in Sydney to consider the issue of labour market change. Arising out the meeting a number of working parties were formed on particular issues with individual agencies agreeing to lead each (the WorkCover Corporation of South Australia agreed to act as lead agency in relation to labour hire, ComCare took on call centres and WorkCover NSW undertook to lead the working party on contracting). Within each working party individual jurisdictions agreed to undertake specific tasks. In the same year WorkSafe Victoria commissioned research on labour hire (for the final report see Underhill, 2002). Similarly in NSW, WorkCover established a research project on developing strategies to address the OHS and workers’ compensation challenges arising from changing employment arrangements, the outcome of which is this report. In establishing the parameters of this report WorkCover NSW was keen to gain an overview of the problems posed by changing work arrangements and practical remedies that might be engaged. The scope of the project entailed a clear recognition of the need to examine developments not only in other Australian jurisdictions but also internationally. As the last point implies, interest in the issue of changing employment relationships is by no means confined to Australia. Since the mid 1990s there has growing concern with these issues amongst scientific researchers, policy-makers, regulators, industry and unions in many if not most industrialised countries. Indeed, the issue is beginning to influence the highest echelons of policy-making. For example, in 1996 the UK Health and Safety Commission (HSC 1996) produced a policy paper on the issue and it has subsequently been included in the Health and Safety Executive's strategic planning. The issue was a major theme at a recent European Union Presidency Conference (EFILWC, 2001) held to discuss ways of improving the quality of work as part of the EU’s high productivity/high quality industry/work strategy. A series of large workforce surveys undertaken by the EU’s Dublin-based agency, the European Foundation for the Improvement of Living and Working Conditions, has indicated that changing work arrangements are having a significant impact of working conditions and OHS. The Brussels conference was part of an ongoing policy development (initiated by Sweden during its presidency of the EU and carried on by Belgium and, the current EU president, Spain). It included the creation of quality of work indicators to be used by policy-makers. In addition to this Dublin Foundation has prepared discussion papers on telework (see Huuhtanen, 1997), undertaken a review of available research on labour market change (Platt et al, 1997) and has also commissioned country specific reports. The European Agency for Safety and Health at Work based in Bilbao has also taken a strong interest in the OHS effects of contingent work arrangements. One of its first acts was to convene a conference on this issue and it has produced a stream of information on the issue even since (see for example, European Agency for Safety and Health at Work, 2002). In March 2002 the European Commission issues a communication Adapting to change in work and society: a new Community strategy on health and safety at work 2002-2006 identified changing forms of employment as one of four changes in work (along with ageing population, increasing female participation in the workforce and changes in the psychosocial work environment) with serious implications for OHS. The European Commission (2002:7) stated: The labour market is seeing increasingly diversified forms of employment, with particularly strong growth in temporary employment relationships. The type of
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contract and seniority in the firm show a negative correlation with health at work. People who have been employed for less than two years are more likely to suffer an accident at work than the average: for temporary workers, this effect is particularly pronounced in the construction industry and in health and social services. Among these new forms of work, part-time work and non-standard working times (e.g. shift work and night work) are likewise factors which add to the degree of risk. It can be explained more specifically by the lack of proper training, psychosomatic problems caused by shift work or night work, a lack of awareness on the part of company managers, or a lack of motivation in the case of workers in an insecure working relationship. However, the whole world of work is undergoing a shift towards more flexible forms of organisation. The tangible link between the place of work (e.g. a mine, factory or an office) and the work to be done is weakening, with the rapid spread of information technologies. These changes are not affecting employment relations as such, although they may blur the distinction between employed and self-employed persons. The fact is, though, that they raise specific problems, for example in relation to teleworkers: it is the employer who is responsible for their health and safety, no matter where the work is done. This means that steps have to be taken to prevent risk and to carry out checks where teleworkers work at different sites, or at home. Negotiations which began on 12 October 2001 between the social workers at Community multisectoral level are designed to address these matters.
Interest at European Union level is echoed in the activity in individual countries. Aside from the UK, the issue has been identified as requiring serious attention (including research as well as policy and legislative changes) by government committees/reports in France (see Appay and Thébaud-Mony, 1997), Finland (see Rantanen, 2001), Sweden, Italy (Synthesis Report, 1997), the Netherlands (van Waarden et al, 1997) and a number of other countries. It has led to public expressions of concern by government agencies and ministers. For instance, responding to a deterioration in safety over the previous year, Gianni Billia the president of INAIL (the Italian government agency responsible for compensating injured workers), stated that outsourcing was deleterious to workplace safety. He argued the lack of rules on outsourcing was encouraging a growth of ‘underground’ employment and there was outsourcing to smaller firms with more lax safety standards. Echoing this view, the Italian Minister for Labour, Cesare Salvi, declared the ‘regularisation’ of ‘clandestine’ labour was essential if workplace safety was to be improved (reported in eironline 28 February 2000). Changing work arrangements have also attracted attention in North America. They were the subject of a conference jointly organized by the National Institute for Occupational Safety and Health (NIOSH) and American Psychological Association (APA) in 1999 (and a major theme at an international conference on workplace injuries held in Toronto held in the same year). A major study into the health effects of downsizing in US Department of Energy was commissioned by NIOSH. As part of NORA (the future research agenda addressing organisational dimensions of OHS), in May 2002 NIOSH (2002a) issued a report, The Changing Organization of Work and the Safety of Health of Working People: Knowledge Gaps and Research Directions. This report (NIOSH 2002a: 1), the first of a longer term project, observed: Organisational practices have changed dramatically in this new economy. To compete more effectively, many large companies have restructured themselves by downsizing their workforce and outsourcing all but core functions. At the same time,
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nontraditional employment practices that depend on temporary workers and contract labour have grown steadily. Organisations are also adopting new and flatter management structures that result in the downward transfer of management responsibility and decentralized control, and they are implementing more flexible and lean production technologies such as just-in-time manufacturing… For many workers, these trends have resulted in a variety of potentially stressful or hazardous circumstances, such as reduced job stability and increased workload. Data suggest, for example, that the average work year for prime-age working couples has increased by nearly 700 hours in the last two decades… In reality, these revolutionary changes in the organisation of work have far outpaced our understanding of their implications for work life quality and safety and health on the job.
In Canada too, there is a growing interest in the issue. The issue of ‘atypical’ work arrangements received detailed attention as part of a general review of workers’ compensation undertaken in British Columbia in 1997. In Ontario, a number of research teams based at York University and the University of Toronto have received government funding to undertake research into the issue. In Quebec the institute for research on occupational health and safety (Institut de recherche en santé et sécurité du travail), which is the research arm of the Commission de la santé et de la sécurité du travail (C.S.S.T.) – the equivalent of WorkCover NSW - has organised a series of seminars on work organisation and changing forms of employment for the fall of 20002. A number of funded research projects are also proceeding in this area, involving researchers based at the University of Quebec and other institutions. Focusing specifically on the issue of research it should be noted that changing work arrangements have been a major theme in numerous international scientific conferences (such as a conference ‘Health Hazards and the New Working Life’ held in Stockholm in January 1999) over the past five years. It is also the central theme of an upcoming conference Work, Stress, and Health: New Challenges in a Changing World, the Fifth Interdisciplinary Conference on Occupational Stress & Health convened by the American Psychological Association, the National Institute for Occupational Safety and Health and the School of Business, Queen’s University, Canada to be held in Toronto in March 2003. The issue has also received prominent attention at conferences with a dual research and policy-making focus such as WorkCongress5 held in Adelaide in March 2001 and its successor WorkCongress6 to be held in Rome in June 2003. Concern extends to industry and professional groups. Over the past five or six years the subject of changing work arrangements has been a frequent topic if not key theme at industry and professional/practitioner OHS conferences, workshops and seminars including those run by particular industry associations (covering groups as diverse as bodies representing the mining industry and electricity suppliers). Subjects such as the management of contractors and temporary workers are also a regular topic on OHS practitioner email list-servers and discussion groups. Private providers of OHS management material including consultants, law firms and organisations like CCH have also devoted increasing attention to the issue (for example one conference provider ran dozens of one-day seminars on contractor safety in the late 1990s and changed work arrangements are a regular feature in CCH publications CCH, with CCH also issuing a specialized product manual on managing contractor safety).
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With regard to OHS-related professions, the challenges posed by changing work arrangements has, for example, featured in postgraduate training programs in occupational medicine and meetings of the Australian and New Zealand Society of Occupational Medicine. Unions too have shown a growing interest in the issue, making reference to it in their publications and also arranging guest speakers on the subject at union or partly union sponsored conferences. Most indicative of union concern has been the formation of a labour market change working group within the OHS committee of the Australian Council of Trade Unions (ACTU). It is important to establish the foregoing context. Given the scope and potential if not realised ramifications of the issues and problems raised in this report, it is essential that agencies such as WorkCover NSW establish an ongoing dialogue with government agencies in other Australian jurisdictions. It is equally critical to establish a dialogue with regulatory agencies and OHS research agencies internationally that are turning their attention to these issues. This report has already referred to a number of relevant bodies such NIOSH, EFILWC, the European Agency for Safety and Health, the NIWL and Finnish Institute for Occupational Health. Additional bodies include the Institut de recherche en santé et sécurité du travail), which is the research arm of the Commission de la santé et de la sécurité du travail (C.S.S.T.) in Quebec and the Institut de recherche sur les sociétés contemporaines (IRESCO) or l'Institut national de la santé et de la recherche médicale (INSERM) in France. Establishing a national and international dialogue will maximise the resources that can be brought to bear on these issues, expedite the disemination of existing knowledge and enable a productive exchange in relation to potential remedies. Research Methods To undertake this project a number of methods were employed. At the outset, a thorough review of the relevant research and regulatory literature was undertaken using computer search engines, library searches and contact with overseas and local scholars working in this or related fields. The review identified more than 160 (internationally) published studies that assessed the OHS effects of contingent work arrangements as well as other literature looking at regulatory issues, management responses and assessments of existing interventions. In addition to scientific research literature, we perused our existing collection of government reports and guidance material, employer and industry association documents and union material pertaining to OHS risks associated with contingent work arrangements, such as the use of contractors. This was supplemented by a number of web-based searches (a not insubstantial number of companies for example now put their OHSM documents, including contractor safety manuals, on the web). The project team attended meetings of almost every Industry Reference Group (IRG) established by WorkCover NSW, giving a short presentation on the nature of the project and holding discussions on the issues raised. This was very useful in providing some albeit crude indication of the extent of these changes within particular industries and industry sub-sectors and also identifying the diversity of experience that would need to be recognized in terms of shaping effective policy interventions whether they are regulatory or collaborative in nature. In addition, a number of persons from WorkCover, employers and unions provided material following this contact.
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In addition, we interviewed more than 120 individuals from government agencies, industry and unions across Australia using a semi-structured questionnaire (see appendix) designed to elicit their views on a range of issues relevant to the project. This interviewing process can largely be regarded as exploratory pilot research rather than testing specific hypotheses. Especially during jurisdictional visits interviews were often conducted in a group setting and took on the form of focus groups. By and large, this was the preference of agencies and it facilitated the maximum of staff with expertise or knowledge on particular issues in a relatively short period of time (interviews with agency staff from a particular agency typically took between three hours and a day). It should be noted in passing that several larger jurisdictions, notably Victoria and South Australia, have industry specific programs/stakeholder forums similar in aim if not structure to the Industrial Reference Group system and the Industry Workplace Health and Safety Committees in Queensland. Representatives of a number of these groups attended meetings in Victoria and South Australia (and the author of this report has some familiarity with the Queensland Industry Committees, having served on several for a number of years). Consistent with UNSW and WorkCover NSW ethics guidelines, all agency staff and others interviewed were informed that participation in the project was voluntary and they were asked to read and sign a participant information and consent form (see Appendices) that explained the nature of the project and asked them to indicate their willingness to participate (with a revocation of consent statement also attached). Finally, the project team requested written submissions/comments, documents (such as agency guidance material and correspondence) and relevant statistics from OHS agency staff during visits to jurisdictions, IRG meetings, interviews and in emailed information circulated by unions and employers. Structure of the Report The Report is divided into four parts. Part 1 examines the nature and extent of the problem. This forms a necessary context for evaluating both need for and likely effectiveness of particular interventions or remedies. Chapter 1 evaluates the evidence on the nature and extent of changing employment relationships. Chapter 2 then examines evidence on the OHS effects of particular employment relationships. For this, a review was undertaken of all research published internationally since 1966 along with statistical informational supplied by various WorkCover agencies. Chapter 3 considers the factors that might help explain why most of these employment relationships appear to be associated with an deterioration in OHS. Chapter 4 examines the adequacy of the current legal framework for preventing OHS problems in terms of the dealing with changed employment relationships. Chapter 5 provides a similar assessment of the regulatory framework in relation to workers’ compensation and rehabilitation. Finally, Chapter 6 examines the challenge that changing employment relationships pose for employers, workers, unions and other parties (like OHS professionals). It should be noted that in addition to making general observations and identifying areas where different types of employment arrangement pose similar problems the report also gives separate attention to specific forms of work arrangement including outsourcing/subcontracting, temporary employment, leased labour/labour hire and homebased and telework. This approach avoids problems of over-generalisation and provides more detailed insights into the issues surrounding particular work arrangements. Given the interrelationship of some employment arrangements a complete separation was neither
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possible nor desirable and several types have been grouped together. For example, while selfemployment might be treated as a separate category it overlaps with other categories such as subcontracting, some areas of home-based work and small business to such an extent that, for convenience (avoiding significant amounts of repetition and cross-referencing) it has been included in discussion of these categories. These groupings are used in subsequent parts of the report. Part 2 of the report is concerned to evaluate existing remedies as well as developing new preventative strategies in connection to the problems posed by changing employment relationships. Chapter 7 focuses on the regulatory initiatives, enforcementstrategies and collaborative ventures sponsored by OHS agencies. Chapters 8 and 9 examine voluntary employer/industry and union sponsored/endorsed initiatives respectively. Chapter 10 examines the issue of worker entitlements (though comments in connection to this are made in earlier chapters where appropriate). Part 3 of the report is concerned to evaluate existing remedies as well as developing new strategies in connection to the problems concerning workers’ compensation and rehabilitation posed by changing employment relationships. It follows the same general format as Part 3 with chapter 11 examining regulatory and enforcementinitiatives while Chapter 12 examines employer/industry initiatives, Chapter 13 union sponsored initiatives and Chapter 14 worker entitlements. Part 4 of the report examines regulatory collaboration (eg between OHS, workers’ compensation and industrial relations agencies) and other measures. The final chapter details the recommended strategic options for WorkCover in terms of better addressing the challenges posed by changing employment relationships. It should be noted that the while report seeks to identify the range of initiatives being undertaken it does not attempt to systematically compare activity across all the jurisdictions. Such a comparison was seen to serve no particular value and might be misleading given the different industry mix/workforce profiles, size and resources of various jurisdictions. Even a large/small jurisdiction comparison would have been misleading since the Australian Capital Territory has a very different industry mix to the Northern Territory and Tasmania (see ABS 2000:95-115). Further, such an approach would not have materially contributed to the overall objectives of the project, which were to examine current issues and remedies so as to determine where strategies might usefully be developed. Inter-jurisdictional comparisons would also have little meaning in terms of employer/industry and union initiatives (although noteworthy developments in particular jurisdictions are identified). At the same time, the report draws on the contributions from regulators, employers and unions from virtually every state and territory as well as national bodies. In producing the report examples have been drawn from all jurisdictions (though the jurisdiction is not always identified in order to protect the anonymity of informants) so the observations do not overly reflect the experience of a few jurisdictions. In the end, while some differences in experience were identified, the challenges posed by changing employment arrangements are impacting in very similar ways over the breadth of the country. As the report also is at pains to note, the Australian experience is essentially similar to those of other industrialized countries where information was obtained.
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Part 1: The Nature and Extent of the Problem
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Chapter 1 An Overview of Changing Employment Relationships 1.1 Introduction: Conceptual Issues Over the past decade there has been a growing public debate about changes to employment relationships within industrialized societies. In the main, this debate has been concerned with the growth of more flexible work arrangements, sometimes entailing more elaborate chains of commercial/work contracts (outsourcing/subcontracting), changes in legal employment status (from employee to self-employed, from direct hire to leased worker) and changes to the regulatory conditions under which work is performed (in terms of tax rates, minimum labour standards relating to hours and wages, workers’ compensation entitlements and responsibilities under OHS law). In an attempt to develop a shorthand phrase to describe these forms of employment two terms have been coined – neither entirely inclusive nor adequate for the task – namely contingent work and precarious employment. Contingent work (coined by Audrey Freeman in 1985 and widely used in North America. See Hipple, 2001) and precarious employment (French in origin but gaining international acceptance) are omnibus terms that have been used to describe very similar sets of employment arrangements. Central to both concepts is uncertainty about continuity of employment. Contingent work emphasises labour that is only performed when required while precarious employment emphasises the job and income insecurity inherent in many such arrangements. Typically included within both categorisations are casual, short-term contract or temporary (including leased) workers, subcontractors and franchisees, teleworkers, homebased workers, sole traders and owner-managers of micro small businesses, and the selfemployed. Contingent work and precarious employment refer to employment arrangements encompassed by two earlier terms: non-standard employment and atypical employment. The newer terms were, to some extent, a response to limitations with the earlier ones. For example, permanent full-time work was never standard or typical for many workers, especially women. Two potentially contentious categories of work encompassed by these earlier terms were shiftwork and part-time employment. While both could be regarded as contingent in terms of the timing of work, it may be hard to sustain an argument that all shiftworkers and all part-time workers are precariously employed. It is true that in countries, such as Australia and the USA, the majority of part-time workers are also employed on a short-term or casual basis. Similarly, although it is not widely recognised in the shiftwork literature, many working shifts in industries such as hospitality and retailing are also employed on a temporary, self-employed or subcontract basis. However, it might be argued that the defining condition used to classify these workers as contingent should be the limited duration of their work established by their casual, temporary, self-employed or subcontractor status, not whether they work part-time or on shifts. On the other hand, some would dispute even the partial exclusion of part-time workers from the concept of precarious employment. In her review of a draft of this report Lippel, for example, argued that the inclusion of part time work in the concept of precarious employment was not a misnomer in that the very survival of the worker is precarious when they depend on part time salary to support themselves. Lippel argued this was one reason why many part-time 36
workers also take on several jobs, and end up doing more than 35 hours a week but having status as part-time workers for several employers. They thus are ineligible for overtime and fail to obtain benefits otherwise available to full time workers doing the same number of hours for the same employer. In justifying this position Lippel cites the case of part time hospital workers (both permanent and unionised) working for several hospitals in Québec that have been refused the right to protective reassignment of pregnant workers because although cumulative exposure to radiation was at a dangerous level the courts insisted on evaluating exposure at each worksite independently (Lippel 1998). Another example cited by Lippel is the case of part-time workers working 2 12-hour days that have very different risk exposures (including the application of TLVs to hazardous substance exposure) to those working 5hours a day for 5 days. Reference could be made to other OHS risks that may affect part-time workers irrespective of the permanency of their employment. Examples include poorer access to training, limited participation in OHS decision-making, inexperience and split shifts. Whether these risks should be viewed as a consequence of contingency or other aspects of the employment of these workers remains unclear. Whether all or some part-time workers should be viewed as contingent or precarious is certain to be subject to further conceptual debate and empirical research. However, irrespective of this debate there are grounds for examining the OHS risks that may be associated with this type of work arrangement (quite apart from the overlap with casual/temporary employment). For this reason, part-time work (and multiple jobholding) do form part of the categories of work arrangement examined by this report. Leaving the foregoing debate to one side, it also needs to be recognised that contingent workers may occupy the extremes in terms of the number of hours worked, ranging from temporary workers employed only a few hours a week to groups of self-employed subcontractors whose hours are essentially unregulated and on average exceed those of employees undertaking similar tasks (for recent Canadian data on this see Delage, 2002). Having said this, there is also evidence in several countries that the proportion of noncontingent workers working long hours (ie over 50 hours per week) is growing due to changes in shift arrangements (such as the introduction of 12 hour shifts) and increasing levels of both paid and unpaid overtime. In the USA in 1998 one fifth of the workforce worked more than 50 hours per week (Golden and Jorgensen, 2001: 1). A study of US manufacturers by Hetrick (2000:30) found that during the economic expansion of the 1990s employers ‘were more likely to than in previous recoveries to increase overtime hours among existing employees than to hire new workers’. By the end of the 1990s workers were putting in 25% more overtime than a decade before although the figure dropped back from mid 2000 due to a cyclical slow-down in business activity (Golden and Jorgensen, 2001: 16). It is likely that the same applies in Australia where it was recently estimated that 2.6 million workers (29.6% of the labour force) work overtime on a regular basis (Dawson et al 2001: 9). In Australia the proportion of the full-time workforce working more than 49 hours per week rose from less than 20% in 1978 to more than 30% in 1997 (though note Dawson et al, 2001 put the figure at 28%). A similar trend can be identified in countries such as Finland and Denmark (Bohle and Quinlan, 2000: 83). The issue of long hours is attracting increased attention from policy makers. In 1999 the Finnish Ministry of Labour organised a conference on working time in Europe. At the conference a series of speakers referred to the ‘disintegration’ of the eight hour day/40 hour week in developed countries and how the market-driven approach had brought with a simultaneous return to long work weeks and growth of part-time jobs, especially in ‘Anglo-
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Saxon’ countries (eironline, 196/1999). In other words, what is occurring is a bifurcation of jobs in terms of working hours. This trend has been confirmed in Britain where a study by Green (2001) tracking changes since the early 1980s found the levelling off of average working hours after a long period of decline masked an increasing dispersion of hours, with working hours being concentrated into fewer households. Green (2001) also sought to measure the level of work intensity. He found work effort had intensified since 1981 (being most pronounced in manufacturing in the 1980s and the public sector in the 1990s) and that between 1986 and 1997 there had been 'substantial increases in the number of sources of pressure inducing hard work from employees'. The connection between long hours and contingent work requires further investigation (for a detailed examination of connections in Queensland see Bretherton et al 2001). Of the 2.3 million Australians working very long hours, Dawson et al (2001: 11) found 2.1 million (92%) were permanent employees and only 180,000 (or 8%) was casuals/temporary workers. The data does not include self-employed workers (or some home-based workers who are nominally employees), who are far more likely to work longer hours (Bretherton et al, 2001: v). Elaborate subcontracting chains and self-employment has been linked to long working hours in industries like clothing manufacture, road transport and construction (see Mayhew and Quinlan, 1997, 1998 and Quinlan, 2001) but these connections require closer investigation. Further, as Dawson et al (2001: 10) observe increases in working hours affecting nominally permanent workers may follow downsizing and cost-driven organisational restructuring. By and large, data sets on contingent or precarious employment have excluded shiftwork and some, such as those produced by the US Bureau of Labor, also exclude part-time work. The classification of part-time workers is problematic. Some researchers have simply differentiated part-time workers with permanency from those with less secure employment. While this appears to be a simple and logical step, as already noted there are potential OHS risks associated with part-time work that are not confined to casual or temporary part-timers. The inclusion of small business, or micro small business, as a contingent work arrangement, something usually not done by statistical agencies, is also problematic. Some researchers argue that there is little to differentiate sole independent contractors (own-account workers) from small firms with a working owner manager and five or fewer employees in a dependent subcontracting arrangement (for a discussion of the relationship between small business and categories of contingent work in terms of OHS see Walters, 2001: 94-97). It should also be noted that evidence in Australia, the USA and other countries indicate that the generic category of small business employs a more than proportionate share of part-time and temporary workers (Headd, 2000, Synthesis 1997: 17; Revesz and Lattimore, 1997). Further, there is a significant overlap between small business and ‘other’ categories of contingent work. For example, in Western Australia 63% of small businesses (ie those with less than 20 employees) operated either at home or from home (WorkSafe Western Australia, 2001a) and its seems reasonable to suggest the figure for micro small businesses would have been even higher. Thus, at the very least, small business needs to be recognised as a potentially relevant variable in a discussion of contingent work arrangements. Whether, some categories should be included under this heading is another matter. We raise these issues simply because, while problematic, they should not be ignored. Finally, in addition to the work arrangements just discussed there are a number of others that might be seen as essentially involving contingent workers. These include workers involved in
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group-training schemes, those in work-for-the-dole arrangements, voluntary workers (in areas like emergency services and homecare) and groups of illegal or semi-legal workers. Examples of the latter include illegal immigrants (referred to in some countries as workers lacking documentation), child workers and prostitutes. Available evidence indicates illegal workers are concentrated in contingent jobs (such as self-employment, casual labour and home-based work) and their legal status compounds their precariousness (for a more general discussion of the relationship between ethnicity and contingent work in the USA see Glasgow et al). Ultimately, neither the terms contingent work or precarious employment are entirely adequate labels for all the forms of work organisation they are usually intended to describe and ongoing attempts are being made to refine the concepts (Bourhis and Wils, 2001). We suspect resolution of some definitional ambiguities will hinge as much on empirical evidence as conceptual clarification. Moreover, there is also the issue of growing insecurity amongst workers in nominally permanent jobs due to organisational restructuring that entails reductions to staffing levels. These workers do not hold formally precarious jobs but their hold on such jobs has become more tenuous. It can be argued the nature of their employment relationship has changed. Measuring global changes in job security presents difficulties although the level of worker redundancy or displacement may be seen as an indirect indicator. Available evidence including annual industry specific displacement data compiled in the USA and less regular data sets collected in other countries suggest that involuntary job loss has become a widespread phenomenon, at least in the past decade if not before. For example, during the 1990s more than 500,000 workers lost their jobs in Sweden, equivalent to 20% of the workforce of 4.5 million (Swedish Council for Working Life and Social Research, 2002: 1). Unlike the USA, Australia does not collect regular detailed data on worker displacement. An ABS survey found that of the 9,339,200 persons aged 18 to 64 years who had held jobs in the three years to June 30 1997 685,400 (7.3%) had been retrenched or made redundant at least once in that period (cited in Kennedy, 2001: 8) and more recent data indicates a similar pattern. As already indicated, these figures do not capture the number of workers who retained their jobs in organisations that restructured/downsized and who now feel less secure. Nor does it include workers who moved voluntarily from jobs in organisations undergoing restructuring to escape a known or feared redundancy or who changed jobs in order to obtain a more secure position. In other words, there is a magnitude of both actual and perceived job insecurity that is well beyond that indicated in the number of formal retrenchments and redundancies. The Australian Workplace Industrial Relations Survey (AWIRS) conducted in 1995 provides some additional evidence on the extent of organisational change relevant to the last points as well as something of their effects. The survey of management revealed that 81% of all workplaces underwent at least one of four specified types of organisational change in the previous two years. This included 51% reporting a major change in workplace structure and 43% reporting a major change in the way non-managerial employees did their work (Moorehead et al, 1997: 19). The survey of employees revealed that these changes had profound effects on stress and job satisfaction, with 28% recording a high score on the work intensification index and 24% a moderate score (Moorehead et al, 1997: 19). To attempt and resolve all the issues just raised would require a report in its own right. For the purposes of this report we shall use contingent work and precarious employment in a broad sense whilst also examining part-time work and downsizing/job insecurity. In developing countries, the term informal work (or the informal sector/economy coined in the 1970s) has used to described the growth of workers in unregulated labour markets or at the fringes of
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other laws, including small 'backyard' factories, street vendors and home-based workers (see Loewenson, 1998 and Santanna et al, 1997). There is clearly some overlap between this and contingent work/precarious employment although the terms have different historical origins and are rooted in very different regulatory regimes pertaining to employment and OHS. Initially the informal sector was viewed as a stage of industrialization but its continued expansion (often to in excess of 50% of the workforce in these countries) over the past two decades has, along with the growth of precarious employment in industrialised countries, has caused a re-evaluation. Normally included within the notion of the informal economy (Loomis, 2002) is the traditional subsistence farming and craft sectors of developing countries along with informal enterprises (including micro-enterprises) and informal labour arrangements engaged in activities such as street selling, paid domestic service, fishing, recycling and some forms of industrial production (criminal activity and the reproductive economy are excluded). The workers engaged in these activities (which in areas like street selling often include many children) are either self-employed or work in enterprises that are not registered and for which there is no regulation of employment arrangements (in terms of rights and entitlements). In part the definition depends on the more restricted coverage of employment and welfare legislation in developing countries than industrialised countries where the bulk of precarious employment/contingent work still occurs within the formal sector of the economy (although for some workers in the latter regulatory protections may be more apparent than real once actual enforcement is considered). Hence, the terms informal work and precarious employment are not analogous although it seems reasonable to suggest informal sector workers are precariously employed (and some workers in the formal sector of developing countries would also fit into this category). Most discussions of precarious employment/contingent work fail to include paid informal work, some of which are illegal or part of the 'black economy', including those rooted in community networks. Research into genuinely informal paid work in industrialised countries is rare (for a recent British study of such work based in high and low income communities see Williams and Windebank, 2002). To avoid confusing an already complex picture the term informal work is not used in this report. For a number of reasons (avoiding over-generalisation and permitting more detailed evaluation of interventions/remedies in relation to particular work arrangements), discussion in the remainder of the report will focus on a number of specific work arrangements. These have been selected on the basis of their apparent significance in the current debate on OHS effects (including the views of those interviewed for this report). Since mutually exclusive categorization was impossible some overlap between the selected categories was unavoidable. However, given the degree of overlap between self-employment and many identified categories it is not given a separate category but included in the discussion of these categories (such as subcontracting, labour leasing, home-based work and small business). The selected categories identified for particular attention throughout the remainder of the Report are: o o o o o o o o
Outsourcing/subcontracting Home-based work, telework and telecall centres Labour hire/labour leasing Casual, temporary and itinerant workers Part-time work and multiple jobholding Downsizing/restructuring and job insecurity Small business Volunteers and other special category workers
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While using these categorizations adds a level of detail and complexity to the report it needs to be acknowledged that potentially significant differences can be found even within particular categories. For example, for OHS purposes it may useful to subdivide temporary workers into those who are casuals, those on short-term fixed contracts, on-call workers and seasonal workers. Leased labour, too, may be subdivided on a number of grounds, including the category of services entailed (supplementary labour, managed services, direct contractor arrangements and recruitment services) or the degree of formality in the labour leasing arrangement. We might also distinguish the self-employed subcontractor or home-based worker with highly specialized skills from those providing more routinised labour. Telecall centre workers have been grouped with home-based and teleworkers even though they (like some teleworkers) do not work at home and are engaged on a permanent, temporary or leased basis (even within the same firm). Even within the category of permanent part-time work there may be a significant difference between those working a few hours a week and persons working close to the hours of a full-time employee (say 30 hours a week). While illegal workers might warrant a separate heading the evidence is too fragmentary to do this in any meaningful fashion (except in relation to workers' compensation) so they are discussed under several other headings (notably home-based and more particularly temporary workers). The inclusion of volunteers may be seen as problematic as they are not normally considered as contingent workers. The number of volunteer workers in Australia is substantial (see below). Volunteers were included in the project because they were raised as an issue by both regulators and employers and the problems raised were analogous to some groups of contingent workers. It is also worth noting that charity and voluntary workers were included as part of the review of changing employment arrangements undertaken by the Health and Safety Commission in the United Kingdom (HSC, 2001: 7). Another problematic group is telecall centre workers. Whether telecall workers are contingent workers has been questioned but they have been included here because they are included in discussions of changing work arrangements, which is the focus of this project, and in any case available evidence (for Australia at least) indicates the majority work of under short term contracts. Finally, the grouping of particular categories of work arrangement under particular subheadings may be seen as arbitrary. To an extent this is true although it was also based on an effort to avoid repetition and to indicate work arrangements where combinations were important (such as part-time work and multiple jobholding) or where similar issues were raised. For example, there is an overlap in the issues raised in relation to home-based work, telework and telecall centres, on the one hand, and home-based work and homecare work on the other hand. With regard to the latter, it could be argued that home-based work is very different to homecare work because in the former work is undertaken in the worker’s own home and under their control. This is true although in practice the situation may not be so clear-cut as some clothing outworkers also work in the homes of other workers and their control of the home does not afford them the degree of protection from occupational violence that might be otherwise expected to differentiate them from homecare providers. In essence, they were grouped together for the purpose of this report because both work in a home setting distant from the ‘conventional’ workplace – which does raise similar issues in terms of OHS. At the same time, the issues that are specific to each are discussed separately so the grouping does not materially affect the content of the report.
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1.2 Evidence on Changing Employment Relationships in Australia and Other Industrialised Countries Debates over the conceptual clarity should not divert attention from the very substantial changes in work revealed by research on contingent work. Over the past 30 years, industrialised countries have experienced significant growth in contingent and insecure work arrangements. While much literature speaks of the last two decades as pivotal – and this is true in terms of the extent of the change - the origins of these changes can be traced to the 1970s (and were occasionally identified even then. See for example an early discussion of the emergence of temporary work agencies in Europe by Veldkamp and Raetsen, 1973). The precise mix of casual work, temporary and short-contract employment, leased labour, parttime work, home-based work, own-account self-employment, independent subcontracting and micro-small business employment has varied across countries (see for example Cordova 1986 cited in Vosko, 1997:46), although different statistical recording conventions also play a part here. For example, compared to the USA a greater proportion of the Canadian workforce is self-employed and this gap widened during the 1990s (Manser and Picot, 1999). However, notwithstanding some gaps in the data, especially in areas such as home-based work, the overall trend over the past 30 years in Western Europe, North America and Australasia is unquestionably that contingent work arrangements have grown substantially (Brewster et al., 1997; De Grip et al., 1997; US Bureau of Labor Statistics, 1995; Quinlan, 1998; Burgess and de Ruyter, 2000). Between 1973 and 1999 the proportion of the workforce in 21 OECD countries engaged in part-time jobs almost doubled, rising from an average of 8.15% to 15.8% (OECD, 2000: Table E). The average proportion of workforce holding temporary jobs in these countries showed a more modest increase from 9.48% to 11.15% between 1983 and 1994 (Quinlan and Mayhew, 1999:492). Statistical recording conventions in some countries (notably the USA) mean the latter figure almost certainly underestimates the change. It is also possible that the level of security bestowed on 'permanent' jobs by regulatory regimes in different countries affects the level of temporary employment. Even so, a very substantial increase in the number of workers aged 16 to 19 years holding temporary jobs was recorded (from 31.08% in 1983 to 42.25% in 1994). Relying on the Australian Bureau of Statistics and Eurostat, Campbell and Burgess (2001:173) compiled data on Australia and 14 European Union (EU) countries (excluding Austria) for 1983 to 1998. We have been able update these data to 1999 using unpublished OECD research. This evidence indicates that the average proportion of the workforce in temporary employment across 15 countries grew from 9.57% in 1983 to 13.75% in 1999, representing an overall increase of 43.68% in 16 years. In some EU countries, notably Belgium and Finland, there has been a rapid expansion of temporary employment in the last 5 years. The OECD (2001) holds unpublished data for several other countries indicating that Iceland (11.1% in 1999), Norway (10.12%), Switzerland (11.84%), Canada (12.09%) and Japan (11.91%) had levels of temporary employment roughly comparable to the EU and Australia average. The level of temporary employment was lower in two central European countries, Hungary (5.2%) and the Czech Republic (8.67%), but considerably higher in two developing countries, Mexico (21.1%) and Turkey (20.73%). From 1995 until 2002 the OECD failed to publish statistics on the extent of temporary work, apparently because of the unreliability/inconsistency of the data. Certainly, recording conventions affect the data and some but by no means all of these reflect differentiation on the
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basis of nationally specific regulatory regimes. For example, the separate employment standards applying to fixed-term contract work in a number of EU countries has been a factor in collecting data (in Australia such workers are, like casuals, denied access to unfair dismissal provisions under federal Workplace Relations Act 1996 but not the laws of some states). In Australia, on the other hand, fixed-term workers have been largely ignored by the ABS although a recent survey estimated at least 3.3% of employed persons held fixed term posts (Waite and Will, 2002: ix). In some countries like the USA, estimates almost certainly considerably understate the extent of such practices by missing large numbers of casual day labourers, illegal immigrants and those working for small labour agencies (for other points see Quinlan, 1998). However, as far as I am aware this has never been questioned. On the other hand, the OECD has accepted suggestions that the extent of temporary work in Australia is grossly overstated. The main basis for this appears to be a paper produced by staff of the Productivity Commission (Murtough and Waite, 2000. See also Murtough and Waite, 2000a) that claim to identify significant measurement problems associated with the ABS data. Adopting a number of different assumptions (including excluding those casuals working on an ongoing basis) they argued that actual level of casual employment in Australia is about half the ABS derived number. Their own analysis has, however, been the subject of a searching examination by Campbell and Burgess (2001a) who have published extensively on casual employment (and refereed publications including international journals). It is beyond the scope of this report to summarise the arguments (which is ongoing see Wooden 2001 and Campbell and Burgess, 2001b). However, Campbell and Burgess conclude by dismissing all the adjustments proposed by Murtough and Waite aside from the exclusion of ownermanagers in incorporated enterprises. The result of incorporating this exclusion is slight, reducing the shift in casual density from 18.9% to 1988 and 26.4% 1999 (according to the original ABS data) to a change from 18.2 to 25% (according to revised figure. Campbell and Burgess, 2001a: 24). As they point out, this still amounts to a major increase for the decade (reaching about double the casual density figure for 1982) and one that fully demands the attention of policy makers. It should be noted that, irrespective of what data source is used, there is a strong gender dimension to both part-time and temporary employment in Australia, with a proportionately greater number of women occupying these jobs than males despite the rapid growth male casual employment (see for example, ABS, 2001). An essentially similar though slightly less prominent pattern has been identified in the EU (see Markey et al, 2001). In Quebec women constitute the majority of part-time workers but not temporary workers (the latter is partly explainable by a substantial increase of 106% in male temporary employment between 1989 and 1994 while the number of female temporary employees actually declined by 28.4%. Desrochers, 2000). Desrochers also substantial gender differences within particular subcategories of temporary work, with women making up the majority of on-call or shortterm contract workers while males constituted the majority of seasonal workers. If health effects vary between different subcategories of temporary work (as research by Aronsson et al 2002 indicates – see next chapter) then the gender dimension to this needs to be recognised by policy makers. As noted elsewhere in this report significant gender differences are not confined to temporary employment but apply to other types of contingent work arrangement such as home-based work. Indeed, it has been suggested that gender has indirectly shaped interest in the subject. Vosko (2000) has argued that the substantial growth of temporary work and the erosion of job security amongst males played no small part in initiating a paradigm shift in terms of perspectives on precarious employment. In other words, prior to the development of large-
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scale temporary employment amongst males the fact that the majority of women had occupied these types of jobs for many years had evoked little interest on the part of researchers and policy makers. As far as we are aware, the OECD, ILO and similar agencies do not produce comparable data (published or unpublished) on the prevalence of other contingent work arrangements, including own-account self-employment, telework, home-based work or labour leasing. Compilation of these data would present considerable difficulties, as many countries do not collect the relevant evidence on a regular basis. Furthermore, even if they did, the problem of ensuring reasonable definitional consistency is likely to prove more challenging than in relation to temporary work. Some categories also present practical difficulties. For example, with regard to labour leasing there is the issue of distinguishing between employment agencies (who see their only task as job placement) and labour leasing firms as well as the need to recognise firms lease their workers out on an informal or occasional basis even though this is not their principal business (for a recent OHS case involving such a firm see WorkCover Authority of NSW (Inspector Legge) v Coffey Engineering Pty Ltd (no.2) [2001]). Having said all this, the evidence that does exist indicates significant growth. For example, a survey by the US Bureau of Labour Statistics (BLS, 1995a&b) found that the number of workers employed by firms supplying temporary help, and employing 20 or more workers, grew by 43% between 1989 and 1994 – a period when overall non-farm employment grew by only 5%. One labour-leasing firm, Manpower, now claims to be the largest single employer in the USA. Similarly, a recent report on temporary agency work in the European Union (Storrie, 2002: 1-2) pointed to its rapid growth, with an estimated 2 million (or 1.2% of the workforce) working in this sector by 1999. Few informed observers doubt the magnitude of some of these changes and it is an intriguing question as to why the issue has not received more attention from the OECD, governments and policy makers. As far as we are aware there is no comparable ABS data on the growth of labour leasing in Australia. The ABS Employment Services Survey of 1998-99 identified 278,937 persons on-hired by businesses as at the end of June 1999 and 1,357 firms mainly engaged in temporary/contract-based job placements (cited in NSW Labour Hire Task Force, 2001:18). However, long-term trend data is not available. Indications of significant growth can be found for specific jurisdictions. In one jurisdiction, South Australia, the WorkCover Corporation undertook a survey that indicated that the labour hire industry had grown by 550% (measured in terms of total remuneration rather than employment) in the decade after 1991. Remuneration figures, while not comparable to employment data, do provide a crude indication of the industry’s rapid expansion (for other references to growth see NSW Labour Hire Task Force, 2001: 15-31). Evidence with regard to the extent of home-based work is fragmentary but also indicates a pattern of growth in those countries for which data exists. In Canada, for example, the proportion of the workforce doing all or part of their work at home increased from 5.8% in 1991 to 9.1% in 1995. Excluding agriculture, the proportion of workers based entirely at home was highest in community services (22%), manufacturing (18%), personal services (14%), retail (11%) and finance, insurance and real estate (7%. See Lipsett and Reesor, 1997 cited in Bernstein et al, 2000:1). As this report as well as British and US research makes clear, there is strong gender dimension to home-based work in terms of occupation, industry, earnings and employment status with women being concentrated in more menial, repetitive and low paid tasks (Quinlan, 1998, ACIRRT 2002). In Australia an ABS survey undertaken in June 2000 indicated that there were almost one million home-based workers and while almost half (48%) were self-employed/operated a business from home it was also estimated that 20%
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of employed persons worked some hours from home (cited in ACIRRT, 2002: 6). It is worth noting in passing that a report on homework in Canada (Bernstein et al 2000:2) argues working at home was not a preferred way for women to balance work and family commitments (flexible hours and on-site childcare were favoured options). More often they worked at home because they had no choice. This observation is consistent with findings from a survey of clothing outworkers in Australia where a study by Cregan (2001) found 68% of those she surveyed would have preferred to work outside the home (see also Mayhew and Quinlan, 1999). Further, an ABS survey undertaken in June 2000 found that flexible working arrangements (nominated by 11% of respondents) and childcare or family considerations (nominated by only 4%) were not the major reasons for persons electing to do home-based work with others, such as the need to catch up on work (15%) being more important (cited in ACIRRT, 2002: 7). Evidence on the extent of call centre employment is sketchy. In 1999 it was estimated that call centres in Australia employed 160,000 workers and had an annual turnover of $6.5 billion (Call Centre Research cited in Australian Services Union, 2002: 4). A more recent estimate places total employment at 200,000 or about 2.2% of the workforce (cited in Queensland Division of Workplace Health and Safety 2002:5). This is somewhat higher than recent estimates for telecall centre employment in the UK but lower than a 1999 estimate of around 3% of the working population for the USA (HELA, 2001: 6-7 and Di Martino, 2001: 32). There is general agreement amongst industry, unions and regulators in Australia that the industry has expanded rapidly although there is no trend data to confirm this. A report commissioned by the Australian Services Union (2002: 4) stated there were approximately 4000 call centres in Australia, with 48% of these being located in Sydney and 28% in Melbourne. A survey of 658 union and non-union telecall centre workers undertaken as part of this report found that almost 75% of the survey sample were female and just over half those surveyed (51%) had been in their jobs less than three years. The survey found that 56% of respondents worked full-time, 16% were casuals, 15% worked part-time and 13% worked shift (the conflation of several categories of employment status is not explained in the report) but women were more likely to be employed part-time or casually (Australian Services Union, 2002: 8). Evidence on the extent of telework is, if anything, even sketchier though what evidence exists indicates that telework has expanded significantly over the past decade in many industrialised countries if not quite to the extent of some early projections (for a recent discussion of international evidence see Di Martino, 2001: 29-43). In the USA Labor Force 1997 statistics of 23.3 million working at home (21.5 million as their primary job) 60% used a computer and 35% a modem, giving rise to an rough estimate of between 6 and 10% of the workforce being home-based teleworkers. In Australia, the ABS has conducted a number of surveys since 1998 using two definitions, namely the ability to access the employer’s computer from home and a more narrow definition based on having a telework agreement with an employer (both ABS definitions are stricter than those used in a number of other countries). The proportion of the workforce that were teleworkers according to the first definition (access to employer’s computer from home) grew from 1.9% in February 1998 to 6.4% (or 544,000 persons) in November 1999. The proportion of the workforce meeting the narrower definition (telework agreement) grew from 1.6% to 4.8% (or 402,000) in the same period (cited in Di Martino, 2001: 33). Both figures indicate a significant rate of growth and this tends to be mirrored by data from other countries like Canada, Japan and the UK. A recent estimate for telework (which combined those that are home-based, mobile teleworkers, combined homebased/mobile teleworking and occasional teleworking) in EU indicated there were over 15
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million teleworkers or around 6% of the workforce. The EU workforce survey (Paoli and Merllie, 2001: 8) found that teleworkers accounted for 10% of self-employed workers and 4% of all employees. It is worth noting in passing that, contrary to the findings in relation to home-based workers surveys of teleworkers tend to indicate that they prefer to work at home (see, for example, Bouhris and Tremblay, 2001; Tremblay, 2001; and Montreuil and Lippel, in press). In relation to small business there are a number of relatively reliable data sets that indicate the extent of changes in employment shares. In Europe micro-small business (1-9 employees) accounted for 40% of all enterprises (Oliveira, 2001). Reviewing data for the European Union in the years 1993 to 1997 Walters (2001: 35-36) noted that small and micro enterprises (less than 50 employees) accounted for the highest growth in terms of the number of units as well as employees. Medium sized companies experienced both an absolute and relative decline in employment while the number of large firms increased but their overall share of total employment declined. In Australia, private sector small to medium sized firms (ie fewer than 100 employees) increased their share of total employment from 41.6% in 1983-84 to 46.6% in 1994-95 while small firms (with fewer than 20 employees) increased their share from 29 to 32.8% in the same period. These firms accounted for 53% of net new jobs during this period (Revesz and Lattimore, 1997: ix). In the same period, the total employment share of the public sector declined from 26.5% to 21.4%, indicative of budget cuts/downsizing, privatisation and increased outsourcing to the private sector. Available international data on self-employment presents a mixed picture with substantial growth being recorded in some countries (like the UK from the early 1980s through to 1997. HSC 2001a: 14) while in others the proportion of the workforce in self-employment underwent little change (Quinlan, 1998, Waite and Will, 2001: 19-21). In some western European countries growth in self-employment in non-agricultural sectors was offset by a decline of self-employment in agriculture. The proportion of the non-agricultural workforce that was self-employed averaged across the European Union plus Norway grew from 10.87% in 1980 to 12.54% in 2000 (eiro observer Update 4’02). In Australia, the level of selfemployment (including dependent contractors) underwent little change in the 1990s and represented 13.6% of the workforce as at September 2000 (ABS survey data cited in NOHSC 2002:2). By redistributing owner-managers of incorporated enterprise Waite and Will (2001: 23,32-33) find the proportion of workforce who were own-account workers increased from 9.7% in 1978 to 11.8% in 1998 and using another survey data set (FOES) they also detect a growth in self employment. Although self-employment is found in all industries in two (construction and agriculture, forestry and fishing) well over a third of the workforce was selfemployed and personal services the figure was close to 20%. Evidence on the extent of multiple-jobholding is patchy. In Australia the ABS has carried out surveys on an irregular basis although they do tend to indicate a growth over time, the most recent estimate being that 7% of the workforce hold a second job. As noted elsewhere, workers may hold several part-time jobs or hold a part-time job in addition to their full-time job (instances of workers trying to hold down two full-time jobs are not unknown). Harcourt and Kenna (1997 cited in Dawson et al 2001: 9) estimated that that 250,000 Australian workers (2.8% of the labour force) work full-time and have second job. The combination of a full-time job and a second job is sometimes referred to as moonlighting. The practice of moonlighting appears to be more widespread in the USA where approximately 6% of employed males surveyed in 1993 reported having a second job (Mishel and Bernstein, 1995 cited in Kimmel and Smith Conway, 2001: 89). A study by Kimmel and Smith Conway
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(2001) found that the typical moonlighter was somewhat poorer than the average worker and the desire to supplement low pay was the primary incentive for taking a second job. Evidence on the number and use of illegal workers is, as might be expected, very fragmentary though a substantial growth of illegal immigrants (many of whom appear to work in 'legal' jobs [ie not criminal activity) has been reported in Europe, North America and (to a lesser extent) Australia. Like other less socially attractive forms of flexible work, illegal workers have been conspicuously ignored in the prognostications of the OECD and WTO. Recent Immigration Department estimates are that there were around 60,103 illegal immigrants in Australia as at June 30 2001 (and increase from around 58,000 the previous year) but this figure may be an under-estimate as it is only based on persons overstaying their visa and takes no account of other illegal arrivals. Nonetheless, the figure appears small compared to estimates of more than five million illegal immigrants in the European Union and US State Department estimate 300,000 illegal movements from Mexico alone into the USA each year and eight million undocumented workers. The Australian data just cited doesn’t include the well over 200,000 backpacker tourists that visit Australia every year, almost all of whom take on take on casual and seasonal work to supplement their income even though only a minority actually obtain work permits (for sources and a more detailed discussion see chapter 4). Nor does this figure include foreign workers brought to Australia on special short-term work visas - workers who recent reports indicate (such as that involving Indian stonemasons employed in building a temple south of Sydney) may be susceptible to exploitative and illegal employment practices. Another group of often-illegal workers, typically engaged in contingent jobs (in retailing, hospitality, personal services, manufacturing and delivery), are children. Comparatively little is known about the extent of child labour. Historically, child labour was associated with home-based work (as adult workers in garment making and the like sought to supplement meagre incomes. Quinlan et al 2001a) where its social/regulatory invisibility meant it could survive long after the banning of children from mines and factories. With the renewed growth of home-based work (including its re-emergence in areas like clothing manufacture) has come evidence of a re-emergence of child labour. For example, evidence on child workers as young as seven years of age was presented both to the inquiry into workplace safety by the NSW Legislative Council Standing Committee on Law and Justice (1998) and Senate Inquiry into the garment industry (SERC, 1996 and 1998). While home-based work represents a shadowland where exploitation and child labour can flourish, it is by no means the only area where contemporary instances of child labour can be found. An example is the use of children, predominantly as part of casually employed immigrant family groups of farmworkers (mainly working on crops) in the southern USA. In 1998 the Department of Labor estimated that 129,000 14-17 year olds were working on crops, while a Bureau of Census Survey suggested the figure might be as high as 290,000 (cited in PAHO, 1998). Both figures exclude children younger than 14 years although a recent report by the United States General Accounting Office (2000: 6) found clear evidence of children as young as 6 years being employed. Overall, in 1998 there were estimated to be four million child workers in the USA (PAHO, 1998), some in extremely dangerous jobs despite regulatory restrictions because the latter often go un-enforced. Trying to tease out the precise number employed illegally is difficult. Using the Current Population Survey, 1995-97 data, Kruse and Mahony (2000) estimated that 154,000 minors were employed illegally in any week and 301,000 in a year (were predominately white males and received on average $1.38 per hours less than legally employed young workers), a decline from the 1970s. However, the more recent reports on child employment (including amongst immigrant agricultural workers) just mentioned
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indicate this may underestimate the extent of illegal child employment. There appears to have been no comparable attempt to estimate the extent and pattern child labour in Australia (the ABS does not collect employment data on persons aged less than 15 years), let alone identify those in high-risk jobs. Knowledge of the extent of voluntary work is based on irregular survey evidence. Nonetheless, the available evidence indicates it is substantial. A survey undertaken by the ABS (1995) identified 2.64 million Australians (19% of the population aged 15 years or more) who contributed some form of voluntary work for an organisation or group. The major areas of voluntary work were sport/recreation (31.4% of respondents), welfare community (29.7%), education/training/youth activities (25.3%) and religious organisations (17.7%). One third of volunteers worked for more than one organisation. Leaving measurement issues and data problems aside, figures combining available data on several basic categories of contingent work in particular countries illustrate the magnitude of change. In Australia, those holding a casual or temporary job and non-employees (selfemployed, subcontractors, etc) constituted less than 30% of the workforce in 1982 but approximately 40% in 1999 (Burgess and de Ruyter, 2000:252). If permanent part-time workers are added, the figure rises to 48%. Similar significant shifts have been identified in other countries in the European Union, Canada (see Lowe, 2001) and the USA (where around 30% of the workforce hold part-time, temporary, on-call, day hire or short term contract positions or are self-employed. Hipple, 2001). 1.3 Changing Work Arrangements at Industry/Sector Level in Australia In general available statistics make it difficult to provide an accurate picture of how the aggregate changes identified in the previous subsection are affecting particular industries or industry sub-sectors. However, some general observations can be made. First, contingent work arrangements are a long-term rather than recent feature of some industries, such as extensive use of self-employer subcontractors in long-haul road transport and the building and construction industry, the use of home-based outworkers in the clothing industry or the use of casual/temporary workers in retailing. Nonetheless, available evidence indicates that the extent of such practices has grown even in a number of these industries over the past 10-20 years (see for example, Mayhew and Quinlan, 1999 and Quinlan, 2001). Second, in other industries the extensive use of contingent work arrangements is more recent although the ‘take off’ point varies. For some industry sub-sectors, like the fast food (the largest single employer of young workers, especially teenagers, in Australia), use of temporary workers began early (ie in the 1970s) and indeed, at least in terms of large operators (including multinationals), formed the predominant workforce upon which the industry grew. In other industry sub-sectors, like healthcare the move to making more use of contractors, temporary and leased workers appears more recent. Third, both the overall level and use of different categories of flexible work arrangements will vary considerably between different industries and sub-sectors. For example, part-timers account for around half the workforce in accommodation, cafes and restaurants (WorkSafe Western Australia. 2001a). Even within a particular work category, such as casual/temporary workers, there may be differences in the pattern of usage. For example, some industries like manufacturing employ relatively more casuals on an ongoing basis than industries like
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retailing where casual employment is far more likely to be short term (Murtough and Waite, 2000a: 26). There are also gender and age differences in the duration of temporary employment (Murtough and Waite, 2000a: 19). Patterns also vary even within industry subsectors. In the period 1993 to 1998 the overall level of part-time employment grew almost twice as fast as full-time employment for the healthcare sector as a whole (ie 14% compared to 7.2%). However, in hospitals and nursing homes part-time employment constituted the vast majority of a smaller workforce growth (ie 7.2% compared to an 0.9% increase in fulltime jobs. Tannous, 2002:50-51). It is impossible to categorically state that the level of contingent work is growing in all industries. However, this was the clear impression gained during meetings with almost all Industry Reference Groups along with interviews conducted in the course of the project. Indeed, a number of persons interviewed made reference to specific areas or provided evidence of growth in areas of activity where the trend was entirely unknown to us. The factors driving increased use of contingent workers may vary between industries, although cost and flexibility considerations appear influential in many. There may be exceptional factors. For example, it is likely that the increased use of temporary and leased workers in healthcare has been, in part, a response to the shortage of nurses. In other words, hospitals have used agency staff to fill gaps and meet the problems posed by under-staffing, absence and increased labour turnover/instability. Even within this sub-sector the relative influence of cost pressures on decisions to use of contractors and contingent worker is liable to vary significantly between, for example, nursing homes and hospitals. Used of leased labour was not really an option for correctional services although high levels of labour turnover made obtaining adequate labour difficult. Fourth, differences in industry mix amongst the jurisdictions probably explain some differences in the overall proportion of different categories of contingent work. For example, the importance of the hospitality/tourism industry in Queensland probably help to explain why this state has a level of casual/temporary employment in excess of the national average and why on the other hand in the Australian Capital Territory the level of casual employment (at 18%) is below the national average (see ABS 2000:103). Other inter-jurisdictional differences can be identified. For example, in August 1998 self-employed contractors constituted 10.1% of total employment in Australia but were a more significant part of the workforce in NSW and Western Australia. Western Australia accounted for 11.2% of selfemployed contractors despite having only 9.8% of the national workforce (WorkSafe Western Australia, 2001a). Fixed-term contract jobs appear to far more common in New South Wales, Victoria, Queensland and Western Australia than the other states and territories (Waite and Will, 2002: 21). Overall, while inter-jurisdictional differences exist and are of some importance, the transformation of working arrangements across Australia has been relatively uniform. At the same time, a detailed breakdown of work arrangements at state level (benchmarked against other states and Australia more generally), like that recently undertaken for the Queensland Department of Industrial Relations (Bretherton et al 2001), would have value for WorkCover NSW and other agencies in terms of identifying sectors and issues warranting closer investigation or targeting.
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Chapter 2 Evidence of the Occupational Health and Safety Effects of Changing Employment Relationships Introduction: A review of existing research Having identified the changes in work arrangements that have occurred in Australia (and other industrialized societies) over the past two decades it is important to look at the evidence as to the effect of these changes on occupational health and safety and workers’ compensation. Assessing this evidence, including identifying the underlying causes of or reasons for these effects, is a necessary first step before turning to the question of developing strategies to address these issues. It provides evidence on those areas or work arrangements that are most problematic and should be prioritized in terms of interventions (including initiatives by industry etc) and also those areas that require little attention. Understanding underlying causes or risks factors is critical to the development of effective interventions. Finally, this evidence provides a basis for evaluating existing or proposed interventions in terms of their likely success. As noted earlier this project has focused on the OHS and workers’ compensation effects of what has been increasingly termed contingent work or precarious employment. In the main, this report has not considered the issue of changing working hours except where they are connected to these work arrangements. The health and safety effects of changing shiftarrangement/working hours has been the subject of a large body of research and increasing debate amongst regulators, employers and unions. To try and address this area in a meaningful way would have detracted from the capacity to examine other issues which the project specifications and the attitudes of those spoken to were deemed more central. Before proceeding to examine the OHS and workers’ compensation effects of contingent work arrangements, a few general observations of the more general issue of working hours can be made. A body of research has indicated that changes to shift arrangements can have adverse effects on health. For example, a recent Japanese study of cleanroom workers (Yamada et al, 2001:318-26) found moving from an 8-hour to 12-hour shift caused marked psychological fatigue and unhealthy weight gain amongst some workers. Another recent study (Liu and Tanaka, 2002: 447-51) has linked overtime work and insufficient sleep to an increased risk of myocardial infarction amongst Japanese men. Long hours of work have also been linked to a series of other OHS effects. These include reduced sleep, fatigue, increased risk of injuries/poor safety (such as an elevated risk of disasters), reduced social time/adverse family/work balances and drug use. To this may be added gastrointestinal disorders, psychological stress and pregnancy problems (for a recent Queensland government commissioned review of research in these areas see Dawson et al, 2001). Unfortunately, as noted elsewhere in this report, most of the very considerable body of shiftwork/working hours research conspicuously ignores the large number of contingent workers engaged in some form of shift arrangement.
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Another report commissioned by the Queensland government as part of its industrial relations reform process examined the effects of long hours on family and community life (Pocock, 2001). Pocock (2001) pointed to growing body of evidence that long working hours have a series of adverse effects on children (there are no shortcuts to have ‘quality’ time with children, both mothers and fathers need to be present and children don’t like stressed and tired parents), couple relationships (especially where children are present) and social capital (including children’s educational performance). Pocock’s report does not isolate contingent work arrangements for special consideration. It is frequently proposed that flexible work arrangements are more family-friendly. However, the present project uncovered evidence that this argument simply doesn’t hold for some work situations (such as clothing outworkers because the hours of work while ‘flexible’ are long and combining work and childcare at home is not necessarily an easy task) and may, at best, only apply selectively in others. A similar finding has been made by a number of studies of telework, where the presence of children while work is being undertaken is reported as a considerable source of stress (bouhris and Tremblay, 2001 and Tremblay 2001). There is also some research linking long hours to contingent work and OHS problems. For example, there is evidence of an association between multi-tiered subcontracting, long hours, fatigue and unsafe work practices in long haul road transport and construction (Quinlan, 2001 and Mayhew and Quinlan, 1997). The recent inquiry into safety long haul trucking received both submissions and survey evidence indicating intense competition was promoting cost cutting via multi-tiered subcontracting (to evade minimum wage rates paid to employeedrivers). This was inducing owner/drivers to undertake more trips in a given period to offset declining freight rates, and in turn, this was placing more pressure on those using employee drivers leading to further substitution of owner/drivers, award evasion and increased use of trip-based payment. The resulting long hours and intense competition were seen to have serious health and safety effects (Quinlan, 2001). Researchers have also identified an association between job insecurity arising from downsizing and the like and presenteeism, or the practice of workers putting in longer hours or working whilst sick (see for example Aronsson et al 2000 and Simpson, 2000). Similarly, a Quebec study found that teleworkers would work while ill (failing to declare work-related illnesses or even stopping when they have health problems not related to work) for fear that taking time off would jeopardize the possibility of continuing to work from home (Montreuil & Lippel in Press, Tremblay 2001, Bourhis & Tremblay 2001). In a number of countries, such as Sweden, research is currently being undertaken on the physiological and psychological effects (including family and other relationships) and long hours, which might also draw important connections with the demands of some contingent work arrangements. These connections all require more systematic investigation before meaningful generalisations can be made about the connection between contingent work, long hours and OHS. Leaving the long hours issue to one side, it should be noted that there is now a substantial and growing body of evidence indicating that some types of contingent work arrangement are associated with a significant deterioration in worker safety, health and wellbeing. It is worth summarising this evidence. As part of an ongoing process of collecting evidence on the relationship between precarious employment and OHS/workers’ compensation, an extensive review of the published scientific research literature has been undertaken. From this review a database has been constructed that
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now includes more than 150 studies published internationally (most but not exclusively in English) between 1966 and 2002. The database summarising the nature, methods and findings of each study (listed alphabetically by first author) is reproduced in tabular form as an appendix to this report. At various points I (together with several colleagues) have analysed the studies and published results of these reviews in international academic journals and books as well as the World Health Organisation’s Global Occupational Health Network Newsletter (Quinlan et al 2001a&b, Bohle et al, 2001, Quinlan 2001/2002, Quinlan and Bohle, forthcoming). The following discussion is based on examination of current database although it should be noted these results differ in no substantial way from earlier published based on a smaller number of studies. In other words, while the body of published research is growing rapidly this accumulation of evidence is largely reinforcing the findings or earlier work. One review (Quinlan and Bohle, forthcoming) focused on safety (ie excluding health effects) but again the pattern of result revealed no significant differences from reviews of both health and safety. Rather than report the findings for all these reviews we have analysed the results for the 159 studies published between 1966 and 2002 currently in the database. Given the diversity of hypotheses tested and methods used it was appropriate to conduct a narrative review rather than a meta review. We have also made no attempt to rate studies by quality although it should be noted that the vast majority are published in peer-reviewed and internationally respected scientific/academic journals. A number of studies were part of internationally renowned projects such as the Whitehall 11 study in the UK that has been undertaken for over a decade and involves more than 10,000 civil servants. The 159 studies were undertaken in 21 individual countries (plus the European Union) headed by the USA (50 studies), UK (20 studies), Australia (18 studies), Sweden (18 studies), France (12 studies), Canada (10 studies) Finland (9 studies), Germany (4 studies), Brazil and Denmark (both 3 studies) Norway and South Africa (all 2 studies) and Belgium, Ireland, Spain, Poland, China, Egypt, Japan, Switzerland and Zimbabwe (all 1 study each). The studies used a variety of research methods, including secondary data analysis, longitudinal and quasi-experimental designs, cross-sectional surveys and qualitative case studies. Of the studies, 34 relied on secondary data analysis (like official injury or workers’ compensation records), 51 studies used longitudinal methods, 61 relied on cross-sectional surveys, there were 9 qualitative case studies and seven studies used some other method. The studies also employed a range of objective and subjective OHS indices, including blood pressure, cardiovascular disease, sickness-related absence, injury rates, occupational violence, psychological distress, and knowledge of OHS and legal responsibilities and entitlements. Grouping these indices under five broad headings, it can noted that 49 studies used objective measures (such as injury records, diagnostic records and the like), 85 studies used subjective measures (like self-reported injuries, health or distress), 16 studies used sickness absence records, 12 measured legal knowledge (of workers, subcontractors etc) and eight studies assessed compliance with organizational policies and training. Since a number of studies used multiple measures the total exceeds 159. Several studies were based on general population samples but the overwhelming majority of studies were industry or occupation-specific. Of the industry-specific studies 37 examined manufacturing followed by healthcare (22 studies), the public sector (16 studies), transport (9 studies), construction (8 studies), financial/administrative/personal services and education (8 studies), retail/hospitality (6 studies), post/telecommunication and the media (5 studies),
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mining/oil (4 studies), power generation (2 studies) and maritime/fishing (1 study). Arguably, this represents a broad and arguably representative range of industry sectors, with the exception of some parts of the service sector such as retailing, hospitality and transport. Eighteen of the studies were deemed indeterminate, mainly because they lacked a baseline, benchmark or control group. Indeed, the preponderance of contingent workers in some domains, such as the fast food industry, and the volatility and transience often associated with contingent work arrangements can present serious methodological problems for researchers. Notwithstanding this, analysis of the remaining studies revealed a pattern of results that was remarkably consistent, irrespective of the research methods or OHS indices used. Of the 141 studies in which an effect could be measured, 131 (over 90%) indicated that contingent work arrangements were associated with inferior OHS outcomes such as higher injury rates, blood pressure or psychological strain. The studies were divided into six categories of contingent work, namely organizational restructuring and job insecurity, outsourcing and home-based work, temporary and casual work, small business and part-time work. Some double counting was unavoidable as several studies dealt with two or more categories simultaneously. Ironically perhaps, double counting was most pronounced amongst the studies considered indeterminate. Of 33 studies of outsourcing, 24 found adverse OHS outcomes, one reported nil/positive outcomes and the remaining 8 were indeterminate. Of 33 studies of temporary workers, 19 found an adverse effect, four were nil/positive and 10 were indeterminate. Of 85 studies of downsizing and job insecurity, 77 identified adverse OHS outcomes while five found a nil or positive association and three were indeterminate. Of 17 studies of small business, eight found adverse effects, one was nil/positive and eight were indeterminate. Of seven studies of part-time workers, mostly undertaken in the health care sector, one found a negative effect and the remaining six found either a nil or positive association with OHS indicators. Of five studies of telework/telecall centre workers one found an adverse effect and the remaining four were indeterminate. In sum, the studies within particular categories of contingent work mirrored the overall result except for the small number of studies of part-time workers. The location of the study, the methodology and the indices used appeared to have no discernible affect on the findings. Several studies examined informal work in developing countries (see for example Santana et al, 1997 and Loewenson, 1998). As already noted, informal work incorporates workers without a formal labour contract (and who may be self-employed or casual employees) with examples including street vendors and women doing paid domestic labour. The concept of informal work clearly overlaps with that of precarious employment and the results of these studies were similar to those dealing with contingent workers in industrialized countries (though perhaps more extreme due to very low rewards, disorganization and an absence of regulatory protection). In sum, part-time work was the only area where an admittedly small body of studies indicated that health indices were superior to those of full-time permanent workers. This result must be treated with some caution given the small number of studies and the fact that most only measured health indices not safety where rather different outcomes are plausible (indeed, for some recent UK evidence attesting to this in relation to injury rates see HSE, 2001). It also worth observing that a number of these studies were of conducted in the health sector (where part-time workers like nurses may have a degree of bargaining power to determine their working arrangements that is by no means typical). At the same time, a less predictable set of results is precisely what might be expected in relation to part-time workers if, as some would
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suggest, not all these workers can be regarded as precariously employed. For some groups at least, part-time status may not entail a loss of job security and shorter hours may permit more effective balancing of work and non-work activities. These issues require further investigation. Separating those studies that focused on safety outcomes from those using health indices had no appreciable effect on the findings. In any case such a separation is a somewhat arbitrary process because precariousness may affect both safety and health and these outcomes may themselves interact in complex ways. For example, pronounced levels of psychological distress associated with job insecurity may be conducive to occupational violence that takes the form of harassment/threatening behaviour as well as physical assaults. Equally, fatigue induced by the long hours worked by some contingent workers (such self-employed long haul truck drivers) may lead to an increased risk of injury as well as long-term illness, and the resulting illness may then affect the capacity to work safely. The use of drug stimulants to combat fatigue by long haul truck drivers provides an illustration of these interactions, with both short and long term direct effects on health and safety as well as indirect effects via the impact of drug use on family relationships (Quinlan, 2001). There is also evidence of a more general association between precarious employment and both ill health and injury (including chronic injuries). In their analysis of the second EU workforce survey conducted by the European Foundation for the Improvement of Living and Working Conditions (EFILWC) involving 1,000 workers from each of 15 EU countries, Benavides et al (2000) found fatigue, backache and muscular pain were positively associated with precarious employment. In 2000 the EFILWC undertaken a third survey (entailing 1500 workers for each of 15 member countries apart from tiny Luxembourg where the sample size was 500) and comparing the results to those the first survey in 1990 found further evidence of a link between contingent work and poorer OHS as well as confirming the view that there had been an overall decline in working conditions in the EU over the course of the decade (EFILWC, 2001). For example, it was found that more than 50% of temporary workers reported working in uncomfortable postures compared to 46% of fixed term contract workers and 45% of permanent workers. Similarly, 35% of temporary workers reported they suffered from noise exposure compared to 27% of those on fixed term contracts and 30% on permanent contracts. While these differences may not appear substantial the large sample size means that they should not be seen as insignificant. In sum, there is now a rapidly expanding body of research indicating that, with the exception of part-time employment, contingent work has negative effects on worker health, wellbeing and safety. While we did not confine our review to the most methodologically strong studies, it is very unlikely that doing so would have materially affected the conclusions drawn. Certainly, neither the methodology nor the OHS indices used had a systematic effect on the direction of the findings. Gaps in existing research Our reviews did identify several gaps in the existing literature. Apart from healthcare and the public sector, there were comparatively few studies of services sector workers, including areas like retailing, transport and hospitality where contingent work arrangements are widespread if not pervasive. The media is another conspicuous omission (despite the increasing use of freelance arrangements and the potential safety risks this may pose given both their isolation and the dangerous situations where journalists may be required to work.
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See International Federation of Journalists, 2002). Professor Gunnar Aronsson at the National Institute of Working Life in Stockholm is currently undertaking a large project examining media workers. However more research is needed here. There is also the question as to whether changing work arrangements pose commensurately greater problems in high-risk industries of activities (see NIOSH, 2002a: 18) that may necessitate more stringent regulatory controls. Later parts of this report will address this issue. Most studies of downsizing and job insecurity have focused on disease, hazard exposures or wellbeing, rather than injury, while the opposite bias emerged in studies of outsourcing, home-based work, small business and temporary work. Yet it is entirely plausible that downsizing may also lead to an increased risk of injury due to staff shortages/rushing, prioritizing production over OHS/corner cutting on safety, changes to work processes/organisation, the loss of experienced personnel or a failure to provide appropriate OHS training after implementing multi-tasking. In the USA studies in the healthcare industry have linked understaffing (due to downsizing) to epidemic staphylococcal infection and increases in catheter-related bloodstream infections, both marked by a high case fatality rate (Haley and Bregman, 1982; Fridkin et al 1996; and Farr, 1996). While the victims of these outbreaks were patients, healthcare workers are not immune to threats of infection and the rushing/short-cuts in work-practices like those described in these studies could easily expose healthcare workers themselves to risk, most obviously with regard to needle-sticks. Unfortunately, we are aware of no studies testing whether there is an association between high-risk behaviour or needlestick injuries amongst healthcare workers and under-staffing due to downsizing. Similarly, the growing use of home-visit healthcare services, may, by removing work from supervised and organised settings, also increase risks of needle-stick and other injuries but again this is yet to be explored. In the course of this project, employer representatives in a number of industries expressed the view that they believed safety indices had deteriorated following downsizing in a number of organisations with which they were familiar and a similar point was made by a senior officer with the workers’ compensation agency of one jurisdiction. There was recognition of a reporting effect whereby workers faced with redundancy were more likely to make workers’ compensation claims. However, for most this was not seen as more than a partial explanation of the increase in injury and claims following downsizing. In some instances there appear to be both direct and indirect effects on health, safety and wellbeing that can only be detected where multiple measures are used. There have been very few studies of teleworkers or permanent part-time, call centre, and leased workers, in relation to safety or health. With regard to leased labour/agency workers a recent report on temporary agency work prepared for the European Foundation for the Improvement of Living and Working Conditions (Storrie, 2002: 51) reviewed the evidence pertaining to a number of EU countries (most of it independent of the studies cited as part of the review undertaken for this project). For several countries, such as the UK and the Netherlands, the evidence suggested some differences between the injury experiences of agency workers and other workers but these were not especially pronounced. On the other hand, a comparison of agency workers with all other workers in Belgium (based on 1998/99 data) found that manual agency workers experienced more frequent and more serious workrelated injuries and the same applied to white-collar agency workers although the gap was far less pronounced. Referring to France, Storrie (2002: 51) observed:
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In France, over half of temporary agency workers are exposed to manual handling of weights, compared to 41% of workers on limited duration contracts and 37% on
open-ended contracts. 38% of agency workers are exposed to this for over 20 hours per week, compared with 21% for limited duration contracts and 18% for open-ended contracts. Only 57% of agency workers have a regular work rhythm compared with 68% of those on fixed-term contracts in the private sector and 72% of other private sector employees. Moreover, figures show that temporary agency workers suffer more occupational accidents than workers in general. The index of the rate of accidents among temporary placement workers in 1994 was 610, compared with 364 for workers on fixed term contracts and 194 for workers as a whole. Finally, an INSEE employment survey for 1998-1999 confirms these results and shows that temporary agency workers have poorer working conditions than any other workers. The French national report is aware that the statistical association may be due to specific features of agency work or to other characteristics of the job and workers, and concludes that both factors contribute. Storrie (2002: 51-2) noted that in most other EU countries there was no comparable data although in several (Portugal and Italy) interviews with inspectors identified problems in this sector. One of the few benchmarked studies of telecall centre workers of which we are aware (Norman et al 2001) examined workers providing advice with computer problems at a large, relatively new and purpose built telecall centre in central Sweden and compared this against workers undertaking the same tasks in more conventional settings. The mean age of the telecall centre workers was 26 years and they had been in the industry an average of two years while their non-centre counterparts had a mean age of 42 years and had been in the industry an average of 17 years. The study found that on some health indicators the telecall centre workers scored worse than their older non-telecall centre counterparts. Given age disparities and the fact that this arguably represented the upper-echelon of telecall centre work (in comparison to say workers employed on simple telemarketing activities), this was a finding that would be extremely disturbing if replicated in further studies. There are also relatively few benchmarked studies on the incidence of bullying and occupational violence amongst contingent workers. A large labour force survey undertaken in Finland in 1998 (Paananen and Votkola, 2000: 101) found the risk of being subjected to occupational violence was: ..greater for fixed-term or part-time employees than for permanent ones. This may partly be due to the general riskiness of the occupations in which the numbers of fixed-term or part-time employees are usually the greatest, such as social welfare, restaurant and sales occupations. The reason may also lie in the job tasks and in lack of experience in dealing with difficult patients or customers.
Another recent survey of workplace bullying undertaken by the Irish Task Force on the Prevention of Workplace Bullying (2001) also suggests there are problems warranting further research and remedial action. Based on telephone interviews with 5,252 workers (a 55% response rate), the survey found that around 7% of respondents reported being bullied at work (the study used a definition that relied on repeated and sustained behaviour rather than isolated incidents). The study found that employees were more likely to report being bullied (8.8% of those surveyed) than self-employed workers (8.2%), Women (9.9%) were more likely to experience bullying than men (6.4%) and, surprisingly perhaps, bullying was more 56
common in the public sector than the private sector. Turning to the issue of employment status the survey found that bullying was least pronounced amongst permanent workers (6.7%), more pronounced amongst temporary/contract workers (9.2%) and most pronounced amongst casual workers (10.2%). The association between job tenure and bullying was especially clear for males (where the figures were 4.9 for permanent workers, 7.9 for temporary/contract workers and 15.3% for casuals) but rather more mixed with regard to females (9.6, 10.3 and 6.3% respectively). Workers holding more than three or more jobs in the past three years were also far more likely to report bullying (9.8%) than those who had only held one job (5.9%. Task Force on the Prevention of Workplace Bullying, 2001: 32). There was a clear association between firm/workplace size and the reported incidence of bullying, being lowest in small establishments (3.2% in those with 1-4 persons) and progressively rising to 10.3% in establishments with 100 or more employees. There were no significant gender differences in terms of this association (Task Force on the Prevention of Workplace Bullying, 2001: 32). The survey also revealed a clear association between organisational change in the workplace (new manager/supervisor, change in firm ownership and re-organisation of the company) and the reported incidence of bullying. Workers in workplaces that had experience organisational change were almost twice as likely to report bullying as those in organisations where this was not the case - a finding that confirms the pilot surveys undertaken in Australia by McCarthy and Sheehan (Task Force on the Prevention of Workplace Bullying, 2001: 33-34). These effects applied equally to male and female workers. This report indicates the need for more research in this area, especially as bullying can be associated with job changes if not long-term health effects. In some countries like the USA and Australia there is a considerable overlap between parttime and temporary employment and, given this, OHS outcomes may vary considerably between part-time workers with secure employment and those employed on a temporary basis. However, there are also complex gender and family-structure factors in relation to parttime work that need to be addressed in future studies of the OHS effects of part-time work. For example, the impact of part-time work may substantially differ for single workers without dependents, dual income couples without dependents, dual income couples with dependents, single parent families and single income couples with dependents. Other relevant factors include whether there is multiple jobholding (either several part-time jobs or a part-time job which is an adjunct to a full-time job) and the variability of hours or shift start times. French research also indicates that the combination of part-time work with split shifts may not be ‘protective’ for women because it can severely disrupt their family responsibilities (See Dwyer, 1994). Further, even where part-time work is secure there may still be adverse health effects associated with work intensification, less training and a lower level of participation in OHS committees, unions etc. Again, these issues require further research and whether they can be construed as an outcome of precariousness is a moot point. The question of how contingent work arrangements affect work-life and more specifically work/family balances is another gap that is only just starting to receive attention from researchers. Until recently there was a presumption that flexible work arrangements are more family friendly but while this may be the case in some situations there are ‘flexible’ arrangements like split shifts, extended shifts or no-minimum call back times that are unlikely to achieve this outcome. Research has started to identify serious work/family imbalances associated with changing patterns of work leading a recent NIOSH (2002a: 17) report identified as a priority area for further research. A number of studies identified in the review undertaken for the present report indicated that contingent work had adverse effects on work/family balances. For example, a Canadian study of hospital-based nurses (97% female.
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See Burke and Greenglass, 1999) found that downsizing/restructuring resulted in an increase in reported work/family conflict. Another Canadian longitudinal study of the impact of downsizing/restructuring on hospital staff (not just nurses) also examined spillover demands on family and non-work roles (Shannon et al 2001). A Finnish study (Mauno and Kinnunen, 1999) of job insecurity amongst workers in a paper mill, supermarket, bank and municipal social/healthcare department identified negative spillover effects for women (though not men). There would appear to be no published Australian research on the relationship between contingent work and work/family balances although there is evidence suggesting work/family balance is a significant issue. The Australian Quality of Work Life Survey undertaken in 2001 (Considine and Callus, 2001: 5) found that a poor balance between work and family responsibilities was the second most important factor (after workload) contributing to ‘unacceptable’ stress levels amongst workers. The Australian Research Council has funded a large research project that will explore the connection between precarious employment and OHS, including work/family balances, amongst three groups of workers (truck drivers, hotel workers and telecall centre workers). The Finnish study just referred to raises the broader issue of gender, the relevance of which in terms of contingent work has also been neglected (a point also made by NIOSH, 2002a: 18). While at least half the studies included, or were specifically targeted at female workers, only a handful assessed whether there were gender differences. However, amongst the small number of studies that did (including Catalano and Serxner, 1992; Ferrie et al, 1998; Kivimaki et al 1998; Harenstam et al 1999; Lasfargues et al, 1999; Mayhew and Quinlan, 1999a: Sverke et al 1999; and Simpson, 2000), five concluded women were especially vulnerable to adverse health effects. On the other hand, a Belgian study of the impact of job insecurity on psychological wellbeing (using the General Health Questionnaire or GHQ) by De Witte (1999) found a significant increase in distress amongst men who felt insecure but not women. We need further research to clarify these initial observations. In this research account will need to be taken of the OHS indices used as well as exposure differences arising from the concentration of male and female temporary workers in different sectors and jobs, such as the concentration of males in road transport and building, and women in retailing, hospitality and telecall centres. A similar point can be made in relation to gender-related differences in the employment distribution of self-employed subcontractors, home-based workers and leased workers. It should also be recognised, and several studies did this, that even where men and women work in the same industry and at the same ‘job’ the tasks they undertake can still differ in ways that have implications for health effects (for example in their exposure to occupational violence). A similar set of observations can be made in relation age effects (see also NIOSH, 2002a: 18). As was noted, there are relatively few studies of younger workers even though evidence indicates they are far more likely to occupy temporary jobs. Young, temporary workers in hospitality, retailing and other service sectors have received very little attention, even though they represent a very substantial proportion of the workforce in these industries. A WorkCover NSW and NOHSC facilitated study of 304 young temporary workers in a large multinational fast food company found favourable injury outcomes (benchmarked against the National Data Set) and awareness of hazards/control measures but poor workers’ compensation knowledge and exposures to low level occupational violence (Mayhew and Quinlan, 2002). This Australian study remains exceptional (although important lessons can be drawn from it – see below).
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In the USA, Canada, Australia and other industrialized countries, immigrants and racial minorities are often concentrated in contingent jobs. It has been argued that their marginal status, combined with lower levels of union representation, make it more difficult for them to secure legal entitlements in relation to safety and other working conditions (see Taylor, 1999). There is indirect evidence to support this or to indicate the subject at least warrants closer investigation. In the USA, for example, a CDC/NIOSH (2001) report on work-related fatalities between 1980 and 1995 found black workers had the highest fatality rate of any group (at 5.8 per 100,000 workers) and were also at most risk of occupational homicide. It should also be noted that those industries (transportation, manufacturing, and agriculture/forestry/fishing) and occupations (production/craft/repairers, transportation, farmers/foresters/fishers and labourers) the report found to have highest rates of fatal work injuries (CDC/NIOSH, 2001:xiv) were overwhelmingly industries and occupations marked by an abnormally high level of contingent employment. Yet the report makes no observation with regard to this or how this overlaps with concentrations in the employment of blacks, immigrants or other minority groups. Recent concern has been raised especially in relation to Hispanic workers for whom the rate of fatal work-related injuries increased in the period 1995 to 2000 – a period when the national work-related fatality rate and the total number of workrelated fatal injuries declined (Bureau of Labor Statistics figures cited in AFL-CIO 2002:8,2022). Hispanic workers, including illegal immigrants, are known to commonly work in dangerous industries with a high proportion of contingent jobs such as construction (for an analysis of the connection between ethnicity and contingent work in the USA see Glasgow et al 2002). In a recent report on changing work arrangements, NIOSH (2002a: 18) ethnic and racial subpopulations as an area in need of further research. In Australia, a study by Mayhew and Vickerman (1996) indicated that Aboriginal workers in Queensland were concentrated in contingent jobs and effectively had limited access to worker’ compensation entitlements (for more evidence see Chapter 6). More detailed research is needed to examine the association between higher rates of injury/access to legal entitlements and the occupational/contingent work profile of particular groups. At the very least, minority status is likely to exacerbate the vulnerability of contingent workers. As far we aware very little research has been undertaken into another group, namely casual day labour including those hired on an informal basis at known pick up points. The latter practice is apparently growing in the USA (although no statistics on its extent exists) and while it is known to exist in Australia its extent is unknown. A study of agricultural day labourers in Quebec found widespread violations of OHS standards, long hours of work and a reluctance by these workers to make claims for work-related injuries accidents (Mimeault and Simard, 1999). Casual workers recruited at pick-up points (which can include illegal immigrants and, in the USA at least, the homeless) may be an especially vulnerable position. Highlighting this, the United States Department of Justice (Press Release 28 May 2002) recently announced that a medical practitioner and real estate partnership in Virginia had pleaded guilty to hiring homeless people and others to remove asbestos from buildings without any information or training. While this may be seen as an extreme case it cannot be doubted that such workers are in a very vulnerable position. Some studies hint at the long-term effects of a succession of temporary jobs as workers age. These issues have not been sufficiently investigated. Further, while this review has grouped industries together, the extent and nature of precarious employment (such as the degree of reliance on subcontractors or temporary workers) can vary significantly between industries, as can the economic and regulatory environment that impacts on this. In sum, there is a need for gender, age and industry sensitive analysis.
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Adverse health and safety effects may extend to fellow workers, for example through the growth of occupational violence (Neuman and Baron, 1998; Snyder, 1994) or spread outside the workplace. For, example, several studies indicate downsizing can increase the incidence of occupational violence by altering staffing levels and work practices. A US study by Snyder (1994) found assaults on staff in hospitals increased as a result of the closure of specialist wards and movement of high-risk patients into general wards following downsizing. Other studies indicate that job insecurity can negatively affect the health of family members (Bohle et al., 2001). A recent study of bullying in local government in Finland (Vartia, 2001:63-69) found that both targets and observers of bullying reported more general stress reactions than those who had never been subjected to or observed bullying (haste, difficult tasks and poor goal clarity also predicted stress reactions). Targets of bullying were also most likely to use sleep-inducing drugs or sedatives than their ‘non-bullied’ counterparts. These contagion effects warrant more extensive investigation. Another raft of important issues deserving greater attention from researchers and agencies are the institutional, infrastructural (including health and social service infrastructure) and regulatory effects of changing employment relationships. These include the impact of contingent work on the provision of occupational health services, worker and manager knowledge of legal responsibilities and entitlements, the nature and effectiveness of interventions aiming to address these issues and effects on workers' compensation, OHS regulation and management more generally. Bridging the knowledge gaps in these areas may well prove to be at least as important as obtaining better measures of the 'direct' health effects since they have a direct bearing on the identification and selection of remedial measures, including modifications to existing regulatory regimes. Virtually all of the issues just mentioned are identified by a recent review of knowledge gaps and future research directions in connection with changing work organisation undertaken in the United States by NIOSH (2002a). The report (NIOSH, 2002a: 17) noted that many workers in 'non-traditional' jobs lacked the same level of regulatory protection (in terms of minimum wages, rights to collectively bargain and safeguards from discrimination) and organisational supports. The report (NIOSH, 2002a: 19) also observes that there was comparatively little research into OHS interventions in the context of work reorganisation. It noted that such work as had been undertaken, principally in the area of work stress, was often flawed (Nytro et al 2000 make a number of similar points). Similarly, a recent report on 'new contractual arrangements' prepared by the European Agency for Safety and Health at Work (Goudswaard, 2002) identified critical challenges to OHS management and the need for more research into regulatory and policy dimensions of these challenges. The regulatory effects and policy of changing employment arrangements, both in terms of preventative legislation and workers compensation, and the strategic measures that have or may be used to address the problems associated with this, form a primary focus of the current report. Hopefully, it will contribute to bridging this gap. Two other issues identified by the NIOSH (2002a) review as warranting further attention deserve mention. First, the report notes the need to consider the connection between contingent work arrangements and minimum employment standards and other standards that arguably set a floor for existing OHS regimes. The report on the OHS implications of new contractual arrangements prepared by the European Agency for Safety and Health at Work (Goudswaard,
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2002: 38) also makes reference to the critical intersection of OHS and industrial relations regimes. This applied not only to substantive working conditions but also procedural/institutional arrangements. The Agency review noted that a report by the European Foundation for the Improvement of Living and Working Conditions that found more institutionalized the relationship between government and, or amongst, unions and employers were conducive to positive compromises. The second issue raised by the NIOSH (2002a: 15) review is the effect of changing work arrangements on worker empowerment and development, or more precisely the capacity of these workers to influence job conditions and improvements. In its recent report, the European Agency for Safety and Health at Work (Goudswaard, 2002: 9) extends this point, arguing these arrangements reduce understanding and self-control while simultaneously demanding more independent decision-making on the part of workers: Employees may lose their understanding and influence over the changes, whilst at the same time self-control and self-steering becomes more important.
This contradiction exacerbates the risks because workers confront increased demands for selfreliant decision-making but have less scope to meet these demands. The degree of influence that workers can exercise with regard to OHS is the outcome of a combination of informal and formal institutional practices (including the role played by employment continuity and career ladders or rather their absence) at the workplace as well as legal rights and entitlements. Overall, there are some important gaps in existing research although it seems fair to suggest that most of these omissions are more likely to lead to an underestimate rather than overstate the scope and extent of the OHS effects of contingent work arrangements. Methodological difficulties Several methodological limitations complicate interpretation of this literature. For example, four of the five studies of call centre and teleworkers cited in this review lacked baselines or control groups. Consequently, while some linked musculo-skeletal injury to higher work intensity (see Ferreira et al., 1997; Sznelwar et al., 1999), it was impossible to assess how the magnitude of this effect compared to that experienced by workers undertaking the same tasks in more conventional work settings. The one study of telecall centre workers we are aware that did use a control, namely a Swedish study of computer help workers (Norman et al, 2001) found significant health differences. Obtaining a control group for this particular subcategory of telecall centre worker is far less problematic than for other subcategories (such as those involved in telemarketing and more routine types of customer service) because it is now difficult to identify workers outside a telecall centre setting who are undertaking this type of work. This limitation with telecall center studies just identified is symptomatic of a range of methodological difficulties that apply to a range of categories of work arrangements. First, identifying control groups or benchmarks to measure effects is not always easy, especially in areas where contingent workers dominate the workforce, such as casual and temporary workers in the fast food industry. Second, there may be significant task differences between outsourced or home-based workers on the one hand, and workers providing the same product or service in another setting (such as a large factory or workplace). Third, longitudinal
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research methods do not always provide a viable means of avoiding at least some of these deficiencies. For example, participant attrition is likely to prove a serious complication to longitudinal cohort studies of temporary, leased or subcontract workers because of the inherent transience of these forms of employment. This probably helps to explain why studies of temporary workers are overwhelmingly based on single survey methods or secondary data analysis. Fourth, where survey methods are used obtaining a random sample may be especially difficult if not impossible in the case of some groups of workers, such as homebased, mobile or transient workers unless a central list or contact point for them exists (not often the case). Where such workers are recently arrived or even illegal immigrants these problems are compounded. Fifth, in some industries at least (such as telecall centres) obtaining employer permission to undertake research is not always easy due to adverse publicity associated with the work arrangements or the fear that research will identify serious OHS deficiencies in relation to a category of workers that these same employers are making greater use of. Obtaining employer and worker permission for any type of OHS research may encounter difficulties but the point being made here (based on direct experience of researchers) is that these difficulties are often greater in the case of contingent workers. There are also reporting problems in relation to some health and safety indices. In relation to sickness absence a number of studies have noted that the effects of downsizing, job insecurity or temporary contracts can be to reduce the willingness of contingent workers to take sick leave for fear of losing their job or missing the opportunity to obtain a more permanent position (see for example Beale and Nethercott, 1988 and Virtanen et al 2001). During the course of this project a number of union representatives made an essentially similar point in relation to injury/disease reporting more generally. Finally, in some industries like long haul transport competition between self-employed and employee drivers for tasks lead to an overall deterioration in OHS outcomes that also narrows the differences between the two groups to an extent not found where inter-worker competition is not so intense or precluded by regulatory controls (see Mayhew and Quinlan, 1999, Quinlan 2001). These difficulties in researching the OHS outcomes of contingent work arrangements are often overlooked. However, it is important to note that the implications of at least some of these difficulties (such as reporting problems) are likely to lead to an understatement (rather than a overstatement) of the OHS effects. Another potential criticism of existing research is that the analysis of contingent work is too crude. First, it may ignore important variations in worker characteristics (such as gender, age, education, family commitments, prior experience of job insecurity and whether temporary work was a chosen voluntarily chosen or not) with particular work arrangements. Second, most existing research deals with broad categories of employment arrangement and in so doing ignores potentially important task differences or subcategories of, say, temporary work. Illustrating both these points, Lippel argues a gender-based analysis, specific to each type of contingent work, is essential. This is because, because women home-based workers tend to do more monotonous types of tasks (such as data entry or garment making) – often on a piecework basis – while male home-based workers are more likely to be engaged in software conception or other more valued professional tasks (for Canadian evidence on this see Bernstein et al. 2000 and Cox et al 20001).
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Recognising differences within the broad category of temporary employment, a recent Swedish study based on a stratified working population sample by Aronsson et al (2002) identified five subcategories of temporary workers, namely substitutes, probationary employees, seasonal workers, employed on projects and on-call workers. When these groups were compared to permanent workers it was found that all compared unfavourably to permanent employees in terms of working conditions, training and their capacity to influence decision-making by their superiors. In other words, temporary workers generally exerted less control over their working lives that could in turn have implications for OHS. At the same time, in terms of health outcomes the pattern of results was less consistent although on-call and substitute workers reported far more health complaints. In trying to make more sense of these variations, Aronsson et al (2002) advocate centre-periphery perspective where companies are differentiated hierarchically in networks shaped in accordance with conditions of power and dependence. Employers at the centre reinforce their benefits/security at the expense of a periphery composed of subcontractors and their employees. This division is mirrored by differences in the job security, conditions and bargaining power of workers in the core and periphery. In terms of this, workers on probation or engaged on projects are close to the core while seasonal and on-call workers are at the extremes of periphery (substitutes fall in between these groups). This approach can readily encompass both health and safety effects, including effects on worker knowledge, compliance and access to entitlements under OHS legislation. Further, as also noted by Aronsson et al (2002), translating concepts between countries must be done with some degree of caution due to regulatory and institutional differences. For example, in France employment regulation draws a distinction between contract jobs of that are 12 months or longer – a distinction that has no equivalent in countries like Australia. Adopting this distinction, a study by Francois and Lieven (1995) found that which leased fixed-contract workers all had an elevated risk of injury in comparison to permanent workers the difference was greatest in relation to those on very short-term contracts (ie less than 12 months). It should also be noted that this study looked at temporary workers who supplied by labour leasing firms. It is plausible that OHS outcomes may differ between directly hired temporary workers and those supplied by labour hire/labour leasing firms (certainly there is a difference in terms of regulatory responsibilities which reside entirely with the host company in the former but are shared between the host firm and the labour supplier in the latter case). During visits to a number of Industry Reference Groups a number of employer representatives expressed the view that they regarded leased workers as posing greater problems with regard to OHS than those hired directly. There is clearly a need for more differentiated research and we will have more to say about several of the issues just mentioned (such as age) below. At the same time, these factors may not assume the same importance for indices of health and wellbeing as for safety. For example, while the degree to which workers have chosen contingent work may affect job satisfaction (Feldman et al, 1995) and level of job satisfaction may in turn affect psychological wellbeing available evidence does not indicate a strong causal link between job satisfaction and occupational injuries (Frone, 1998:573). Similarly, there has been ongoing debate on how best to measure job insecurity and related issues (such as personality and age effects, the role of moderating variables and whether downsizing/restructuring is better viewed as a single event or as a series of events. Hellgren et al 1999 and Kinnunen et al 1999). Again, these debates may have more relevance for understanding effects on health and wellbeing than safety.
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As already implied, the classification of particular types of contingent work is also complex and this creates a further problem for researchers seeking unproblematic comparisons and control groups. For example, outsourcing arrangements can involve independent subcontractors or firms with their own employees (often in the same industry) and in some cases workers may move back and forth between self-employment and employee status. Home-based work can be based around outsourcing or it can simply entail a geographic (and sometimes partial) relocation of employees. Labour leasing can entail the provision of selfemployed, temporary or permanent workers. Downsizing by an organisation may differentiate between particular groups of workers according to their employment status. Some writers on psychological contracts (McLean Parks, 2000) have pointed to the need for even finer levels of gradation within particular categories of contingent work such as temporary/fixed contract workers, although such distinctions may have more relevance for analysing health and wellbeing than safety. These examples are illustrative not exhaustive and, as should be clear from our earlier review, an additional complexity is the potential for one group of workers to combine several different categories of contingency such as part-time homecare workers whose employer has restructured/downsized (see Brulin et al 2000). This makes it more difficult to isolate what are the critical factors shaping inferior OHS outcomes when these are identified. It also makes the differentiation or grouping of particular subcategories of contingent work a difficult though by no means impossible task (Quinlan et al 2001). Ultimately, however, the rapidly growing body of research will enable systematic testing of any categories already adopted, including our own (see above), as well as finer grades of differentiation. Whether, such differentiation significantly modifies an increasingly compelling body of evidence remains to be seen. Other Evidence on the OHS and Workers’ Compensation Effects of Contingent Work In addition to the scientific literature there is other evidence attesting to adverse health and safety effects of contingent work arrangements. A strengthening body of census data indicates self-employed workers face a significantly higher risk of serious injury and death than employees. Not all self-employed workers are subcontractors but the categories do overlap considerably. The US Bureau of Labor Statistics annual census of fatal occupational injuries have consistently shown that self-employed workers account for 19-20% of fatal injuries but represent only around 8% of the employed workforce (Abraham, Weber and Personick, 1996; and Bureau of Labor Statistics, 1996 and 1997a). Ranking fatalities by occupation revealed a fairly consistent pattern, headed by truck drivers followed by farmworkers, salesworkers, construction labourers, other labourers, military personnel, timber cutters, police, pilots and electricians. Bureau of Labor Statistics, 1997a: 5). At least five of these high fatality occupations are characterised by high levels of subcontracting and self-employment. Similar findings have emerged from fatality censuses and research on work-related deaths in Australia (Mayhew et al 1997 and Mayhew and Quinlan, 1997). Workforce survey data has also provided some suggestive evidence of a connection. For example, analysing UK labour force survey data for the years 1993/94 to 1996/97, McKnight et al (1999) found workers were most likely to suffer an injury in the first year (especially the first six months of a job). Drawing on this McKNight et al (1999:iii) observe: The growth in use of temporary workers on short-term contracts may expose a greater proportion of workers to accidents at work.
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A broader workforce survey has been undertaken of working conditions in the European Union at five yearly intervals since 1990. These surveys have given explicit recognition to variations in contractual arrangements/employment status and have thus allowed some tracking of these factors over time. The most recent survey undertaken in 2000 (Paoli and Merllie, 2001) entailed interviews with 21,703 workers, including a representative sample of 1,500 the active population (including the self-employed) for each member state except Luxembourg (where 500 workers were surveyed). It is impossible to do justice to the wealth of information this survey has yielded but a few of the more pertinent results are worth mentioning. Apprentices and those on indefinite contracts were most informed about the risks of using materials, instruments and products (80 and 79% respectively) followed by fixed term contract workers (71%) and temporary agency workers (62%. Paoli and Merllie, 2001: 10). Temporary agency workers were least likely to report being able to discuss working conditions at their workplace (58% compared to 76% of those on fixed term contracts, 80% of those on indefinite contracts and 73% of apprentices). The situation was largely similar in terms of their ability to discuss changes at the workplace (55%, 69%, 77% and 65% respectively (Paoli and Merllie, 2001: 26). The survey (Paoli and Merllie, 2001: 13) found that 51% of temporary agency workers reported having no influence over the pace of work compared to 35% of those on fixed term contracts and 32% of those on indefinite contracts (and 42% of apprentices). Temporary agency workers and those on fixed term contracts were slightly more likely to report fatigue (24 and 26%) than those on indefinite contracts and apprentices (22 and 17%. Paoli and Merllie, 2001: 32). Temporary agency and fixed contract workers were less likely to report being satisfied with their working conditions (72% and 80% compared to 85% for indenfinte contract workers. Paoli and Merllie, 2001: 34). On the other hand, temporary agency workers were less likely to report physical assaults from either persons at the workplace or others (Paoli and Merllie, 2001: 28). Temporary agency workers were twice as likely to report being unable to get assistance from colleagues when required (17%) than those on fixed contracts (8%) and indefinite contracts (10%). Similarly, apprentices and indefinite contract workers were far more likely to have received training in the past 12 months (40 and 35% respectively) than those on fixed term contracts (31%) or temporary agency workers (23%. Paoli and Merllie, 2001: 18-19). Investigations into serious incidents have also illustrated the potentially disastrous potential of contracting arrangements to endanger worker or public health and safety. For example, poorly managed subcontracting arrangements have been identified as an important causal factor in incidents such as the Royal Canberra Hospital implosion in July 1997 and the fire aboard HMAS Westralia in May 1998 (for a discussion of this from an engineers perspective see Yates, 2000). Why haven’t these problems become more evident in official OHS data? An obvious methodological question that these findings raise is why a serious deterioration in health indices identified has not been apparent in national OHS statistics. There are number of possible (and not necessarily mutually exclusive) reasons for this, namely that the effects have been: • masked by other effects that have improved OHS outcomes such as the shift in employment from manufacturing to the service sector
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• • •
masked by significant under-reporting (workers comp coverage, claims and recognition) exacerbated by recent decisions reducing worker entitlements obscured simply because these possibilities have not been accorded sufficient attention ignored so far because this evidence is capturing a long term shift that will become more evident over time
Each of these arguments can be dealt with in turn. Masking by Inter-Sectoral Shifts in Employment and Other Improvements At the general level, it could be that the deterioration has been masked by an overall improvement in OHS due to inter-sectoral shifts in employment notably from manufacturing, forestry, mining and construction to the service sector (for a study of these effects see Ostry, 2000). At a more specific level, it could be suggested that the way OHS statistics are constructed in most countries does not just ignore differences in employment status but may actually disguise these effects (see below). Further, in some countries the matching of OHS statistics with data on employment status is made difficult because government statistical agencies have only recently tried to identify the extent of these employment arrangements through irregular surveys. Thus, data matching is difficult and in the USA, if not elsewhere, this problem is compounded by the arbitrarily narrow definition of contingent work and temporary jobs used by the Bureau of Labor Statistics (see Quinlan and Mayhew, 1999). It should also be noted that until recently researchers simply did not look for these effects although when they did, as Foley’s (1998) study shows, a significant effect was discernible. Masking by Recording Conventions and Reporting Effects In general the recording conventions relating to labour force/employment patterns and OHS outcomes used in Australia and most other countries have provided, at best, a limited capacity to chart changes in work organisation/employment status let alone link these characteristics to the incidence of work-related injury and disease. This problem has received only limited recognition by statistical recording agencies in Australia. In the USA, by way of contrast, a recent NIOSH (2002a: vi-vii, 6) report identified an urgent need to implement data collection in ways that would shed light on worker exposure to organisational risk factors for injury and disease at work reinforced by research into the health effects of changing work arrangements as well as interventions targeting organisational practices. The report (NIOSH 2002a: 5) noted that the United States lacked a surveillance system for tracking changes to organisational working conditions comparable to the European Union’s cross national workforce survey undertaken at five yearly intervals. The report (NIOSH, 2002a: 8) argued it would be most desirable for the United States to adopt a nationally representative survey of the organisation of work although it also noted that some beneficial changes could be made existing public and private domain data sources to enhance their value in this regard. It is also possible that reporting effects have masked the deterioration in official statistics. Official OHS statistics are often based on workers’ compensation claims that are known to significantly understate the actual incidence of occupational injury, disease and illness. This includes substantial omissions in relation to disease and acute and chronic injuries (for a recent US study on the under-reporting of musculoskeletal disorders see Morse et al 2001. See also Glazner et al, 1998 and Dembe, 2001). Surveys conducted by the ABS in 1993 and 2000 indicated that fewer than half of those workers suffering an injury or illness at work made a workers' compensation claim (see Chapter 5). Relying on data from the ABS Survey 66
of Employment Arrangements and Superannuation, a recent NOHSC (2002: 7) report found that only 82.3% of respondents reporting a work-related injury or disease believed they were covered by workers’ compensation. Drawing on other survey evidence, the report noted that a high proportion of self-employed workers were not covered by workers’ compensation (NOHSC, 2002: 7). In addition, the report found some groups that were eligible, such as casual employees, were significantly less likely to lodge a compensation claim when injured at work (NOHSC, 2002: 13). The report concluded that National Data Set statistics (compiled from workers’ compensation claims data) could understate the rate of work-related injury/illness for casual workers. The report (NOHSC, 2002: 19-20) also identified significant inter-industry and inter-occupational variations in claims behaviour (including seeking no assistance or other forms of support). Benchmarking results for the ABS Work Related Injuries Survey against the National Data Set NOHSC (2002: 22-23) found that variations in employment status probably played a significant role in how close the two figures matched for different industries (the gap was especially wide in relation to transport and storage). In terms of the incidence of work-related injury and illness the NOHSC (2002: 24) report noted that two ABS surveys (the Survey of Employment Arrangements and Superannuation and the Work-Related Injury Survey) yielded very different results, both in terms of the aggregate level of injury as well as the pattern according to employment status, and concluded: …a more reliable measure of the OHS experience of Australian workers not covered by workers’ compensation is clearly required.
Similarly, a recent national survey conducted by Shannon et al (2001a) in Canada found that a workers' compensation claim was lodged by only 60% of those eligible to do so. A growth in precarious employment will almost certainly compound omissions in workers' compensation claims data. For example, identifying a disease related to occupational exposure (let alone making a claim for compensation) becomes immensely more difficult where a worker has held a series of relatively short-term jobs in a diverse range of work-settings. Workers holding insecure jobs may also be more reluctant to make claims. These problems have been identified in government reports in several countries (see NOSHC 2002 report discussed above). For example, a report on temporary work undertaken for the Italian Ministry of Labour and Social Justice (Synthesis, 1997: 6-7) noted a substantial difference in the statistics on work-related fatalities amongst ‘temporary/unusual’ workers produced by the compensation authority (INAIL) and the number determined by the Ministry of Labour for the same period. Indeed, the latter figure was almost three times that produced by INAIL. The report goes on to discuss reporting problems in the broader EU context. Further evidence confirming this effect in Australia is presented in later chapters (see especially Chapter 5). Reporting problems will also affect other sources of data. In a similar vein retrospective epidemiological studies will become more difficult because it is less likely that an occupationally related disease will be recorded on a death certificate. For workers having held a series of jobs it will even be difficult to record ‘usual occupation’ (a requirement for death certificates in the USA and other countries) with any degree of accuracy. Ironically, the problem is liable to be most acute for male workers, given the already high error rate for working women whose occupation is entered as ‘housewife’ (Zahm, 2000:443). Similarly, the cross-matching of cancer registries with groups of workers is made more difficult even where many workers remain in the same industry but where workers move geographically (even across international borders) to engage in tasks on seasonal basis (as noted by a recent US
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study of cancer amongst often Hispanic farmworkers in California. See Mills and Kwong, 2001). Use of data based on 'mandatory' employer reporting of injury and illnesses in their workplaces (as required by OSHA in the USA and used by the Bureau of Labor Statistics to compile statistics) is also subject to serious reporting effects - or to put it more bluntly underreporting. In the USA periodic investigations by OSHA have confirmed these problems and efforts to combat this by data matching with workers' compensation claims is unlikely to succeed given the flaws in the latter already alluded to (Moody, 2000: 8). Moreover, OSHA investigations regarding temporary workers revealed a failure by companies to maintain adequate injury and illness records in relation to this group (Ebert and Wilkerson, 2001: 36). It should also be noted that employers with 10 or fewer employees are effectively exempted from the OSHA requirement to log each injury and illness because of an annual appropriations rider passed by Congress. This significant omission receives remarkably little acknowledgment when the BLS data is published or analysed. In practice, it can be suspected that recording keeping by small business is likely to be less reliable. There has been little research into mandatory injury reporting requirements under OHS (as distinct from workers’ compensation) legislation in Australia but one study undertaken in Queensland identified a substantial level of under-reporting (Mayhew and Wyatt, 1995). It is worth noting that in order to identify non-reporting agencies may use data matching with workers compensation claims (for example, see a recent prosecution of a freight company in Victoria for failure to report a fatality see CCH OHS Alert 13 August 2002). While the reporting requirement can and does pick up serious injuries/fatalities that do not result in a worker’s compensation claim (because the worker was, for example, a self-employer farmer and therefore not covered by workers’ compensation) it is also ‘misses’ both some injuries that result in a workers’ compensation claim and others that do not. So even cross matching and combining the data sets (a laborious process) would result in a better but by no means comprehensive data set. Further evidence on the problematic nature of official occupational injury and disease data in Australia - and its particular relevance of these flaws in relation to contingent work - will be presented in later chapters of this report. There is a suspicion in at least some countries that the gap between incidence and claims may have widened over the past decade due to recording conventions (such as in the calculation of working hours), changes to reporting and in workers’ compensation regimes, the introduction of managed care etc. Hence, the apparent improvement in OHS statistics may be, at least in part, an artifact of reporting. More to the point, in many countries the expansion of precarious employment has meant an increasing number of workers (like self-employed subcontractors who are for the most part not covered in the USA, Canada and Australia) who are either formally excluded from compensation coverage or subject to voluntary (rather than compulsory) cover. In other words, the pool of workers is diminishing and an apparent improvement in OHS claims statistics would be expected to flow from this (especially as some of those falling outside the system work in dangerous settings such as subcontractors in construction). References to long-term improvements in OHS statistics in Australia and other countries with which I am familiar seldom if every make any reference to this. For a probably much larger group of workers cover is uncertain or they are reluctant to make claims for fear of interfering with income flows, current or future employment prospects (Quinlan and Mayhew, 1999). Clearly, to make meaningful comparisons using official data requires better knowledge of the employment status and claims behaviour of particular
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categories of workers (say between hospital-based nurses and those in nursing homes or home-based health care). Available evidence indicates those occupying precarious jobs are more reluctant to report injury, delay reporting or only report severe injuries. This means that identified associations may understate frequency or produce a bias towards serious injury amongst the contingent group. A recent USA study (Meyer and Muntaner, 1999) using compensation data found home-based nurses/nursing aides experienced fewer injuries than their counterparts in nursing homes. However, they had more injuries than hospital-based staff and their claims also resulted in more lost time and costs than both nursing home and hospital staff. Knowledge of reporting effects as well as work practices may help to understand why home-care workers appear to have more severe injury. Further, information on the employment status of nursing home personnel might indicate whether there was underreporting in relation to this group (due to a higher level of temporary employment than hospital staff). While it is impossible to indicate all the permutations, researchers need to be aware of these issues in both constructing studies and, equally importantly, interpreting their findings. Further, the possibility needs to be acknowledged that changes to practices for managing workers’ compensation claims, including the use of managed care regimes in the USA or the increased use of experience rating may affect claims behaviour both at an aggregate level and in relation to specific categories of workers. For example, a recent North American study (Thomason and Pozzebon, 2002) found that the small to medium firms were more likely to manage (ie contest) claims rather than make improvements to OHS. The links between precarious employment and workers’ compensation claims are explored in more detail elsewhere in this report (see also Quinlan and Mayhew, 1999). To reporting problems already noted we might add recording and data leakage problems. These issues were raised directly in the course of interviews and data gathering for this project. With regard to recording conventions it should be noted that in most jurisdictions workers’ compensation agencies record only a very limited amount of information regarding the employment status of claimants. When asked about what information they could provide the most common response from the persons in these agencies responsible for statistics was to say that it might be possible to differentiate part-time and full-time workers on the basis of hours-worked information included in the compensation claim form. Survey evidence suggest even this distinction would be crude since some ‘part-time’ workers actually work hours that would lead them to be categorized as full-time. Some agencies had done breakdowns. For example, in Tasmania it was found that part-time workers accounted for about 20% of all claims but the analysis had not proceeded to examine the overall incidence by comparing this to the overall level of part-time employment in the state (and better still using an industry by industry breakdown) and adjusting for exposure based on hours of work. In terms of data leakage it can be noted that during the visit to the Mining Industry Reference group a discussion was taking place in relation to data that had been collected on the respective injury claims for subcontractor and employees. The person responsible for collecting these statistics for the IRG expressed grave concerns about a serious and growing level of data leakage (ie injuries failing to appear in either data sets) – an interpretation that was accepted by both industry and union representatives on the IRG. In sum, the growth of contingent work arrangements present serious problems for the collection of data that forms the basis of official OHS statistics in many countries. By and large, these problems have been entirely ignored in discussions of long-term trends in the level (both absolute numbers and incidence) of work-related injury and disease. It is entirely
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possible that the apparent improvement in OHS injury statistics (though not always fatal injury statistics) in Australia and other countries is, at least in part, an artifact of these reporting effects. It is worth noting that several countries, such as Spain and France, have recently reported a reversal in the long-term decline in the incidence of work-related injury and disease (see European Agency for Safety and Health at Work, 2002a). It is too early to judge whether this reversal is a minor glitch or indicative of a new trend. Irrespective of this, the reporting/recording issues just raised warrant closer examination and acknowledgement. The evidence is there but simply hasn’t been recognized Until comparatively recently organisational and employment status factors received little attention in either the compilation of official statistics of work-related injury and death or in academic research using these and other data sources. In the main, official data sets offer only the crudest breakdowns according to employment status and organisational characteristics but even some of these were revealing for those who cared to look. As has been noted elsewhere (see Mayhew et al, 1997 and Quinlan and Mayhew 2000) occupational fatality censuses carried out in the USA during the 1990s consistently indicated that self-employed workers were around twice as likely to die at work as employees. Similarly, a recent analysis of workrelated fatalities in the European Union found that self employed workers, workers in firms with 9 or fewer employees and those in firms with between 10 and 49 employees were more than twice as likely to suffer a fatal injury at work as workers in firms with more than 250 employees (Walters, 2001: 73). While Walters’ (2001: 74-85) analysis of non-fatal injuries for particular EU countries revealed a more complex pattern of results the evidence is still sufficient to question the conventional focus on the nature of workplace risks to the exclusion of organisational factors. In 2001 the European Agency for Safety and Health at Work (2002: 2) used a range of sources to examine factors influencing injuries at work and with regard to employment status it observed: Only having worked in an establishment for a short time is a risk factor – among persons who have a permanent job but have held it for less than two years, the incidence is 26% higher than average. In the case of temporary workers who have been employed less than two years, the risk is particularly great in construction (+65%) and health and social work (+43%). Other factors that aggravate the risk include part-time working or reduced working hours (fewer than 20 hours usually per week: +44%) and difficult working conditions (shift or night work).
In Australia a survey of workers reporting work-related injuries and illnesses undertaken by the ABS found self-employed workers had a lower incidence of injury than employees (NOHSC 2002:6). On the other hand, the same NOHSC (2002: 2) found that: Part-time workers reported a much higher rate of injury/illness per million hours worked than did full-time workers (50.8 versus 25.6). Part-time workers also appear less likely than full-time workers to make successful claims for workers compensation in the event of an injury.
In Australia and most other countries the published workers’ compensation claims often data fails to differentiate employment status (whether the worker was engaged on a temporary or permanent basis etc) and these breakdowns may be impossible to arrive at even from unpublished data. Similarly, until recently no attempt has been made to explore any association between organisational restructuring by employers and their claims experience.
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In a few instances overseas where analysis of such breakdowns has been attempted they have, to our knowledge, revealed significant differences in terms of frequency or costs. For example, in the USA detailed examinations of workers’ compensation data has been undertaken in both Washington state and Minnesota, comparing temporary and permanent workers. A study by Foley (1998) examined workers’ compensation claims data (insurance premiums, claim rates, claim costs and working days lost) in Washington state for the years 1991-96. He found compensation claim rates and costs were significantly higher for contingent workers than non-contingent workers across all four measures. Two further studies in the same state by Silverstein and her colleagues reinforced these findings. The first study (Silverstein et al 1998) analysed workers’ compensation claims data in relation to workrelated disorders of the upper extremities amongst temporary/contingent workers (labour hire) in Washington state between 1987 and 1995. They found temporary help agencies were in top 10 high-risk industries after 1989, with claims being most pronounced with regard to assembly and machine operators followed by construction workers. A later study (Silverstein et al 2002) that analysed workers’ compensation claims data between 1990 and 1998 found that temporary workers in manufacturing and administrative services ranked high on the prevention index for musculoskeletal disorders Butler, Park & Zaidman (1998) analysed workers compensation claims for 11,144 temporary workers, 2,174 part-time workers and 10,600 full-time/secure workers in the state of Minnesota during the years 1990-96 They found temporary workers (but not part-timers) had higher claim rate and incurred average claim cost more than three times those of permanent workers despite also experiencing a higher claims rejection rate (the difference was even greater when controlling for worker characteristics such as age). Park and Butler (2001) undertook the only systematic study of downsizing and workers’ compensation of which we are aware was, examining 5,125 worker’s compensation claims in 121 firms between 1990 and 1998. They found downsizing increased claims duration but not frequency (although they also noted the potential for significant reporting effects since downsizing could remove likely claimants as well as making survivors fearful about making claims). In the course of this project an attempt was made to collect available workers’ compensation claims data in Australian jurisdiction that might shed further light on these effects. Most were unable to supply claims data broken down by employment status or which measured the effects of organisational restructuring by employers (though one workers’ compensation agency stated that its tracking of claims revealed a clear correlation between downsizing by organisations and an increase in stress-related claims). Three jurisdictions did supply claims data relevant to this report. First, South Australia supplied claims cost data in relation to the labour hire industry. Second, Victoria provided data on the nature of injury and disease claims broken down by part-time/full-time employment status and gender. Third, NSW provided data on both the number and cost of claims broken down by part-time/full-time and permanent/non permanent employment status and industry. Table 2.1 provides data on the number of workers compensation claims by part-time and fulltime workers in NSW broken down by industry for the years 1995/96 to 1999/2000. Tables 2.3 and 2.4 provide data on the number of compensated claims by female and male workers in Victoria broken down by nature of injury/disease for the years 1995/96 to 2000/01. Table 2.2 records the number of compensation injury claims by permanent and non-permanent workers in NSW broken down by industry for the years 1996/97 to 1999/2000. Logistical constraints on this project meant that no detailed analysis of this data could be undertaken, most notably
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TABLE 2.1: NEW SOUTH WALES: PERSONS IN FULL-TIME OR PART-TIME EMPLOYMENT AT THE TIME OF INJURY OR ILLNESS, 1995/96 – 1999/2000 1995/96 Full-time Part-time Workplace Industry anzsic Agriculture, forestry and fishing Mining Manufacturing Electricity, gas and water supply Construction Wholesale trade Retail trade Accommodation, cafes and restaurants Transport and storage Communication services Finance and insurance Property and business services Government administration and defence Education Health and community services Cultural and recreational services Personal and other services Total
1996/97 Full-time Part-time
1997/98 Full-time Part-time
1998/99 Full-time Part-time
1999/00 Full-time Part-time
3820 6444 45941
844 37 1986
3204 5914 41628
1170 30 3100
3334 5066 40767
1162 339 3009
3813 3925 37012
878 278 2320
3708 3744 34518
802 309 2036
2536 14329 8141 14946
27 478 508 3688
2156 12609 8165 15763
25 707 716 2897
2129 14666 8095 15269
48 737 724 2741
2022 15351 8495 15640
32 667 771 2738
1890 15322 8475 15935
49 810 894 2496
6627 12228 109 2658
2562 986 11 247
6892 11845 135 3116
2353 1055 23 138
5610 10650 746 3109
2225 1001 112 210
6408 10061 864 2927
1936 939 75 169
6641 9744 815 2783
2045 906 38 117
8264
1442
7776
1179
7905
1286
8622
1331
7869
1392
9925 7254
149 386
12492 4498
325 218
4535 7151
91 269
5497 7577
111 245
5990 8006
90 206
14009
2254
14770
1371
14674
1291
15908
915
15257
950
2711 5552 165549
306 271 16182
2743 5444 159150
388 303 15998
3199 6421 153326
404 364 16013
2984 6513 153619
305 341 14051
2836 5883 149416
289 355 13784
Source: compiled from data supplied by WorkCover NSW
72
TABLE 2.2: NEW SOUTH WALES PERSONS IN PERMANENT OR NON- PERMANENT EMPLOYMENT AT THE TIME OF INJURY OR ILLNESS, 1996/97 – 1999/2000 1996/97 Non Permanent Permanent Workplace Industry anzic Agriculture, forestry and fishing Mining Manufacturing Electricity, gas and water supply Construction Wholesale trade Retail trade Accommodation, cafes and restaurants Transport and storage Communication services Finance and insurance Property and business services Government administration and defence Education Health and community services Cultural and recreational services Personal and other services Total
3566 5927 42766 2163 12888 8385 14924 6706 11954 140 2796 7529 12308 4255 13199 2770 5469 157745
808 17 1962 18 428 496 3736 2539 946 18 458 1426 509 461 2942 361 278 17403
1997/98 Non Permanent Permanent 3592 5364 41784 2149 14947 8236 14317 5636 10901 815 2860 7795 4550 6995 13202 3213 6472 152828
904 41 1992 28 456 583 3693 2199 750 43 459 1396 76 425 2763 390 313 16511
1998/99 Non Permanent Permanent 3921 4164 37566 2035 15562 8629 14459 6278 10227 903 2725 8662 5498 7413 14526 2970 6523 152061
770 39 1766 19 456 637 3919 2066 773 36 371 1291 110 409 2297 319 331 15609
1999/00 Non Permanent Permanent 3790 4027 35058 1915 15614 8594 14647 6711 9863 820 2553 8120 5989 7775 14156 2847 5928 148407
720 26 1496 24 518 775 3784 1975 787 33 347 1141 91 437 2051 278 310 14793
Source: compiled from data supplied by WorkCover NSW
73
TABLE 2.3: VICTORIA FEMALES IN FULL-TIME AND PART-TIME EMPLOYMENT WHO EXPERIENCED AN INJURY, 1995/96 – 2000/01
Employment Status
1995/96 Full Part time time
1996/97 Full Part time time
Report Year 1997/98 1998/99 Full Part Full Part time time time time
1999/00 Full Part time time
2000/01 Full Part time time
Nature of Injury Fractures Fractures of vertebral column Dislocation Sprains/strains of joints and adjacent muscles Intracranial inj. incl. Concussion Internal inj. of chest, abdomen and pelvis Traumatic amputation, incl. loss of eyeball Open wound not involving traumatic amputation Superficial injury Contusion, intact skin, crushing, not fracture Foreign body eye, ear, nose, resp, dig, repro sys. Burns Inj. to nerves and spinal cord without bone inj. Poisoning and toxic effects of substances Effects of weather and other external causes, nec Multiple injuries Damage to artificial aid(s) Other and unspecified injuries Diseases - brain, spinal cord and nervous sys. Disorders of roots, plexuses and single nerves Disorders of the eye Deafness Other diseases of the ear and mastoid process Arthropathies - disorders of joints Dorsopathies, disorders of the vertebrae and discs Disorders of muscle, tendons and soft tissues Osteopathies, chondropathies, acquired deformities
373 0 25 5061 43 6 19 192 39 287 0 35 0 19 23 21 5 35 11 0 1 159 0 0 15 298 13
64 0 3 731 2 0 6 42 2 33 0 14 0 1 1 5 0 3 2 0 0 0 0 0 5 47 3
422 0 43 5085 30 6 10 211 45 284 0 30 0 19 15 30 7 43 14 0 1 66 0 0 14 297 8
74 0 8 760 6 3 1 23 5 37 0 6 0 2 2 1 0 5 3 0 1 1 0 0 0 48 1
459 0 42 4759 33 5 18 195 60 284 0 37 0 17 19 24 5 43 9 0 3 38 1 0 16 271 8
59 0 7 745 5 1 0 33 6 56 0 8 0 3 3 4 0 3 3 0 0 2 0 0 3 40 1
395 6 37 4826 28 8 16 222 93 359 10 49 4 16 6 36 0 75 20 9 2 50 4 18 31 382 7
81 1 8 848 4 1 1 27 19 50 3 4 2 3 3 1 0 15 1 4 0 2 0 2 7 73 3
478 4 67 4760 37 5 19 205 91 360 11 40 8 14 10 34 0 76 12 8 2 32 3 15 30 381 4
79 0 14 907 2 1 1 29 21 53 1 4 1 2 4 3 0 6 0 5 0 1 0 4 4 58 2
405 6 46 4998 30 2 16 183 126 308 9 27 12 22 13 18 0 74 15 135 3 27 4 14 38 353 5
103 2 6 1023 4 0 5 35 31 41 0 7 5 6 3 5 0 14 0 21 0 0 0 1 12 55 1
74
Employment Status
1995/96 Full Part time time 25 0 0 0 7 2 30 1 1 0 0 0 1 0 0 0 10 2 14 0 0 0 0 0 19 2 3 1 2 0 4 0 0 0 1 0 0 0 3 0 0 0 1 0 1 0 649 56 3 0 0 0
Contact dermatitis Other and unspecified dermatitis or eczema Other diseases of skin and subcutaneous tissue Hernia Diseases of the dig sys. and ass. glands Intestinal infectious diseases Specified zoonoses Viral diseases Other infectious / parasitic diseases Asthma Legionnaires disease Resp conditions due to substances Other diseases of the resp sys. Ischaemic heart disease Other heart disease Cerebrovascular disease Arterial disease Hypertension (high blood pressure) Varicose veins Other diseases of circulatory sys Malignant neoplasm of lymph and blood Other malignant neoplasms and carcinomas Benign neoplasms Mental disorders Other diseases Not known Source: compiled from data supplied by WorkSafe Victoria
1996/97 Full Part time time 19 3 0 0 14 1 39 3 1 0 2 0 0 0 0 0 21 4 6 0 0 0 0 0 14 1 5 0 2 0 5 1 0 0 5 1 0 0 1 0 0 0 0 0 2 0 767 46 4 0 0 0
1997/98 Full Part time time 23 5 0 0 8 2 35 11 2 0 4 1 1 0 0 0 18 1 7 0 0 0 0 0 14 1 2 0 1 1 0 1 1 0 5 3 0 0 3 0 0 0 0 0 1 0 658 57 3 1 0 0
1998/99 Full Part time time 13 2 7 0 13 4 34 7 3 0 1 0 0 0 2 3 10 1 15 3 1 0 8 1 7 2 3 1 6 0 2 0 0 0 0 1 1 1 3 1 0 0 0 0 2 0 765 70 30 7 6 2
1999/00 Full Part time time 7 3 7 0 11 4 42 4 2 1 1 0 0 0 2 1 1 2 5 1 1 0 9 0 10 1 0 0 3 1 2 0 2 1 6 0 2 1 3 1 1 0 0 0 3 0 886 106 22 1 8 2
2000/01 Full Part time time 16 3 6 1 21 3 28 1 2 1 4 0 2 0 6 1 8 0 9 2 1 0 12 1 12 5 4 0 3 0 4 0 0 0 3 1 2 0 3 0 1 0 1 0 3 1 1083 180 15 4 3 0
75
TABLE 2.4: VICTORIA MALES IN FULL-TIME AND PART-TIME EMPLOYMENT WHO EXPERIENCED AN INJURY, 1995/96 – 2000/01 Report Year 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 Employment Status
Full time
Part time
Full time
Part time
Full time
Part time
Full time
Part time
Full time
Part time
Full time
Part time
Nature of Injury Fractures Fractures of vertebral column Dislocation Sprains/strains of joints and adjacent muscles Intracranial inj. incl. concussion Internal inj. of chest, abdomen and pelvis Traumatic amputation, incl. loss of eyeball Open wound not involving traumatic amputation Superficial injury Contusion, intact skin, crushing, not fracture Foreign body eye, ear, nose, resp, dig, repro sys. Burns Inj. to nerves and spinal cord without bone inj. Poisoning and toxic effects of substances Effects of weather and other external causes, nec Multiple injuries Damage to artificial aid(s) Other and unspecified injuries Diseases - brain, spinal cord and nervous sys. Disorders of roots, plexuses and single nerves Disorders of the eye Deafness Other diseases of the ear and mastoid process Arthropathies - disorders of joints Dorsopathies, disorders of the vertebrae and discs Disorders of muscle, tendons and soft tissues Osteopathies, chondropathies, acquired deformities
1911 0 115 11610 92 38 259 1507 259 1083 0 184 0 64 66 105 24 131 31 0 35 2499 0 0 87 349 31
75 0 5 250 2 0 5 53 3 21 0 3 0 1 2 3 0 1 0 0 0 4 0 0 2 9 0
1806 0 134 11715 89 32 242 1578 309 1085 1 189 0 79 82 114 22 145 19 0 19 1507 0 0 71 314 26
63 0 5 268 5 0 5 29 4 24 0 6 0 2 0 2 2 4 0 0 0 5 0 0 0 6 0
1737 1 135 11124 74 30 191 1580 268 1133 1 169 0 87 85 112 12 122 20 0 10 1104 1 0 52 321 25
45 0 4 242 9 0 0 50 3 32 0 2 0 2 0 5 1 1 4 0 0 4 0 0 0 6 0
1697 23 155 11358 58 44 181 1536 360 1258 75 200 17 68 26 111 5 227 31 15 8 678 21 17 79 551 6
57 2 6 222 3 1 10 53 11 34 2 9 0 1 2 6 0 7 2 0 0 4 0 1 4 23 0
1807 25 146 11371 73 50 193 1487 378 1073 120 191 26 72 28 110 1 202 22 14 9 680 7 15 74 595 10
80 1 4 288 3 3 8 51 18 43 4 9 1 2 0 4 0 7 0 2 0 2 0 1 1 16 0
1741 41 150 11292 79 39 178 1354 359 1082 79 159 19 48 37 91 3 236 19 177 5 753 17 30 82 485 10
87 2 6 339 5 2 8 54 15 35 1 6 1 3 0 10 0 4 0 3 1 5 0 0 2 20 0
76
1995/96 Employment Status Contact dermatitis Other and unspecified dermatitis or eczema Other diseases of skin and subcutaneous tissue Hernia Diseases of the dig sys. and ass. glands Intestinal infectious diseases Specified zoonoses Viral diseases Mycoses Other infectious / parasitic diseases Asthma Legionnaires disease Asbestosis Resp conditions due to substances Other diseases of the resp sys. Ischaemic heart disease Other heart disease Cerebrovascular disease Arterial disease Hypertension (high blood pressure) Varicose veins Other diseases of circulatory sys Malignant melanoma of skin Malignant neoplasm of lymph and blood Other malignant neoplasms and carcinomas Benign neoplasms Neoplasms of uncertain behaviour/nature Mental disorders Other diseases Not known
Full time
53 0 46 1014 9 3 28 0 0 25 44 0 0 0 50 72 51 26 11 31 0 22 0 0 10 4 0 823 12 0 Source: compiled from data supplied by WorkSafe Victoria
1996/97
Part time
0 0 1 14 0 0 1 0 0 1 1 0 0 0 1 2 1 0 0 0 0 0 0 0 0 0 0 10 0 0
Full time
40 0 49 970 6 4 21 0 0 27 18 0 0 0 39 74 62 25 6 22 1 20 0 0 12 4 0 868 10 0
1997/98
Part time
0 0 0 13 0 0 0 0 0 0 0 0 0 0 1 3 2 1 0 0 0 0 0 0 0 0 0 12 0 0
Full time
45 0 52 1009 6 2 5 0 0 38 17 0 0 1 35 65 43 25 6 24 0 9 1 0 13 5 0 785 11 0
1998/99
Part time
2 0 0 20 0 0 0 0 0 1 1 0 0 0 0 2 0 1 0 1 0 0 0 0 0 0 0 12 0 0
Full time
38 14 29 875 14 5 3 6 0 13 31 5 5 41 21 43 76 8 3 9 11 15 10 2 8 3 2 892 40 20
1999/00
Part time
2 0 0 16 0 0 0 0 0 2 2 0 0 1 1 1 2 0 0 0 0 0 0 0 0 0 0 16 0 0
Full time
34 11 37 933 11 6 0 8 1 15 27 7 5 40 16 40 49 7 4 4 9 16 3 1 5 1 1 912 47 18
2000/01
Part time
1 0 1 16 0 0 0 0 0 3 0 0 0 1 0 2 2 1 0 0 0 1 0 0 0 0 0 20 3 0
Full time
38 16 28 824 7 1 18 5 0 17 27 10 3 29 16 40 49 13 3 4 10 23 5 0 6 1 1 1074 28 13
Part time
1 0 2 14 1 0 0 0 0 0 0 0 0 1 0 3 2 0 0 0 0 0 0 0 0 0 0 37 1 1
77
Table 2.5: NEW SOUTH WALES – WORKERS COMPENSATION CLAIM COSTS BY PART-TIME/FULL-TIME EMPLOYMENT STATUS 1997/98-1999-2000 Sum
1997/98 Mean
Median
Sum
Gross Cost Incurred 1998/99 Mean
Median
Sum
1999/00 Mean
Median
Workplace Industry anzsic Agriculture, forestry and fishing Mining Manufacturing Electricity, gas and water supply Construction Wholesale trade Retail trade Accommodation, cafes and restaurants Transport and storage Communication services Finance and insurance Property and business services Government administration and defence Education Health and community services Cultural and recreational services Personal and other services Total Total
37,100,000 11,190,000 50,850,000 4,889,383 230,500,000 13,090,000 20,460,000 635,771 131,900,000 8,049,653 59,700,000 3,826,007 78,640,000 11,280,000 32,180,000 9,960,034 78,310,000 8,458,594 6,114,682 687,878 17,580,000 1,192,407 60,280,000 9,071,448 24,580,000 330,438 48,750,000 1,278,674 91,770,000 6,716,952 22,810,000 2,092,183 40,280,000 2,111,199 1,032,000,000 94,860,000
11,127 9,628 10,037 14,423 5,654 4,349 9,612 13,245 8,994 10,922 7,374 5,285 5,150 4,116 5,737 4,476 7,353 8,450 8,197 6,142 5,655 5,678 7,626 7,054 5,421 3,631 6,817 4,753 6,254 5,203 7,132 5,179 6,274 5,800 6,730 5,924
1,239 1,497 777 1,177 620 518 1,142 1,233 1,034 1,455 793 666 700 500 761 500 1,168 1,177 944 1,953 1,100 693 1,172 889 883 575 1,000 700 1,189 838 711 551 1,000 1,052 863 700
36,040,000 8,663,318 34,580,000 2,712,531 219,600,000 11,640,000 20,850,000 186,287 135,300,000 6,279,306 52,010,000 4,247,740 79,720,000 11,080,000 41,340,000 10,120,000 75,190,000 6,733,210 4,315,968 495,190 18,070,000 1,170,467 65,940,000 9,565,954 27,020,000 826,392 36,930,000 1,014,267 94,080,000 4,846,037 16,940,000 1,604,836 38,150,000 2,026,590 996,100,000 83,210,000
9,452 9,867 8,811 9,757 5,933 5,017 10,310 5,821 8,815 9,414 6,122 5,509 5,097 4,045 6,451 5,227 7,473 7,171 4,995 6,603 6,173 6,926 7,648 7,187 4,916 7,445 4,874 4,140 5,914 5,296 5,676 5,262 5,857 5,943 6,484 5,922
1,196 1,500 837 986 677 518 1,158 1,558 1,133 1,317 798 739 718 579 800 542 1,173 1,000 1,030 1,351 1,285 862 1,000 845 716 895 669 663 974 750 872 855 864 1,000 850 720
41,070,000 8,510,280 40,930,000 2,387,798 252,100,000 10,990,000 18,870,000 477,996 171,800,000 9,003,283 65,520,000 5,514,805 98,030,000 10,590,000 48,520,000 9,827,424 85,830,000 7,993,075 8,760,389 713,567 20,030,000 609,265 70,950,000 7,738,826 32,840,000 640,624 47,640,000 802,489 109,600,000 5,545,082 21,180,000 1,927,755 45,660,000 3,278,444 1,179,000,000 86,550,000
11,077 10,611 10,932 7,728 7,304 5,399 9,984 9,755 11,215 11,115 7,731 6,169 6,152 4,242 7,307 4,806 8,809 8,822 10,749 18,778 7,198 5,207 9,017 5,560 5,483 7,118 5,950 3,896 7,182 5,837 7,468 6,670 7,762 9,235 7,893 6,279
1,173 1,659 955 979 830 617 1,355 802 1,499 1,513 1,000 903 801 650 820 592 1,379 1,257 1,453 2,863 1,417 1,230 1,295 906 962 676 1,005 608 1,307 835 967 730 1,075 1,241 1,023 801
1,127,000,000
6,653
844
1,079,000,000
6,437
838
1,266,000,000
7,757
1,000
Full-time employment
Part-time employment
Source: compiled from data supplied by WorkCover NSW
78
Table 2.6: NEW SOUTH WALES – WORKERS COMPENSATION CLAIM COSTS BY PERMANENT/NON-PERMANENT EMPLOYMENT STATUS 1997/981999-2000 Sum
1997/98 Mean
Median
Sum
Gross Cost Incurred 1998/99 Mean
Median
Sum
1999/00 Mean
Median
Workplace Industry anzsic Agriculture, forestry and fishing Mining Manufacturing Electricity, gas and water supply Construction Wholesale trade Retail trade Accommodation, cafes and restaurants Transport and storage Communication services Finance and insurance Property and business services Government administration and defence Education Health and community services Cultural and recreational services Personal and other services Total Total
38,790,000 9,492,435 55,130,000 612,521 234,000,000 9,563,689 20,780,000 321,220 134,600,000 5,366,551 59,830,000 3,688,013 76,350,000 13,570,000 33,130,000 9,014,908 80,130,000 6,637,196 6,493,532 309,029 16,260,000 2,513,802 56,180,000 13,170,000 24,610,000 305,311 47,890,000 2,137,661 84,380,000 14,100,000 19,190,000 5,714,094 40,390,000 2,009,568 1,028,000,000 98,530,000 1,127,000,000
10,800 10,500 10,277 14,940 5,601 4,801 9,669 11,472 9,004 11,769 7,265 6,326 5,333 3,675 5,878 4,100 7,351 8,850 7,968 7,187 5,686 5,477 7,207 9,437 5,408 4,017 6,846 5,030 6,391 5,104 5,973 14,652 6,240 6,420 6,727 5,968 6,653
1,274 1,401 804 1,064 615 537 1,132 2,400 1,039 1,418 783 756 703 550 790 500 1,178 1,045 1,000 1,500 1,100 900 1,115 1,111 879 655 1,000 1,000 1,205 922 726 500 1,000 948 861 707 844
36,460,000 8,247,443 36,720,000 577,883 221,700,000 9,557,720 20,900,000 131,608 136,700,000 4,935,887 52,660,000 3,592,853 75,240,000 15,560,000 39,800,000 11,660,000 75,680,000 6,238,032 4,530,815 280,343 16,990,000 2,247,232 63,190,000 12,320,000 27,230,000 621,247 36,260,000 1,691,297 86,450,000 12,480,000 16,870,000 1,672,889 38,140,000 2,036,815 985,400,000 93,850,000 1,079,000,000
9,298 10,711 8,818 14,818 5,901 5,412 10,271 6,927 8,782 10,824 6,103 5,640 5,204 3,969 6,340 5,642 7,400 8,070 5,018 7,787 6,235 6,057 7,295 9,544 4,952 5,648 4,891 4,135 5,951 5,433 5,680 5,244 5,847 6,154 6,481 6,012 6,437
1,171 1,777 855 1,020 671 566 1,142 2,864 1,129 1,764 787 913 713 617 769 600 1,147 1,261 1,040 2,338 1,245 1,350 951 1,217 720 732 670 627 985 800 866 968 860 1,264 844 790 838
41,120,000 8,460,746 43,050,000 265,386 253,200,000 9,923,880 19,100,000 252,063 174,500,000 6,298,714 66,240,000 4,789,929 91,510,000 17,110,000 47,390,000 10,960,000 87,760,000 6,062,664 8,914,219 559,737 18,630,000 2,017,348 70,040,000 8,653,826 33,050,000 433,649 46,640,000 1,799,776 104,000,000 11,090,000 21,010,000 2,101,142 46,000,000 2,935,040 1,172,000,000 93,720,000 1,266,000,000
10,850 11,751 10,690 10,207 7,222 6,634 9,972 10,503 11,178 12,160 7,708 6,181 6,248 4,522 7,062 5,549 8,898 7,704 10,871 16,962 7,295 5,814 8,625 7,584 5,518 4,765 5,999 4,118 7,349 5,407 7,379 7,558 7,761 9,468 7,899 6,335 7,757
1,138 2,110 947 2,705 820 681 1,332 886 1,492 1,735 1,000 821 820 653 824 570 1,404 1,021 1,481 2,520 1,385 1,582 1,230 1,122 960 1,000 1,009 756 1,339 940 960 800 1,066 1,484 1,023 830 1,000
Permanent employment Non-permanent employment Source: compiled from data supplied by WorkCover NSW.
79
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
the matching of claims incidence for particular types of work such as part-time or temporary/non-permanent workers weighted by hours workers and overall employment levels for these categories in order to determine relative risk. The data is simply presented in order to indicate that such an investigation may be undertaken assuming these data sets are reasonably accurate (something that would be need to investigated given other evidence presented in this report). Table 2.5 and 2.6, which deal with claim costs, do permit some comparisons to be made at least in terms of average and median costs unless it can be shown that the cost profile of unreported injuries and diseases differs substantially in terms of employment status from reported claims. Table 2.5 indicates some minor differences in the mean and median costs of workers’ compensation claims by part-time and full-time employees in the three years to 1999/2000. The overall mean and median cost of claims by part-time workers was below that of full-time workers. There appear to be no substantial inter-industry differences in this pattern. With regard with permanent/non-permanent employees (Table 2.6) the situation is rather more complicated. Again, the overall mean and median cost of claims for non-permanent workers is below that of permanent workers for all three years. However, there is more variation in the experience of particular industries. In one industry (construction) the mean and median cost of claims for non-permanent workers exceeds that for permanent workers in all three years and in personal and other services the same applies except for median costs in 1997/98. In a number of others (agriculture, forestry, fishing; mining; electricity, gas and water; transport and storage; communications; property and business services) the mean and median costs of claims by non-permanent workers exceed those of permanent workers for two of the three years. In mining and communication services the mean cost of claims by nonpermanent workers over the three years significantly exceeds that of permanent workers. For some industries at least, it appears that the mean and median cost of claims is higher for nonpermanent workers. Caution is needed in interpreting results for just three years but the pattern warrants further investigation, especially in the light of the US evidence referred to above. More persuasive evidence has recently become available in relation to labour hire workers. In 2001 WorkSafe Victoria commissioned Elsa Underhill (Victoria University of Technology) to analyse OHS outcomes for labour hire workers using workers’ compensation data for the period 1994-2001. Underhill assessed a range of measures. First, Underhill compared total remuneration data (a crude proxy for employment levels) with the number of claims over time. She found that total remuneration increased in real terms by 291% between 1994/95 and 2000/01 while the number of workers’ compensation claims by labour hire workers increased by 365% (or from 236 to 861) during the same period (Underhill, 2002:39). By way of contrast, total remuneration for non-labour hire workers increased by 19% in real terms during the same period while the number of workers’ compensation claims remained fairly constant, with a small decline in 2000/01. In other words, the rapid growth of the industry was associated with a more than commensurate increase in workers’ compensation claims at the same time that the number of workers’ compensation claims by non-labour hire workers was indicating no measurable increase. These findings are broadly consistent with analysis of workers’ compensation claims by labour hire workers undertaken in South Australia and referred to elsewhere in this report. 80 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
Second, Underhill examined claim frequency rates for the year 1999/2000. Using ABS workforce survey data she estimated that 3.47% of labour hire workers made workers’ compensation claims in this year, compared to 1.85% of other Victorian employees (Underhill, 2002: 42). This suggested a much higher claims rate for labour hire workers although this needs to take account of the concentration of these workers in a narrower band of occupations (disaggregated analysis by occupation was not possible due to high error rates in the ABS data). An aggregate comparison for the period 1994/95 to 2000/01 based on total remuneration (rather than workforce numbers) also indicated a higher claim rate for labour hire workers than non-labour hire employees. Third, examining the agency of injury Underhill found labour hire workers faced a much greater likelihood of being hit by or hitting moving objects resulting in a higher level of wounds and crushing. They also experienced more trips and falls in occupations requiring mobility at the workplace as well as a higher level of repetitive strain injuries amongst clerical workers (Underhill, 2002: 5). Fourth, in terms of claim duration Underhill (2002: 5) found that labour hire workers were responsible for a lower level of claims requiring less than 10 days off work but a higher level of claims requiring up to one year’s compensation (she acknowledges reporting effects might affect this finding). In sum, a number of examinations of workers’ compensation data in the USA provide evidence of an association between precarious employment and inferior OHS outcomes. In Australia, with the exception of Underhill, no comparable analysis has been undertaken. However, the data collected for this report indicates that more detailed analysis is both possible and warranted as long as the caveats of limitations with this data (including reporting effects) are recognised. These are long terms changes and the evidence will become more compelling over time Given its focus on the future there is little that can be said in relation to this possibility. Two observations based on earlier comments can be made. First, the reconfiguration of worker’s compensation regimes, coronial censuses and the like are reconfigured to take more explicit account of employment status would make it easier to identify and chart such a trend. Second, such a reconfiguration would need to involve not simply changing the rules to claims recording etc but also scrutinizing reporting procedures and the coverage/eligibility provisions of workers’ compensation regimes to address the problems identified above. Even these changes would not address some problems such as the difficulty of tracking hazard exposures where an increasing proportion of the workforce are changing jobs on a regular basis. Putting the debate into context It is important to put criticisms of the methodological problems facing research into precarious employment into context. Indirectly if not explicitly, this research has highlighted some important methodological flaws in previous OHS research. Research into precarious employment is leading to a greater recognition of reporting effects. This includes an increased questioning of the use of workers’ compensation-based data – at least without considerable and explicit reservations. There is also growing recognition that the health impacts of organisational downsizing may be masked or complicated by the over-representation of older and less healthy workers amongst those displaced and a reluctance of surviving workers to 81 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
report illness or take absence for fear this will endanger their job. It may also lead to increased claims amongst those whose fate has already been decided. Further, it is now increasingly clear that the exclusion of temporary workers from the survey population (based on a particular workplace, company or group of employers) – a practice often at best only glibly acknowledged by researchers (usually on the basis of inadequate medical records. See van Poppel et al, 1998) could constitute a serious source of bias to any interpretation of OHS indices or intervention measures designed to modify this or worker rehabilitation. While it is acceptable, indeed useful, to express injury or disease incidence in terms of equivalent full-time workers (requiring a recalculation where workers are employed for shorter hours) the findings of research on precarious employment indicate that disaggregated comparisons are also warranted. I am also unaware as to whether similar conventions are devised where workers are employed well beyond the hours normally ascribed to full-time work. But even if they were it is well known that excessive hours can pose particular risks. Given this, and the clear connection between very long hours and some groups of precarious workers (like long distance truck drivers, home-based garment makers etc), there is another ground for disaggregating groups so any significant disparity amongst them in terms of incidence can be clearly identified. In some cases methodological bias appears less accidental than a reflection of dominant managerial interests. For example, it seems more than coincidental that within the psychological literature on downsizing and organisational restructuring (de-regulation, privatization etc) the majority of studies appear to focus on the moderating effects of interventions (like counselling, social support etc) rather than measuring the overall adverse health effects. In some cases the very language used is revealing. Thus a study by Lim (1997) evaluated the provision of support in terms of moderating worker dissatisfaction and ‘noncompliant job behaviour’ (this study was also based on MBA alumni who, as Platt et al, 1998:23 point out are hardly representative of workers affected by labour market change). The growth of precarious employment may also require modification of other research agendas, including growing bodies of research on the OHS implications of an ageing workforce, and women’s OHS (for example, to take more explicit account of the overrepresentation of young workers and women in temporary jobs, Quinlan, 1998:7). It should also cause us to question the focus and orientation of the extensive research literature on shiftwork and occupational stress. In both cases we would suggest researchers have tended to focus on occupations that are unrepresentative of the workforce undertaking shiftwork or at risk of occupational stress either in terms of the type of work (this has been recognised) but also, and perhaps more importantly, in terms of employment status. Virtually all the shiftwork and occupational stress literature examines full-time workers in jobs that are presumed to be ongoing (although the occupational stress literature is now examining downsizing). This can be seen in the selection of occupations for studies. Even where some popular targets of shiftwork research, such as nurses, have experienced a significant growth in casualisation, part-time employment and outsourcing, with rare exceptions these changes have gone unrecognised. More important perhaps, we can readily identify a number of industries such as hospitality and retailing that employ substantial numbers of workers in shift arrangements and where many of these hold part-time or temporary posts. Elaborate debates amongst shiftwork researchers over the ‘best’ shift system may have little relevance to temporary workers whose shifts may be altered at a moment’s notice or workers holding multiple jobs.
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In other industries involving shiftwork, like road transport and mining, the use of contractors is already widespread or is growing (depending on the countries involved) and outsourcing/labour-hire arrangements is extending this to other areas (like stevedoring, rail and air-transport). It is also worth noting that ‘flag of convenience’ shipping (ie ships registered in countries with low safety/labour standards) has created a precariously employed maritime workforce (fishermen are another precariously employed group working nonstandard hours). Similar trends are emerging in other sectors like the use of ‘leased labour’ flight attendants by some airlines. There is a pressing need for research into the proportion of shiftworkers who are also precariously employed (presuming shiftwork itself is not defined as precarious) and to ensure more representative research is undertaken on hitherto neglected groups. Equally, those researchers whose principal interest is precarious employment need to take more account of the timing of work and the consequent effects on balancing of work/non work responsibilities. Conclusion and policy implications of this evidence While a number of important gaps remained to be filled and some substantive/conceptual issues addressed, there is now a very persuasive body of evidence that, with the possible exception of permanent part-time work, a number of flexible work arrangements are associated with a significant and measurable deterioration in OHS indices. Indeed, by the standards of most reviews of the scientific research on particular issues the outcomes of this review was especially decisive. Around 60% of studies favouring a particular set of results would normally be regarded as sufficient to draw conclusions but in this case the weight of evidence is far higher (at around 90% of those study where an outcome is measurable). This review is based on studies over a 35 year period and while the number of studies has grown rapidly this has not altered the ratio of results. Tracking the record back to studies done prior to the major shift to more flexible work arrangements in the 1980s and 1990s effectively negates any suggestion that the problem has simply been ‘discovered’ to support opposition to flexible work arrangements. Since the review includes a very large number of studies carried out in many countries and using a variety of research methods the results cannot be attributed to selection bias (and indeed a recent editorial in the Scandinavian Journal of Work Environment and Health labeled an earlier and smaller published version of this review as ‘a comprehensive overview of recent research on precarious employment’. Aronsson, 2001:36164). In short, the overwhelming weight of evidence is that a number of more flexible work arrangements pose a serious threat to OHS. This finding is generally consistent with conclusions drawn by others. For example, in a recent review of the psychological consequences of job insecurity De Witte (1999:155) concluded that the literature showed that job insecurity ‘reduces psychological well-being and job satisfaction, and increases psychosomatic complaints and physical strains’. Unless reference can be made to overwhelming flaws in this research (remarkable given its publication in leading scientific journals) and an equally persuasive body of contrary evidence identified, this evidence needs to be recognized and addressed if there is to be a constructive debate over policy developments and appropriate interventions. Compelling evidence of the adverse health effects of job insecurity may surprise many, especially advocates of greater labour market flexibility. It should not. While most of the studies reviewed here were undertaken over the last decade, similar evidence was available much earlier (see, for example Brenner 1979; Catalano and Dooley, 1979; Kasl and Cobb, 83 --
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1979; Nelson, 1957; Owens, 1966). Longstanding extensive evidence on the adverse health effects of unemployment (see Jahoda 1933,1982; Fryer 2000; Morrell et al 2001; Harris and Morrow, 2001; Bohle et al 2001) should have provided clues, especially since some of these studies noted the significant psychological burden imposed on workers during often prolonged periods of uncertainty preceding job loss (see Joelson and Walquist, 1987). These findings raise serious questions for policy makers. Policies based on the simple assumption that more flexible working arrangements will reduce unemployment and generate a net benefit to the community are very narrowly conceived and seriously flawed (see Watts and Mitchell, 2000). A much wider range of social and economic costs must be considered, of which the array of health effects produced by job insecurity is just one set. It is also important to recognise that the variables associated with job insecurity do not have simple, independent effects. Instead, they form complex interactions, of which there are many examples. Health has a selection effect, in that workers with health problems are more likely to be laid off and to have greater difficulty finding new employment (Mastekaasa, 1996). Successive periods of unemployment are likely to compound this effect. There are also likely to be hidden effects of increased volatility in the labour market because a substantial proportion of the workforce will only be able to aspire to a succession of casual and temporary jobs. There is evidence that workers who are re-employed after losing better quality jobs are likely to experience downward occupational mobility and greater job insecurity (see for example Claussen et al., 1993). The long-term health effects of losing an apparently secure job, enduring a brief period of unemployment and being re-employed into a secure job are likely to be very different from those of either long-term unemployment or short cycles of insecure employment interspersed with bouts of unemployment. There is mounting evidence that job insecurity (and precarious employment) is associated with other externalities borne by the community, a number that involve health effects (although indirectly related to work processes). A recent study commissioned by the Committee for the Economic Development of Australia (CEDA) by Hancock et al (2001) noted that workers in a succession of insecure jobs are unable to obtain the secure income stream necessary to buy a house or to establish a viable superannuation fund for their retirement. In countries with unemployment insurance schemes such as the USA and France recent studies point to a growing number of workers either exhausting their entitlements or, in the case of precarious workers, failing to achieve eligibility (for reference to a French report on this see eironline 28 July 2000). Job insecurity may also effect the education and health workers can provide for their children. For example, a Canadian study found the job insecurity of parents indirectly affected the grade performance of their children ‘through effects on beliefs in an unjust world and negative mood’ (Barling and Mendelson, 1999:347). There is even some evidence that work arrangements will affect the decision to have children. A recent Quebec study of found on-call workers were putting off having a family because it was seen as incompatible with being oncall (Messing and Seifert, 2002). Other externalities, such as loss of training and human capital development are beyond the province of this report (although the immediate effects of reduced training to OHS are discussed). However, it is worth noting that in a recent newsletter the Swedish Council for Working Life and Social Research (2002: 1) – the government’s major funding agency for working life research – argued that widespread job losses, job insecurity and stressful changes to work organisation were associated with an increasing level of ill-health and burnout in a 84 --
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range of professional groups. The Council noted that both long-term sick listing and early retirement had increased dramatically in recent years, at a total (direct) cost of around 110 billion kroner (or over A$20 billion) per annum.
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Chapter 3 Why do these work arrangements undermine OHS? 3.1 Introduction As noted earlier, if successful strategies are to be developed in relation of changing employment relationships it is essential to recognise not only the extent of these problems but why they arise. Identifying the underlying causes will help in the selection and modification of strategies that are most likely to succeed because they can are not merely focusing on symptoms of the problem and can better anticipate what is likely to reshape workplace behaviour (and perhaps as importantly what types of interventions are likely to be ignored or thwarted). The reasons why contingent work leads to inferior OHS outcomes are still poorly understood. More than half of the studies reviewed either overlooked causality or accorded it only cursory consideration. Nevertheless, existing theory and empirical evidence provide valuable clues as to the characteristics and correlates of contingent work that lead to OHS disadvantages. The remainder of this chapter is devoted to an examination of this evidence. In general, psychological research has focused on the impact of contingent work on health and wellbeing, rather than safety (see Quinlan et al., 2001). An example of this is growing research on the relationship between job insecurity/contingent work and psychological contracts (see for example, Smithson and Lewis, 2000; Jackson, 2000). The notion of a psychological contract encapsulates the idea that the employment contract contains a number of implicit understandings or worker perceptions about reciprocal rights, obligations and exchanges. For example, workers may expect job security in return for loyalty to the employer. Unilateral changes to employment conditions by employers that are seen to breach this psychological contract can result in behavioural changes on the part of workers or effects on their satisfaction, health and wellbeing. The notion of psychological contracts could be used to examine some safety as well as health effects of contingent work. For example, it may be worth exploring whether a breach of the psychological contract can be used to explain the connection some writers have drawn between downsizing/contingent work and increased workplace aggression (Neuman amd Baron, 1998). At the same time, it is by no means clear this approach will be sufficiently encompassing in these situations. In his study of the impact of hospital downsizing on assaults on staff Snyder (1994) argued that the increasing rate of admissions in conjunction with ward closures meant only the most psychiatrically needful patients were accommodated. This, in combination with the discontinuation of special programs for aggressive/chronically-impaired subgroups, resulted in a patient population more likely to engage in assaults than that prior to downsizing. It is possible to suggest that significant changes to workload, work intensity and work processes like those just described can be analysed in terms of their effect on the psychological contract but whether this is best or most direct way of understanding how such changes affect occupational safety is a moot point. Aside from psychological contracts, psychologists have proposed a number of other conceptual frameworks for understanding the relationship between contingent work and OHS. 86 --
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Aronsson (2000), for example, has proposed centre-periphery perspective that is analogous to dual labour market theory. This approach is more amenable to considering both health and safety effects, including effects on worker knowledge, compliance and access to entitlements under OHS legislation (see below). Leaving these explanations aside, the empirical literature on precarious employment/contingent work implicates a range of factors that can be grouped into three broad categories: economic pressures and reward systems, disorganization and lack of control and regulatory failure (Quinlan et al., 2001:344). 3.2 Economic/demand pressures and reward systems Available evidence indicates that contingent workers often work under considerable economic pressure due to job and income insecurity, intense competition for work (leading to underbidding on contracts) and task- or piece-based payment. Consistent with the wider evidence on incentive payment systems (for example, see Sunderstrom-Frisk, 1984; Brisson et al., 1989), it appears these pressures encourage hazardous work practices. These practices include working too long or too fast, ‘cutting corners’ in relation to safety (e.g. construction workers avoiding use of safety harnesses) and accepting hazardous tasks (e.g. ‘last-minute’ deliveries in road transport). Another practice that may be included under this heading is the practice of ‘offloading’ hazardous tasks via subcontracting arrangements to a lower cost operator (for references to this practice in Belgium see European Agency for Safety and Health at Work, 2002a: 41). Home-based garment workers, for example, have been found to report almost three times as many acute and chronic injuries as factory-based workers undertaking the same tasks (Mayhew and Quinlan, 1999). This difference appeared to arise from long working hours, itself a response to low earnings and task-based payment. Low payment or insecure income flows can induce self-employed subcontractors, such as building tradesmen or truck drivers, to take on too much work. In Australia and the USA, for example, there is a powerful body of evidence indicating that the use of trip-based payment systems in the long haul trucking industry - itself in part a response to intense competition or undercutting by owner drivers induce excessive hours of work, speeding, drug use and other hazardous practices (Hensher and Battellino, 1990: Henchser et al, 1991; Williamson et al 2000; Belzer 2000; Belzer et al 2000; and Quinlan, 2001). There is also US evidence that contingent workers earn on average far less than their non-contingent counterparts, and those with part-time jobs in particular (and contingent workers are twice as likely to be part-timers) are likely to enter into multiple jobholding – itself a growing phenomenon – to supplement their otherwise meagre income (Hipple, 2001). It is plausible that multiple jobholding could pose safety risks (due to travel time, task reorientation and added stress) above those associated with longer hours in the same job but as far as we aware this issue has not been the subject of systematic research. Another US study also indicates that over the past 20 years the burden of working at night and the risk of occupational injury have been increasingly borne by low wage workers (Hamermesh, 1999) but again we aware of no attempt to examine whether there is a connection between this and the growth of contingent work. However, these issues are worthy of investigation. There is research indicating that economic pressures not only induce self-employed subcontractors to work long hours but also affect their willingness to make compensation claims or take time off when injured, leading to an exacerbation of chronic injuries (Mayhew and Quinlan, 1997). While economic pressures may be most acute for self-employed 87 --
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subcontractors, outsourcing and labour-leasing arrangements can place indirect pressure on employees because their employers are operating on small profit margins or face uncertain work flows. As yet, there has been little research to explore these connections or the links if any between contingent work and the apparently significant growth of what Heery (2000:173188) has termed contingent pay systems that afford less security and stability and transfer risks to the worker. At the very least, both may be seen as altering employment relationships in a way that weakens the psychological contract between workers and their employers. Several studies have indicated that downsizing, outsourcing and temporary work are associated with work intensification that makes greater emotional or physical demands on workers to the detriment of their health and wellbeing. A number of studies have also found such pressures are conducive to occupational violence such as that inflicted by middlemen on home-based clothing workers or by JIT-dependent clients on truck drivers (Mayhew and Quinlan, 2000 and 2001). Contingent work may also reduce the additional resources, or ‘slack’ (see Cyert and March, 1963), in organisations that enable them to adapt to internal and external pressures, including unexpected interruptions to work flows. In a study of outsourcing in refuse collection, Gustafsson and Saksvik (2001) found that the reduction in slack had adverse effects on psychosocial work conditions, resulting in much higher levels of absence. We are unaware of other attempts to identify the implications of this phenomenon for the safety of contingent workers. However, Stoop and Thissen (1997) found that highly articulated transport systems with narrow windows for service or delivery, such as “just in time” (JIT), are not conducive to safety. Given the close association between JIT and outsourcing it is not unreasonable to suggest that this relationship may apply more generally. Indeed, in our own research on construction, trucking and other industries we are aware of incidents of a very similar nature. 3.3 Disorganisation and lack of control There is evidence that the use of contingent workers may contribute to hazardous forms of disorganization in the workplace, including under-qualification (a lack of training or inexperience), attenuated lines of inter-worker communication and management control and diminished ability of workers to play an active role in safety. The presence of temporary workers, subcontractors and other contingent workers can lead to potentially dangerous or unhealthy situations. Lack of familiarity with work arrangements has been identified as a significant risk factor in connection with outsourcing and temporary or leased workers. These suggestions are consistent with earlier French (see Dwyer, 1994) and US research on the additional risks posed when workers are new to jobs, change tasks or are young and inexperienced. For example, in a study of sawmill workers, Cooke and Blumenstock (1979:118-119) found younger workers and those assigned to temporary jobs were significantly more likely to experience serious injuries. Such findings are also consistent with research that identifies inexperience, lack of training and lack of supervision as major safety risks for young workers (see for example Knight et al, 1995; and Castillo et al., 1999, 520-21). Unfortunately, while several studies highlight the concentration of young workers in industries such as retailing and hospitality, few take the added step of analysing the interaction of age, employment status and tenure. The association between these three factors is also by no means simple. In a study of work injuries amongst adolescents Frone (1998) notes there are two conflicting hypotheses; one suggesting the experience associated with increased job tenure should reduce the occurrence of injuries while the other argues that longer tenure can entail assignment to more skilled, demanding and potentially riskier tasks. 88 --
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Results from a recent labour force survey (with 31,500 respondents) in Finland supported the former hypothesis. Comparing injury rates amongst permanent and fixed-term workers, Paananen and Votkola (2000: 101) concluded: The most important factor in this respect proved to be the ‘life-cycle’ of the employment relationship: fixed-term and permanent employees alike had most accidents at the beginning of the employment relationship but the risk of having them declined strongly as the relationship continued. However, in fields where a large number of employees had very short fixed-term employment contracts the risk of
accidents was greater than in other fields, because the starting or learning phase of work is the period when the risk is the highest. On the other hand, employees on very short fixed-term contracts also increase their skills with time, so remaining in the same field reduces the risk even for those on these types of employment contracts. Nonetheless, it is possible, and indeed available studies suggest, that both hypotheses could find support in different work situations. For example, in some industries like long haul trucking task structures do not change dramatically with tenure (or not in ways that present additional risks). A study by Belzer (2000 and Belzer et al 2000) found a strong association between recent employment truck of drivers and crashes (unlike Australia, the US long haul trucking industry employs a significant proportion of recently arrived immigrants and labour turnover rates in companies typically exceed 60% per annum and have reached over 200% in some on occasion). Belzer found that when the second largest trucking firm in the USA significantly increased its wage rates this was associated with an almost commensurate improvement in safety both due to the company being able to recruit higher quality drivers and a significant reduction in labour turnover. Frone’s (1998) own study found job tenure was positively related to work injuries although he also observes that close supervision may increase worker compliance, especially in the case of younger workers – a proposition supported by a study young temporary workers in the fast food industry (Mayhew and Quinlan, 2002). Deficiencies in knowledge may not simply arise through inadequate on-the-job training and inexperience. In some situations subcontracting has been seen to result in the use of less qualified workers and there is also the question of the fracturing of management knowledge and technical expertise. Downsizing and restructuring can also result in the loss of key technical expertise as well as experienced personnel (see for example ESSO’s relocation of all plant engineers to Melbourne in 1992 prior to the Longford explosion). Assessing the evidence from official inquiries into the Canberra Hospital implosion (1997), HMAS Westralian fire (1998) and Esso Longford explosion (1998) from an engineer’s perspective, Yates (2000:63-64) observed: In all three accidents, a lack of technical expertise was identified as contributing to the tragedies. The expertise was either lacking in the contract managers and contractors, or unavailable when required. In the hospital implosion, the ACT Coroner found that the officers appointed by the government-owned project director, Totalcare (TCL), to manage the contractor were asked “to undertake a function well beyond their experience, qualifications and skills.”…The lack of expertise is vividly illustrated in the risk assessment document prepared by the Project Manager in consultation Project Manager in consultation with TCL staff. The Coroner said that “None of those persons possessed any knowledge or
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experience in the implosion technique and (they) were unqualified to prepare a true risk assessment of the demolition. In analyzing the decision to replace the rigid fuel lines with flexible hoses on HMAS Westralia, the Naval Board of Inquiry found that there was no competent authority either within the Royal Australian Navy or the Project Manager, ADI, which “critically examined the wisdom of the intended course of action.” It concluded that “Key personnel within the RAN, and more particularly ADI Limited, were not adequately trained or qualified for the responsibilities placed on them. For example, the Westralia officer who was responsible for management of HMAS Westralia’s maintenance had not been trained in contract administration and had only completed a 2-3 day financial training course and a basic purchasing course. In analyzing the ESSO Longford explosion, the Royal Commission identified that access to technical expertise was limited and this may have contributed to the explosion. In 1992 Esso relocated all its plant engineers to Melbourne as part of restructuring. The Royal Commission noted that “The change appears to have had a lasting impact on operational practices at the Longford plant. The physical isolation of engineers from the plant deprived operational personnel of engineering expertise and knowledge which previously they gained through interaction and involvement with engineers on site. Moreover, the engineers themselves no longer gained an intimate knowledge of plant activities.”
A related aspect of disorganization identified by Yates (2000:64-65) was the failure to assess the competence of contractors in the Canberra Hospital implosion and HMAS Westralia explosion. During the examination of the hospital implosion, the ACT Coroner strongly criticized the selection process of contractors and subcontractors…There was a failure on the part of everyone present [TCL and PCAPL] to ensure that adequate objective checks of the contractor and explosives expert had been undertaken prior to approval of PACPL’s recommendation of the successful tenderer… In analyzing the HMAS Westralia fire, the Board of Inquiry concluded that the contractor may not have given the competency of the subcontractor the appropriate attention. This was because the subcontractor presented himself as a representative of a franchising hydraulic hose-fitting organisation which was known to be a supplier of high performance industrial hoses and held a quality system certification to Australian Standards AS3902. The representation “implied a depth of expertise and knowledge which the subcontractor could not, and did not, provide.”
While caution is required in generalizing conclusions from investigations into specific incidents it should be noted that essentially similar observations can be drawn from the research literature. Further, it is possible to identify a number of other serious incidents where similar problems can be identified. It would be potentially misleading to view such lapses as aberrant. What is of concern is that most serious incidents are investigated in isolation and few if any call in the type of OHS expert witness who might be able to allude to these patterns and connections so that more effective recommendations could be devised. Interviews conducted in the course of this project also referred to incidents or issues consistent with the observations just made about disorganization.
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Higher risks to new workers may arise not only from deficiencies in knowledge and experience (addressable through induction and closer supervision). In some instances, additional risk may arise via the need to acclimatize to a set of physically demanding tasks for which the worker was unprepared. For example, a recent Finnish study of assembly-line workers (Hakkanen et al, 2001:381-7) found that newly employed workers in hand intensive tasks had a higher risk of upper-limb and neck-shoulder disorders. Like many others, this study was not concerned to explore the role of employment status (though the level of temporary employment is growing rapidly in Finland). At the same time, drawing these observations and those made in the last previous paragraph together it is at least intuitively plausible that the growth of contingent work arrangements will pose additional OHS risks simply because it means more turnover in the labour market and hence more workers starting jobs (even if some are entering occupations the demands of which they are already familiar). Rebitzer’s large study of contract and direct hire workers in the petrochemical industry suggests several additional complications in the relationship between contingent work, task allocation, training and experience. Rebitzer (1995) found the higher ‘accident’ probability amongst contract workers compared to direct-hires was partially explained by the greater likelihood of contract workers engaging in higher risk tasks, to be less experienced and receive less safety training. Rebitzer (1995) also found that closer supervision by the hostplant led to lower injury rates amongst contract workers. Much of this in agreement with Frone, but he also found that the training and experience of contract workers was ‘less effective in reducing the risk of accidents (sic) than is that of direct-hire workers’ (cited in Kochan et al, 1994:70). This finding may indicate the need to more closely examine how training and experience shape the behaviour of different categories of workers, or what factors moderate the effects of training and experience (which could include things like economic and reward pressures already referred to). The relocation of tasks to isolated, small or less structured working environments where management control/protection is reduced and regulatory standards are less likely to have an effect may also be seen as a form of disorganization. Outsourcing to small business could be viewed as inviting this form of disorganisation although a less ambiguous example would be shifting to work into home-based settings. Aside from the risk of injury there is growing literature on the risks of occupational violence or sexual harassment that workers such as homecare providers may encounter (see Barling et al, 2001). Indeed, they appear to face a greater risk than their counterparts in hospital etc settings although more research is needed to confirm this. Despite presumptions to the contrary, some groups of women working in their own home may be at greater risk of occupational violence than counterparts doing the same work in a factory or office setting (Mayhew and Quinlan, 1999). Disorganization should not be seen simply as a product oversight but rather as a fundamental characteristic of the relationship between contingent workers and their employers. Use of temporary workers appears to affect employer attitudes to induction, training, participation in workplace committees and other activities that have implications for safety as well as other issues like productivity and quality. For example, a US study of leased workers by Feldman et al (1995:139) observed that despite increased litigation concerning the sexual harassment and safety of temporary workers - and to this could be added the likelihood of prosecution by OHS agencies (Johnstone et al, forthcoming) – the workers they surveyed frequently reported they had not received ‘clear instructions about their job duties or even cursory training in relevant procedures and equipment.’ The insecurity of temporary work also makes it more difficult for workers to raise or negotiate safety issues. A study by Aronsson (1999:439-460) 91 --
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based on a stratified sample (n=1,564) of the Swedish Labour Market Survey found temporary workers were more likely than permanent employees to report deficiencies in training and OHS knowledge. Temporary workers also believed their employment status inhibited their ability to raise issues and have their concerns treated seriously. Contingent work appears to have critical reporting effects in a number of areas, not all of them directly related to worker safety. For example, Jones and Arana (1996) argued the pessimism and negativity associated with downsizing led not only to more mistakes by healthcare workers but also a tendency to cover them up. These and other reporting effects are potentially critical and require careful investigation. Aronsson’s study supported the hypothesis that the weak labour market position of women, due to their concentration in contingent jobs, also rendered them liable to exclusion from discussion and negotiation over OHS (Aronsson, 1999:455). In the USA, Canada, Australia and other countries women and vulnerable minority groups (such as recent immigrants) as well as contingent work arrangements (such as part-time jobs) are over-represented in small business (see Manser and Picot, 2001) where union membership is exceptional and contact with government OHS agencies less frequent than is the case with larger employers. Available evidence countries such as the USA and Australia indicate that contingent workers are far less likely to belong to unions than non-contingent counterparts (see Campbell, 1996 and Hipple, 2001). Thus, they are denied an additional source of information and support in relation to safety. The use of temporary or leased workers and subcontractors may also promote higher levels of labour turnover and associated problems of worker commitment, outcomes that may be reinforced by management expectations (Saks et al., 1996; Lowry, 1998; Wilcox and Lowry, 2000). These factors may, in turn, contribute to safety problems although there appears to be no research directly exploring this connection. Taken together, a number of the above points on the disorganisation that results from a mismatch of demands and control at work has obvious parallels with Karasek’s (1979) demand/control model (just as the previous subsection on economic/reward pressures has clear parallels with the effort/reward imbalance model of Siegrist, 1996). In other words, as has been argued elsewhere (Quinlan et al, 2001) it could be proposed that workers in many precarious jobs are subject to high demands but received relatively low rewards for their efforts and are able to exert limited decision-latitude. Essentially similar observations are starting to emerge in both the literature and government reports. For example, in its discussion of evidence from the Netherlands a recent report on changing work arrangements prepared by the European Agency for Safety and Health at Work (2002a: 32) noted in relation to temporary workers: There is a lasting difference in job control: even when we take several other variables into account, workers with a non permanent contract have less autonomy in their work (Goudswaard et al, 1999 and 2000).
Even with regard to those who appear to exercise independent control, such as small business operators and own-account subcontractors, it could be argued that (drawing on Carayon and Zijlstra (1998) their legal independence is more apparent than real and their nominal task control pales into insignificance when measured against their limited resource and organisational control. As is clear from the above review, an increasing number of researchers have sought to examine work reorganization using the demand/control or effort/reward 92 --
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imbalance models. On the positive side, such an approach would be more attuned to measuring the health effects of these work arrangements, especially if the measures of job demands/control or efforts/rewards were modified to take more explicit account of things such as temporary employment or subcontractor status. Unfortunately, this far much of this work has concentrated on job insecurity and there have been comparatively few studies of outsourcing etc using this approach (for an exception see Netterstrom and Hansen, 2000). These issues could be readily addressed. 3.4 Regulatory Failure There is now growing recognition that contingent work presents a serious challenge to existing regulatory regimes designed to safeguard workers and provide compensation and rehabilitation for the injured (see Quinlan and Mayhew, 2000; Johnstone et al., in press). Until recently, OHS legislation and enforcementprograms in most countries were designed primarily for relatively secure and directly employed workers in large workplaces and single employer work sites. More attenuated and complex chains of command created by the use of subcontractors, leased labour, home-based workers and more ambiguous employment relationships present major challenges in terms of the form and implementation of laws. These arrangements are associated with more confusion about regulatory requirements (including who holds what duties) amongst employers. Compounding this is confusion amongst some groups of contingent workers, such as subcontractors or home-based workers, as to their employment status and associated legal rights and obligations in relation to OHS and workers’ compensation laws (for Canadian and Australian evidence on this see Bernstein et al, 2000 and Quinlan and Mayhew, 2000). The propensity for confusion is certainly not assisted by deliberate attempts to mislead workers as to their rights and entitlements as well inconsistent sets of definitions of ‘worker’ under different bodies of legislation (industrial relations, OHS, workers’ compensation and taxation) in the same jurisdiction. This confusion extends to temporary employees and is especially critical in terms of identifying the principal duty holders as well as rights to be involved in participatory mechanisms such as OHS committees (in so doing the latter further inhibits the capacity to protect their own interests as discussed in the preceding subsection on disorganisation). Regulators are slowly, and only partially, responding to this challenge. Another problem is that some categories of contingent workers (such as self-employed subcontractors and home-based workers) effectively fall outside the coverage of statutory labour standards on minimum wages and maximum hours of work. As already indicated inadequate payment or excessive hours of work can be associated with unsafe work practices but in most countries there is no legal recourse to address the issue in relation to the groups just mentioned. Regulatory coverage of some groups of contingent workers, such as teleworkers, is not only ambiguous but also complicated by differences in legal status (some are employees, others self-employed) and the location of work (some are home-based but others work from centres or even from multiple locations). Another regulatory problem associated with telework arises where the employer is located in a different jurisdiction from the worker’s home (see Cox et al, 2001). As noted in a European Union agency report, the growing practice of subcontracting telework services overseas, for example to India or Ireland, raises significant transnational regulatory issues (for a brief discussion of all these points see EFILWC, 1997). Further, minimum labour standards specified under legislation (or awards too in the case of Australia) have not been configured in a way that addresses particular problems such as those associated with multiple jobholding. For example, labour standards relating to maximum 93 --
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hours of work do not anticipate or address situations where an employee holds several parttime jobs (see Lippel, 1998), a worker holds both a part-time job and runs a business, or a worker who is engaged but one or more leasing agencies (or combines this with another job) and so may be able to undertake hours well beyond those specified for a single job. Contingent work arrangements can exacerbate reporting problems that, in turn, affect prevention, provision of treatment and occupational health services, and rehabilitation by employers and government agencies (for Australian evidence see Quinlan and Mayhew, 1999; Mayhew and Quinlan 2001a; and chapter 5 of this report). A study of the employment and compensation claim records for 769 contractors and 32,000 workers who constructed the Denver International Airport (Glazner et al., 1998; Lowery et al., 1998) revealed that injury rates were more than double those published by the Bureau of Labor Statistics. The discrepancy was most pronounced in relation to small firms (the study also indicated that injury rates were highest at the beginning of contracts, which is relevant to our earlier discussion of disorganization). In a similar vein, an earlier study of the US petrochemical industry (Kochan et al, 1994:70) found that both government (OSHA) inspectors and most plant managers lacked data on injuries to contract workers, and there were reliability problems with the data that was collected by some managers. Underreporting is but one symptom of a number of problems associated with the problematic relationship of contingent workers to workers’ compensation regimes. Even allowing for important regulatory/institutional differences between countries, available evidence suggests that in comparison with non-contingent workers, contingent workers are less knowledgeable about workers’ compensation, less likely to make a claim when injured, more likely to been denied access or have their claim disputed, and less likely to receive rehabilitation (Quinlan and Mayhew, 1999). One result of this is that contingent workers in some countries (excluding the USA) are more likely to have their medical costs and income support provided by public health insurance and social security rather than workers’ compensation providers. In the USA the absence of a universal health system (and lower membership of employer provided healthcare schemes amongst contingent workers) make such transfers less likely (see for example Herbert et al, 1999). Several US studies (Foley, 1998) have found that claim rates or costs are significantly higher for contingent workers than non-contingent workers. For example, a study of 5,125 worker’s compensation claims in the state of Minnesota by Park and Butler (2001) found compensation for leased/agency staff were around three times that of permanent full-time workers and the difference was even greater when controlling for worker characteristics (such as age). Notwithstanding these findings, there is still evidence that, as in other countries, the administration of workers’ compensation for various categories of contingent workers has proved problematic (Quinlan and Mayhew, 1999). The provision of occupational health services and rehabilitation/return to work by government agencies or private operators is also more problematic for contingent workers because, for example, it is more difficult to rehabilitate temporary workers logistically and such practices are less likely to get support from employers or other interested parties (Rondeau Du Noyer and Lasfargues, 1990). In a number of countries the legal obligations of employers to ‘take back’ temporary employees is virtually non-existent because the right to return to work is limited to the duration of the original contract. This is the case in Quebec, for instance, under An Act Respecting Industrial Accidents and Occupational Diseases, R.S.Q., c. A-3.-001 s.237 (I gratefully acknowledge the assistance of Katherine Lippel in providing this information). In Australia, the application of employment security provisions in workers’ compensation legislation to temporary workers is not always clear and, more importantly perhaps, available 94 --
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evidence (discussed later in this report) indicates enforcement of these provisions is far from rigorous so their practical effect can be doubted. As with prevention, regulatory failure to address contingent workers arises not simply from gaps in formal legislative coverage but also the absence or inadequacy of programs and activities designed to give practical effect to these legislative protections on the part of regulatory agencies.
3.5 Further Evidence on these Risk Factors Collected in the Course of this Project The risk factors referred to above have also been identified by other recent investigations. For example, in his discussion paper on workplace safety prepared for the Royal Commission into the Building and Construction Industry Durham (2002: 8) identified the association between contingent work arrangements, economic pressure and corner cutting as critical to the industry’s poor OHS performance. Over the past 20 years there has been a steady emergence of non-traditional working arrangements, including temporary workers such as casual and part-time employees and subcontractors, and labour hire companies. The construction industry has experienced a decrease in permanent employee numbers and a rise in the number of businesses that rely on outsourced work. In this respect, the building and construction industry reflects trends in other industries. Building sites combine many enterprises. The economic environment of the industry drives a culture where the objective of many contractors working in the industry is to come to the site, start and finish the contracted work, and leave for the next job as quickly as possible. In this culture safe work practices are often regarded as likely to slow the work down and cost money. Any attempt to improve workplace health and safety outcomes must take account of this environment.
Such observations would not be news to the industry. A year earlier the chairman of the Contractor Safety Alliance, representing large construction firms in NSW and Victoria, told a NSCA Futuresafe Conference in Brisbane (cited in Safeguard Update No.173 2 July 2001) that while principals often responded to customer pressure regarding time and cost by passing the problem onto subcontractors: In such a competitive market, they’re left with no option but to look at areas they can shave to meet the price and time frame. It results in longer hours, short cuts and saving on safety by cutting out scaffolding, reducing the labour force and so on. To a subcontractor, risk management is probably working out what he can get away with before he is caught by the inspector… A lot of problems aren’t of the subcontractor’s own making. It’s the contracting environment that’s to blame, and the principals must accept they are part of the problem.
The risk factors identified in the review of published research also found support in other material collected as well as interviews carried out during the project. Interviewees were not specifically referred to or asked to comment on the sets of three risk factors just mentioned. However, in the course of interviews incidents and scenarios were identified that clearly fitted within one or more of the three risk factors. 95 --
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In relation to economic pressures regulatory staff referred to a number of incidents or circumstances with which they were directly familiar. One cited the case of a large housing developer who in their efforts to complete and market houses as quickly as possible was pressuring landscaping subcontractors to commence work before construction was completed and thereby exposing them to greater risk of injury. Examples of cost pressures also came from contractors, employers and other industry representatives. For instance, reference was made to the failure to install monorails in large buildings to assist moving heavy equipment used to repair/service lifts and pressures on contract electricians to work ‘live’ on building sites or in large commercial premises like clubs. In relation to disorganization a number of agencies referred to the problems created where companies had outsourced an array of activities making overall coordination of OHSM extremely difficult. A Tasmanian regulatory agency officer referred to a workplace scenario where machinery (such as a forklift truck) was leased from one firm where the truck was leased (affecting attitudes to its maintenance), the forklift driver was unfamiliar with the equipment and the person hit in an ensuing incident was a leased worker unfamiliar with the workplace (and as a result didn’t see the forklift coming). In other words, a series of simple contractual decisions had effectively could lead to a situation where there were critical (and often un-anticipated) disarticulations in OHS management. In terms of actual incidents, the same officer referred to case where an subcontract electrician brought in to some maintenance work at a plant was asked by a group of workers to examine another machine and when he returned to do this the machine was restarted without his knowledge resulting severe amputations. An incident like this could occur even to an on-staff electrician given a lapse in communication or breach of protocol but the use of subcontractors magnifies the risk of such a lapse/breach because it adds to the level of unpredictability and unfamiliarity in interchanges amongst different groups of workers at the same site. With regard to the weakening of regulatory protection agency staff from a number of jurisdictions referred to the difficulties posed in terms of enforcing OHS and workers’ compensation legislation (say, with regard to home-based work) as well as the coincidence of contingent work arrangements in some industries with the simultaneous evasion of industrial relations standards, OHS and workers’ compensation legislation. Since community standards on minimum wages and maximum hours are primarily enacted in Australia via the award system those not covered by awards or special legislation (such truck drivers under road transport laws), including most self-employed subcontractors and self-employed home-based workers are essentially able to work for wage levels or undertake hours of work that could be regarded as dangerous and unhealthy. Even where there is coverage there are considerable enforcing these standards where self-employed workers change jobs or are based at home. Staff in regulatory agencies referred to instances where flexible work arrangements were seen to lead to excessive hours of work being un-addressed or going undetected, such as the case of leased worker discovered to have been working double shifts at a factory for months. Reference was also made to the association of some flexible work arrangements with contractual forms that appeared to represent an attempt at deliberate regulatory evasion. For example, one agency representative referred to a case where through an elaborately written contract a driver-training firm was trying to have its instructor designated as principles and itself designated as their agent. Another example cited was of a labour leasing firm that had reconfigured itself as a trust and had its workers designated as beneficiaries (receiving benefits rather than wages). This made it difficult for the workers’ compensation agency to 96 --
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pursue a claim on behalf of a worker injured (as the worker was injured in a vehicle incident they were able to obtain funds for this avenue and so the matter was not pursued). It was noted that attempts at regulatory evasion left agencies with the dilemma of either throwing scarce resources at what was presently a small problem or risk waiting until a scheme became widespread and required far more in the way of remedial measures. In the case just cited it was alleged that the firm involved had received ‘expert’ advice on how to re-arrange its structure. This reorganization may be undertaken for a variety of reasons including lowering tax liability as well as minimum employment standards and workers’ compensation requirements. In the USA a number of law firms and consultants specialize in offering advice to employers on how to legally limit their regulatory exposure (and associated compliance costs) with regard to the employment of contingent or non-standard workers (and can be easily located by simply typing ‘temporary worker’ into an internet search engine). These websites include information such as reports on recent court decisions relating to the applicability of regulatory standards to particular categories of workers as well as, for example, lists of regulatory and cost advantages of using, say, independent contractors. It would appear that individuals and perhaps firms proffering similar advice operate in Australia although logistical constraints prevented an investigation of this. If such practices are occurring, the multiple rationales for engaging in them (tax liability, industrial relations, superannuation and workers’ compensation) may make remedial action by a single government agency like WorkCover quite difficult. It is worth noting views essentially similar to those of regulatory staff in Australia can be found amongst OHS agency staff in other countries. For example, writing on the OHSM challenges posed by changing labour markets in 2000 Richard Clifton (2000) from the UK HSE noted that, amongst other things, large numbers of contractors working together posed additional co-ordination problems as well as greater scope for uncertainty as to the legal responsibilities of various parties. 3.6 Conclusion Precisely how and why at least some contingent work arrangements are associated with inferior OHS outcomes is an area requiring further research. It is possible that the critical causal factors may vary somewhat, depending on the precise type of work arrangement. In other words, the risk factors that are critical in the case of subcontracting arrangements may not be identical to those that apply in the case of temporary employees. Nonetheless, a review of existing research as well as interviews conducted in the course of this project identified three sets of factors that do appear to explain why these workers are at greater risk. These are the particular economic pressures and reward systems they work under; the disorganisation of work that commonly occurs where they employed (including their more limited ability to exert control over the work process and represent their own interests); and less effective nature of regulatory protection they work under in comparison to workers in more conventional employment arrangements. In order to be most effective, interventions or remedies designed to improve OHS amongst contingent workers need to be informed by a clear understanding of the risk factors that give rise to these risks. Only by this will they address the underlying or root causes of these problems.
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Chapter 4 The current regulatory framework and changing employment relationships: Prevention 4.1 Introduction How has the current regulatory framework accommodated to the demands posed by changing employment relationships? To answer this question it is necessary to take account both of the particular structure of existing OHS legislation as well as the enforcement strategies and practices of the agencies responsible for implementing this legislation. As in many other industrialized countries, major changes were made OHS legislation in Australia after 1973 (given that OHS legislation is primary state and territory-based this reform process occurred faster in some jurisdictions than others but the main features were arguably in place in all by 1989). This included a rationalization of pre-existing laws and the introduction of new laws with over-arching coverage of OHS. The new laws contained general duty provisions, worker participatory mechanisms (such as joint workplace OHS committees and employee health and safety representatives), wider inspectoral powers, higher penalties and enforcement tools (such as improvement and prohibition notices). The laws also initiated a shift away from complete dependence on traditional prescriptive standards (such as requirements for guarding on particular machinery) towards process standards (like those in relation to manual handling/ergonomics) and performance standards, including the promotion of OHS management ‘systems’ – a process that is arguably still underway. At one level, the new model legislation – with its recognition of responsibilities across a wide-range of parties, its ability to be updated regularly and to take account of work organisation and ‘safe systems of work’ – would seem to have been better placed to accommodate the demands posed by changing employment arrangements. At another level, some of these changes appear to be undermining understanding of these key components, including participatory mechanisms. There is also a question of how quickly OHS agencies, at policy, prosecution and inspectoral level, can adapt to these changes when they are still absorbing the demands of moving towards process standards and management systems. The remainder of this chapter will consider these issues. The chapter is divided into two parts. The first considers the impact of changing employment relationships on the main features of the legislation. The second part considers the problems posed by particular work arrangements such as outsourcing/subcontracting, labour hire/leasing and the like. 4.2 Principle Legislative Requirements and Provisions 4.2.1 The Effect on General Duty Provisions Arguably a critical feature of post-Robens OHS legislation in Australia are provisions establishing the responsibilities of different parties in relation to establishing and maintaining 98 --
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a safe system of work and safe working environment. While the duties vary somewhat in wording from jurisdiction to jurisdiction all are wide-ranging, drawing in array of potential duty-holders (not just employers and workers but also designers, suppliers, manufacturers, importers, occupiers and contractors) and establishing both hierarchical and horizontal chains of responsibility. There are limitations in the wording of some general duty provisions that affect their capacity to address issues in connection with changes to employment status in work arrangements. A notable example is in the New South Wales Occupational Health and Safety Act. This limitation was highlighted by a legal opinion sought from Professor Richard Johnstone as part of the inquiry into safety in the long haul trucking industry in that state (see also Johnstone, 1999). Johnstone (2001, Appendix Two) argued: There is, however, a significant limitation on the scope of the employer (or self-employed person’s) duty in sections 8(2) and 9 of the OHSA (NSW). The duty is owed to non-employees (truck drivers) only “while they are at the employer or self-employed person’s place of work.” “Place of work” is defined in section 4 to be “premises where persons work.” “Premises” are defined to include “any land, building or part of a building, or any vehicle, vessel or aircraft…” The expression “place of work” has been scrutinised by the courts. The leading cases on the meaning of the expression in the OHSA(NSW) make it clear that the expression includes every area which may be affected by the work being done. In other words, it is arguable that consignors and clients owe duties to drivers under sections 8(2) and 9(1) only while drivers are at the consignor’s “place of work”. Even though this geographical limitation (which is not to be found in the corresponding Victorian and Queensland provisions) severely restricts the scope of section 8(2) in its application to the relationship between consignors and drivers, it might be argued that this duty still encompasses important aspects of the loading and transport of freight. The duty refers to the “exposure” of drivers to risks while at the employer’s place of work. It clearly covers the way in which goods are loaded onto trucks at the employer’s place of work, especially for risks (such as manual handling injuries) during the loading. It also arguably covers situations in which employer activities placing drivers at risk take place at the workplace, even though the risk may only eventuate away from the actual workplace: for example, where drivers are required by the consignor to wait for long periods at the employer’s workplace until goods are to be loaded, thus depriving drivers of necessary rest before driving. The crucial issue is whether the risks must actually occur while the driver is at the workplace, or whether the drivers must be at the workplace when the relevant parts of the undertaking are being conducted. On the face of the statute, this is not clear. The most restrictive interpretation, and the interpretation which seems to most accepted, is that the duty is only owed while drivers are at the workplace. In other words, the section only covers risks at the workplace. But there is a strong argument that the ordinary grammatical meaning of sections 8(2) and 9(1) is that it is the “exposure” to risk only that must occur while the driver is at the consignor or client’s workplace. This interpretation would mean that provided the truck driver was at the client’s workplace when the activity which exposed the driver to risk occurred (for example, waiting in a queue and being deprived of necessary rest), the duty is owed to the driver. It still would not cover contractual dealings between the client and trucking company engaging the owner driver, or dealings between the driver and the client/consignor while the driver was not at the workplace. Similar considerations arise in relation to the obligations of a trucking company in relation to contractor owner drivers. Although each case would depend on its particular facts, the truck would in most cases not constitute the trucking company’s “place of work”, and therefore the company’s duty to drivers would be limited to situations where the driver was at the company’s
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workplace, or, taking the broader meaning, when the truck driver was at the workplace when exposed to the risk, even if the risk only materialised away from the workplace. Section 9 would apply to owner/drivers themselves, and would require them to take care for the safety of others (other road users, pedestrians and members of the public) while they are driving their trucks. But, once again, the scope of this duty is clouded by the requirement that the person to whom the duty is owed must be “at the self-employed person’s place of work.” The upshot is that the section 8(2) and section 9 duties are compromised in their application to the relationship between consignors and contractor drivers (whether the drivers are employees of a trucking company or owner drivers) because of the geographical restriction to the workplace. And as the discussion in the previous paragraphs has shown, there it is not clear as to what exactly is limited to the workplace – the exposure to risk, or the actualisation of the risk. Even if the better view is that the exposure to risk (not the actualisation of the risk) must take place while the driver is at the workplace, the coverage of the duty is still dependent on whether or not the person who is owed the duty is actually at the workplace when exposed to the risk. This is an inappropriate, and, as the earlier discussion indicates, one that leads to finicky hairsplitting. The section 8(2) and section 9 duties are arguably the most important duties in the OHSA(NSW) for the purposes of regulating long haul truck safety. The provisions are in urgent need of reform. The need for reform of section 8(2) and 9(1) is apparent when other examples, not related to truck driving, are considered. A person walking past a workplace emitting toxic substances would not be covered by the duty, but the same person would be covered if they set foot on the premises. Home-based workers who are categorised as independent contractors would not be covered by the section 8(2) or 9 duties. Similarly, labour hire workers engaged by a labour hire agency on terms making it clear that the worker is not an employee of the agency, would not be covered by the section 8(2) duty because they would not be working at the labour hire company’s place of work. This places workers who are not categorised as employees under a significant and unfair disadvantage when compared with the position of employees. For a discussion of issues in the categorisation of labour hire workers as “employees” or otherwise, see Swift Placements Pty Ltd v WorkCover Authority of New South Wales (Inspector May) (2000) 96 IR 69. For an analysis of the extent of a labour hire agency’s duties to employees, see Drake Personnel Limited v WorkCover Authority of New South Wales ((Inspector Ch’ng) (1999) 90 IR 432. The requirement that the person to whom the duty is owed to be at the duty holder’s workplace is inappropriate in an age of greater work flexibility, when workers are increasingly being engaged (i) in work relationships other than the employment relationship and (ii) are working away from the workplace of the person who has engaged them. This difficulty does not arise in relation to section 22 of the Occupational Health and Safety Act 1985 (Vic) or sections 28(2) and 29 of the Workplace Health and Safety Act 1995 (Qld). The Victorian and Queensland provisions are similar to the section 8(2) and 9(1) duties in the OHSA (NSW), except that they are not qualified by the expression “while they are at the employer [or self-employed person’s] place of work.” These provisions operate most satisfactorily.
In other words, Johnstone argued the laws of Victoria and Queensland indicated that there was no need for this limitation and he argued the issue could be readily addressed in New South Wales by removing the expression “while they are at the employer’s place of work” should be removed from section 8(2) of the Occupational Health and Safety Act 2000 (NSW), so that it resembles section 22 of the Victorian Act (see also Johnstone, 1999). He recommended that similar amendments be made to section 9 of the same Act (the selfemployed person’s duty). 100 --
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At the same time, NSW is not the only jurisdiction that might be seen as having a serious flaw in its general duty provisions. According to Johnstone (1999) the general duty provisions of the Commonwealth and ACT Acts incorporate the term ‘at or near the workplace’ and therefore suffer from a similar limitation to the NSW Act. Johnstone (1999) general duty provisions in the South Australian and Western Australia Act are also much weaker than those in the Victorian Act. Further, in the course of interviews regulatory staff in Tasmania indicated that they had a problem with s9 (4) of the Workplace Health and Safety Act 1995 because it did not effectively inhibit the contracting out of OHS responsibilities. As one officer remarked: There was a provision within the section that tried to hold the principal accountable for all work activities no matter if its contracted or subcontracted. Doesn’t work and we recognise that and are trying to fix it. This [the project] is quite timely. There are pockets of industry, forestry, that recognise that loophole and are exploiting it.
They argued the limitation arose because the provision only anticipated one level of subcontracting and so further tiers of subcontracting nullified the section’s effectiveness. Multi-tiered subcontracting raises important issues beyond the specifics of the Tasmanian legislation. In some industries multiple levels of subcontracting is the norm and even if legislative responsibilities nominally the parties may have little awareness of this, and it may also be extremely difficult for regulators intent on launch a prosecution to establish each link in the chain back to the principal contractor (especially where deliberate efforts are made to obfuscate this). Remedying this may require specific tracking mechanisms and examples of this are discussed in Part 2 of the report. Leaving legislative flaws to one side, a major concern was expressed by a range of parties including regulators, union officials, OHS law specialists/advisors and even some employers and their representatives. This was that, notwithstanding the breadth and structuring of general duty provisions, the growth of contingent work arrangements as well as, in some industries, relatively regular shifts in employment status was leading to ambiguity and increased misunderstanding amongst the parties in relation to their legal obligations. As already indicated this view, which is supported by available survey evidence (See Quinlan and Mayhew, 2000), was not simply expressed by regulators and union officials but a range of other parties. For example, a contractor working in an industry where subcontracting was a long established practice, argued: The belief still exists with some employers that “he’s just a subbie, I don’t have to worry about him”. More savvy employers know better, but many need a radical revision of their beliefs and attitudes towards this sector of the workforce.
That widespread misunderstanding should continue to occur may seem surprising given the issuing of guidance material indicating the over-arching responsibility of the host employer or principal contractor and a growing number of prosecutions to reinforce the point (see Part 2 of this report). However, what was especially disturbing was that regulatory staff in most jurisdictions believed this lack of knowledge of general duty provisions in legislation, far from diminishing or at least remaining around the same level, was actually growing over time. During interviews with regulators for this project repeated reference was made to changing work arrangements being associated with a more fractured and individualized perspective on OHS and the legal responsibilities of the parties, rather than the structured allocation of 101 --
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responsibilities actually enunciated in the general duty provisions (see too Johnstone, 1999). For example, regulatory staff in state, territory and the federal jurisdiction all indicated that, contrary to the legislation a number of employers (including public sector organisations and government enterprises) were under the mistaken impression that outsourcing supply of a product or service also transferred their duty of care under OHS legislation. Moreover, this view was not confined to officers in the OHS (prevention) side of the jurisdiction but was also echoed by more than a few staff working in workers’ compensation bodies. Typical was the following statement: One of the big banks has a call centre here and what they’re doing is basically outsourcing part of that operation, leaving some of their own people in the call centre but basically the other 200 are going to be employed by someone else. And basically the bank was saying “that’s 200 off our books we don’t have to worry about”. I sent someone out to correct their point of view. (Telling them) you still own the premises and as far as we’re concerned, especially as you’re self-insured, we’re going to hold you…liable for anything that occurs in that place, telecall centres being the hazardous places they tend to be…
The views expressed in interviews were supported by documentary sources, including a search of agency publications. For example, in reporting its Safer Forests Project WorkCover News (June-August 2001, 45: 3), organ of WorkCover NSW, reported that a project survey had revealed several issues, namely: …crew fatigue and inadequate training of crews in safe systems of work. Timber felling contractors did not appear to be aware of the OHS roles and responsibilities of the different stakeholders working in the forests.
In the same issue WorkCover News (June-August 2001, 45: 21) reported the prosecution of a construction company, which highlights similar issues and is worth quoting at length because of the other issues it raises (notably the failure of the first prosecution and the involvement of a government agency, the Roads Traffic Authority). Ridge Consolidated Pty Ltd was fined $111,000 over the death of a contract day labourer killed by car on the M4 Motorway Extension project. The car driver was convicted of dangerous driving occasioning death and jailed for six years. Justice Kavanagh said a complex arrangement of subcontracting led to “complete avoidance of responsibility for site safety, notwithstanding the absolute obligation the Act places on each employer”. Ridge Consolidated failed to ensure the labourer had been trained in site safety, inducted into safety procedures, properly supervised or satisfactorily protected. The State Government through the Roads and Traffic Authority, had called tenders for the M4 Motorway extension and awarded the contract to StateWide Roads. A company related to StateWide Roads, SWR Construction Pty Ltd, was prosecuted as the main contractor but it was ‘not proven’ SWR had any employees so the case was dismissed. SWR subcontracted to Ridge Consolidated, which subcontracted to Hitex, which had since gone into liquidation. “The labyrinth of subcontracts and passing over of responsibilities for site safety, ensured no contractors felt the full burden of absolute obligation imposed on them by legislature as employers,” Justice Kavanagh said.
The same problem has arisen on other occasions. For example, later that same year Justice Kavanagh dismissed a charge by WorkCover against the principal site contractor, Develco Projects Pty Ltd because she held the Authority had failed to prove Develco was an 102 --
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“employer”. She argued that WorkCover needed to conduct company searches to establish the role of holding companies and corporate structures and added: Modern industrial trends which encourage the development of contract and subcontract labour require a very thorough investigation by the prosecution as to the identification of the employer.
At the same time, as other jurisdictions pointed out in interviews, such company searches are both expensive and time-consuming, especially in a context of increasingly complex corporate arrangements. From a policy perspective there is a question of the extent to which use of the ‘corporate veil’ should be permitted to encumber if not defeat the clear intent of OHS legislation and entirely appropriate and resource effective enforcement targeting. In this case WorkCover successfully prosecuted two other parties for the incident where the collapse of a brick wall killed two labour hire workers. The contractor was fined $265,000 and the subcontractor who engaged the men fined $125,000 (WorkCover Authority of NSW v Consolidated Constructions Pty Ltd, [2001] and WorkCover Authority of NSW v Byrne Civil Engineering Constructions Pty Ltd, [2001]). However, the principal escaped penalty raising serious questions in terms of the application of the hierarchy of control within general duty provisions. Further, without an input of additional resources WorkCover NSW might have reduce its enforcement activity. Most regulatory staff attributed this problem primarily to ignorance although instances where it was seen to be a calculated attempt at regulatory evasion were also raised. Even if ignorance is the reason it is hardly reassuring that the management of large firms, like that just mentioned, embark on significant changes to work organisation without any clear understanding of the implications of this in terms of their obligations under OHS legislation. In trying to explain this a number of regulatory staff referred to the low priority accorded to OHS in business decision-making. Its probably because its one of the last things they (ie management) think of when they make these arrangements. They cut a business deal because its good for business and all this appendage stuff like occupational health and safety, workers’ compensation claims and liability (they) don’t really think about that. We’ve had a lot of mergers and sales…and I’ve got a case going at this very moment where a selfinsurer in this state has unilaterally changed its arrangements for the management of plant. Deliberately didn’t speak to us because they didn’t want us to say “you need to be careful”. They’ve made it (the decision) on the basis of the bottom line dollar decision and they reckon they’ll just deal with us at a later time. So when these business deals are done I don’t think they spend enough time talking to their risk management people. But I don’t think in most cases its calculated. They think of it as detail.
That this problem should extend to ComCare may seem surprising given that it covers federal government employees. However, it should be noted that not all federal government agencies are large, a number have been privatized or corporatised and even amongst those not affected by this there has been devolution of controls enabling agencies to pursue more independent policies (in some cases to the point of outsourcing their human resource management functions). Moreover, where outsourcing or labour leasing has occurred this has adds a level of regulatory complexity not found in other jurisdictions. Unlike federal government employees, ComCare would not cover outsourced or leased workers working for federal agencies in terms of workers’ compensation. This cover would come under the workers’ 103 --
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compensation legislation of the state or territory where the workers were located. Further, these outsourced/leased workers would be covered under federal OHS legislation (administered by ComCare) when working at federal government premises but not when working at different locations. ComCare staff interviewed believed this additional overlay of legislative complexity was contributing to confusion amongst federal government agencies and corporations. An additional regulatory complexity identified in an earlier interview with a commanding officer of an Australian Defense Forces (ADF) establishment who, while having overall responsibility for OHS, only had the power to request co-operation from several other Commonwealth agencies (non ADF) with premises and staff on site. When asked about this, ComCare representatives noted there was overarching control with regard to situation involving different ADF bodies (say both a navy and army presence) but conceded there could be a problem where non-ADF bodies were involved or in other scenarios where multiple Commonwealth agencies used the same worksite. All employers in these situations were still subject to federal OHS legislation although how to achieve a co-ordinated approach remains an issue. It was noted that the regulatory situation would be more problematic where state/territory government or private employers also shared a worksite with the Commonwealth because it would raise some ‘grey’ areas concerning jurisdictional control. These problems, which can occur outside of the Commonwealth jurisdiction, are perhaps more to do with multiple employer work sites than outsourcing per se. At the same time, the growth of outsourcing arrangements creates more potential for multi-employer worksites. A classic example of the complex duality of coverage that can arise noted by ComCare staff was the outsourcing of illegal immigrant detention centres to a private contractor, Australian Correctional Management (ACM), by the federal Department of Immigration. As a result of the outsourcing, ACM were subject to the OHS legislation prevailing in the state or territory where the detention centre was located. At the same, as the detention centres remained commonwealth property the Department of Immigration retain a responsibility for the site, including responsibilities under federal OHS legislation. Hence, reportable incidents at such a facility would need to be reported to ComCare. ComCare staff interviewed noted that there had been some initial confusion with regard to this. In addition to problems of ignorance there was also at least one instance where one party, namely labour hire/labour-leasing firms, were explicitly denying having a duty under the legislation. In the course of interviews for this project, regulatory staff in at least half the jurisdictions visited indicated that labour-leasing firms had expressed the view to them that they should not have OHS responsibilities but rather these should reside with the host employer (a similar position was adopted by the MBA in the NSW Labour Hire Task Force Final Report 2001:10). It is fair to say this viewpoint was seen as both perplexing and alarming as, to take the words of one regulator, ‘any party who, to an extent, had control of OHS had legislative responsibilities under the general duty provisions’ (and as already noted the parties nominated under such provisions is very broad including a number of designation such as ‘suppliers’ under which labour hire firms may reasonably be seen to fit). The recent involvement of labour leasing firms in collaborative working parties or consultation on the development of guidance material relating to labour hire by government OHS agencies might be seen to indicate this view has shifted. At the same time, these developments do not represent all labour leasing firms, the industry association is of the view the current interpretation of labour leasing firm’s OHS obligations is too onerous, and discussions with 104 --
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several parties indicated that moves to modify legislative obligations were still occurring (or had occurred very recently). This problem is not unique to Australia. Reviewing the situation in the EU, Storrie (2002, 48) states: Nowhere does the duality of the employment relationship combine with the short duration of assignment in such a potentially problematic fashion as where issues of workplace health and safety are concerned. In most Member States, there is some form of dual employer responsibility for these matters. While in principle there would appear to be a rationale for some form of dual responsibility between the agency and the user firm, it is obvious that there is potential here not only for a lack of clarity, but also for abuse. Moreover, the successful pursuit of health and safety in the workplace requires much more than legislation. Indeed, it could be argued that H&S issues are best addressed by framework legislation that is backed up by a commitment and organisation (with suitable institutional arrangements) in the workplace, to ensure that the legislation is made relevant to the particular place of work, and – crucially – to ensure that the rules are observed. How then do agency workers fit into this model of efficient health and safety policy implementation? Firstly, it is conceivable that at the local level both management and unions may be less concerned for the welfare of agency workers, who do not belong to the firm proper and who may not be members of the same trade union as other workers (or of any trade union). Furthermore, the pressures within the informal social structures of the workplace may not be conducive to supporting the interests of agency workers.
A survey of 1,000 recruitment agencies undertaken for the UK Health and Safety Executive (HSE Press Release 18 September 2000) in 2000 found that 80% of agencies believed that responsibility for OHS rested with the host employer. Mel Draper, head of the HSE’s Policy Division stated: This research confirms that there is a lack of clarity among recruitment agencies and host employers about responsibilities for the health and safety of agency workers. We are concerned this may lead to some workers not receiving the same level of protection as others. Although there was evidence of good practice, it is disappointing that on the whole recruitment agencies believe responsibility for agency workers’ health and safety is with the host employer. These results are informing the next stage of the HSE’s work which is looking at who has or should have responsibility for an agency worker’s health and safety.
As far as I am aware no similar research has been undertaken in Australia. As will be noted in Part Two of this report a series of well-publicised prosecutions by WorkCover has served to clarify the situation in NSW more so, perhaps, than some other jurisdictions. Nevertheless, a significant level of ambiguity appears to remain. The legislative situation in relation to labour leasing and the views of other parties (aside from regulators) is examined in more detail later in this chapter and in the following chapter. Not only was the problem of a fracturing of knowledge in relation to duties acknowledged in interviews with staff in most agencies, several provided evidence to support this. For example, in Tasmania the Workplace Safety Board had commissioned a survey of worker 105 --
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attitudes to OHS and workers’ compensation. The survey broke respondents into five attitudinal groups (the committed, the uninvolved, the dis-empowered, responsibility avoiders and risk accepters). When discussing ‘risk accepters’ who constituted 17% of the survey, the report commented that many workers in this group had expressed the view that they hadn’t raised OHS issues with their boss because he didn’t own the premises where they worked (ie they were labour hire or outsourced to another workplace or work was undertaken away from the employers premises, as in the case of washing machine repairers or roofing tillers). In other words, these workers frequently believed OHS could not be addressed since any concern raised would need to be relayed by their ‘boss’ to the party in control. While some of the situations just mentioned (such as washing machine repairer working in someone’s home) hardly constitute a new work arrangement/problem the expansion of outsourcing, labour hire and similar arrangements is clearly increasing the number of workers likely to adopt this stance (unless remedial measures are undertaken). The Tasmanian case might be seen as an outcome of the legislative limitation already alluded to but it is actually consistent with other survey evidence on OHS legislative knowledge of contingent workers drawn from other jurisdictions (see for example, Quinlan and Mayhew, 2000). Most disturbing perhaps from a NSW perspective was the view expressed by a number of interviewees that the newly mandated risk assessment requirement, far from helping to rectifying confusion with regard to the respective OHS obligations of particular parties, was actually exacerbating it. It was suggested by a number of interviewees, including some who had attended WorkCover briefing seminars on the 2001 Regulation, that the efforts of WorkCover (ie government) presenters to identify the responsibilities of particular parties resulted in the strong impression that responsibility was being pushed ‘down the line’. One former WorkCover NSW officer who had helped draft the new regulation was amongst those who expressed concern as well as their surprise given that this was clearly not its intention (although the danger had been debated during early consideration of the proposal). Another former senior WorkCover NSW officer echoed these concerns. This misleading impression appears to have been reinforced by information on the risk assessment requirements distributed by some large employers to their middle managers and staff (and with a corresponding downplaying of the Regulation’s requirements in terms of worker consultation). At the same time, WorkCover NSW has been running seminars for industries such as construction with the General Manager as a key presenter and where the role of the different parties - employers, principal contractors and sub-contractors – is clearly a central item of the agenda. Some WorkCover documents may have unwittingly contributed to a misinterpretation. For example, when elaborating on the duty to consult the WorkCover Code of Practice on OHS Consultation (2001c: 12) refers to concurrent responsibilities for OHS under the Regulation – including the situation where there is manufacturer using a labour hire firm. However, there is no unambiguous statement that, notwithstanding this, the host employer or principal contractor has an over-arching responsibility for OHS at their workplace. While such an interpretation may be implicit in the succeeding discussion of facilitating consultation it is by no means explicit and it is possible to see how someone reading these provisions (especially in isolation) might gain a different interpretation. Evidence on misinterpretation of the risk assessment requirement amongst employers is based on limited evidence but may warrant further investigation and, if necessary, remedial action by WorkCover. One agency (Queensland) indicated that efforts to avoid misleading interpretations about the responsibilities of respective parties included being cautious in using the term ‘shared 106 --
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responsibilities’ over the past decade and at launching prosecutions against individual workers (except in demonstrably necessary cases such as when their illegal actions put other workers in danger). Senior officers expressed the view that continual targeting of employers was essential to keep the message clear about their over-arching responsibility. At the same time, it was acknowledged that the growth in self-employed, more diffuse workplaces and elaborate subcontracting chains made it progressively more difficult to get this message out. Several senior staff also indicated that concerns at the misinterpretation of the NSW risk assessment regulation had influenced their approach to legislative reform in their jurisdiction. As will be noted below, ambiguities arising from changing employment relationships has led to a reconsideration of key definitions (notably that of ‘worker’ or ‘employee’) in a number of recent reviews of OHS, industrial relations and workers’ compensation legislation (such as the recently completed review of industrial relations legislation in Queensland and the current review of the Queensland Workplace Health and Safety Act). Measures to address this issue have also been proposed in New South Wales. A final dimension of the fragmentation of perceived responsibilities in relation to general duty provisions is worth mentioning, namely the splintering that is resulting from elaborate supply chains and the power that may be exercised by particular groups or industries over others in a way that effectively transfers a burden of risk on the latter. Although this issue has already been alluded to both generally and in relation to outsourcing/subcontracting there are situations where these problems will arise from what appears to be a simple commercial arrangement. Regulatory officers in several jurisdictions raised the issue. The most common example cited was in relation to pressures that clients imposed on the road transport industry with scheduling and pricing requirements that effectively encouraged excessive hours/fatigue and other unsafe driving practices. In relation to long haul road transport, this matter was explored in some detail in the recent trucking inquiry (Quinlan, 2001) and will not be repeated here although relevant aspects relating to remedies will be discussed in later chapters. Employers spoken to in the course of this project referred to analogous problems in the short haul sector of the industry (including lengthy delays at warehouses). The transport industry highlights the need to enforce OHS duties on suppliers and other parties who appear to believe they are exempt from any responsibility under OHS legislation and whose commercial power exerts a significant effect on work practices, including those of a highly dangerous nature. The issue is not that road transport operators should be exempt from liability but rather addressing these ‘higher up the chain’ may prove far more effective. Another example cited in the course of interviews with regulators was construction. On regulatory officer observed: If you look at the construction industry where everything is set up on a contract basis right the way down, the major impact of that is the initial determination of cost that comes from outside the industry and all the…costs are absorbed within the industry until it comes down to the coal face where the pressure is on the people actually doing the work. There need to be some scenarios…developed where we …look at things outside the industry impacting on the industry.
Reference was also made to the problems associated with the ‘corporate veil’ and the transfer of business undertakings. Pointing to a situation where a company had transferred all its assets to another corporate entity, one regulator asked what incentive a company with no assets had for acting responsibly in relation to OHS. This and other examples of the transfer business were seen as posing potentially more serious problems in the future. 107 --
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Finally, another issue in relation to the general duties is their scope and intersection with other labour standards. As implied in an earlier chapter, the standards laid down in OHS legislation arguably encompass, intersect with or rely upon other labour standards such as those relating to minimum wage rates, hours of work, the employment of children and the like. There is evidence that in some industries, like clothing and long haul road transport, where minimum labour standards are bypassed or not enforced the implementation of OHS legislation is rendered dubious. To put it in terms of general duties, can an immigrant family (including children) manufacturing clothing at home for $3 per hour (and low rates is why the children are helping) be deemed ‘a safe system of work’ when it can shown these low rates of pay induce long hours of work and a significantly higher number of work-related injuries (Mayhew and Quinlan, 1999)? Can a owner-driver earning rates under a multi-tiered subtracting arrangement that only enable him to cover costs by exceeding the speed limit and working excessive hours be deemed as having entered into a ‘safe system of work’? Can an employee driver who, in order to retain his job in the face of such competition, accepts a trip rate that he knows doesn’t meet the award requirements be said to have a ‘safe system of work’? Can a subcontract building worker who undertakes a task that can only be made rewarding by using workers lacking key qualifications and cutting corners on safety be deemed to have entered into a safe system of work? Numerous similar scenarios involving contingent work arrangements could be presented. At present, general duty provisions in OHS legislation do not make any explicit reference to other labour standards and these connections are at best implicit, although as noted elsewhere in this report, the need for a multi agency/multi-standards approach has been recognized as required in some industries. There are legislation, policy and enforcement issues here (several of these will be discussed at later points in this chapter). In sum, the growth of contingent work arrangements has resulted in a fragmentation of knowledge of legal obligations amongst different duty holders (thus for example rather an a relatively simple employer/employee relationship there can be situations of employer/employee/leased worker and multiple subcontractors). This fragmentation was seen to result not only in a greater likelihood of confusion and erroneous understanding amongst the parties (and a reversion to more individualized perspectives) but also make more logistical demands on the OHS agency (administrative issue will be discussed below). It should be stressed that even where the legal status of particular group of workers is clear (say a group legislatively deemed to be employees) what workers actually believe to be their status will determine the effectiveness of the legislation. In other words, the issue to be addressed is not just one of legal clarification but also combating misinformation. Contingent work arrangements are also conducive to the undermining of other labour standards that can critical OHS effects. While the growth of contingent work seems to have weakened understanding of the general duty provisions that are central feature of Australian OHS legislation it should not be concluded from this that other types of OHS legislation are immune to a fracturing of OHS knowledge. Researchers in Europe and North America, where there are a number of different legal regimes (including ongoing reliance on specification standards in the USA) have pointed to the same problem, namely that with contingent work questions of legal responsibility are more ambiguous or open to interpretation at least in the minds of the parties if not regulators (see Bergstrom and Storrie, 2002). 4.2.2 The Effect on Guidance Material, Codes of Practice and Regulations 108 --
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By altering the array of hazards or level of risk changing employment arrangements may be weakening the value of existing guidance material, codes and regulations. For example, a number of flexible employment arrangements are associated with changes to working time that may have critical relevance for existing exposure limits. Exposure limits for hazardous substances such as noise, toxic chemicals and the like in Australia (as in many other countries) have been largely derived from standards termed threshold limit values (TLVs) developed by the American Conference of Government Hygienists (ACGIH). TLVs are usually expressed in two forms – a maximum exposure limit (beyond which no worker is meant to be exposed to for however a short a period) and a long-term time-weighted exposure limit (usually calculated on the basis of daily eight-hour shift with a corresponding 16 hour period of non-exposure). Any change to work timing or shift arrangements that increases the period of exposure (as with the introduction of 12-hour shifts) or the cumulative period without breaks (as in the case of nine days ‘on’ and four days ‘off’) may effectively make the standard 8-hour based limit invalid and requiring a recalibration that may be substantial (with regard to noise see NIOSH, 1996a). It is by no means clear that OHS agencies have made this point sufficiently to employers or amended their documentation accordingly. Nor is there much evidence that inspectoral activities have been modified to take account of these effects or to recognise the additional problems posed with subcontractors or leased workers who may less familiar with appropriate standards and whose workplace exposures are more difficult for agencies to monitor and control. A not unrelated issue is the need to give specific recognition in industry guidance material and codes to work arrangements that have a significant effect on OHS. These developments will be discussed more fully in Chapter 7. At this point it is enough to note that a number of agencies have been modifying their guidance material and other forms of information provision over the past five or more years. Yet while this process is gaining in momentum, some agencies have hardly begun the process and even amongst the more advanced the process is, at this stage, ad hoc and partial with conspicuous gaps even in areas that, like subcontracting, have been generally better addressed. In other areas, like temporary work and organizational restructuring there is no information provision whatsoever. It is also worth noting that progress in modifying codes and regulations is even slower. New codes are still being developed without consideration of these issues. To give but one example the Tasmanian Workplace Standards Authority has recently released a 91-page draft code on forestry work (an important industry in this state) that makes not one mention of subcontracting even though these practices are extensive in the industry. To be fair it should also be mentioned that the same agency is developing an innovative code in relation to logging operators where these issues are explicitly addressed (including the setting of contractual minimum rates for specific activities including harvesting and transport. See Tasmania, 2001). Further, there is the question of whether agencies will need to develop a new raft of guidance material, codes and regulations that specifically address work arrangements that may be conducive to breaches of OHS law. Again it is fair to say while there is clearly growing momentum to introduce such guidance material etc development it patchy even with regard to those arrangements where evidence most clearly indicates OHS standards can be compromised. In interviews staff in several agencies made the point that the development of such new guidance material was not necessarily an easy task (referring to problems being encountered by other agencies such as those responsible for industrial relations) and that, to some extent, they were subject to the pressure of interest groups and ministerial priorities. 109 --
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Without gainsaying this, strong demand for such guidance amongst unions, employers and other parties is identified in other sections of this report and the wide array of developments discussed in Part 2 of this report provide templates for such developments. There was wide agreement amongst regulators that given variations in the use of particular categories of contingent work between different industries guidance material and codes might be better developed on an industry-specific basis rather than via a series of generic documents, codes or requirements. Finally, in addition to the issue of content there is also an issue of presentation and modes of delivery in relation to guidance material, codes and regulations. This includes the length and complexity of documents, layout and production as well as the targeting of messages. Until recently, much material produced by OHS agencies was lengthy, complex, expensive to produce (ie glossy print on a non-A4 size) and primarily written with medium to large employers in mind. In short, as research has indicated (see Lamm, 1997 and Fonteyn et al 1997), the information strategies adopted were not effective in promoting understanding and compliance by small business and subcontractors, even those represented the bulk of businesses. Over the past decade, OHS agencies in Australia and overseas have modified material produced (more small brochures, documents written with small business in mind, simple non-glossy A4 documents that can be easily faxed, material that can be downloaded from the web) as part of a greater focus on small business. Indeed, this has been the area of greatest responsiveness to changed work arrangements. Nonetheless, a number of regulatory staff interviewed in the course of this project believed that problems remained and more needed to be done in terms of adapting guidance material and codes. In sum, changing employment arrangements require a rethink and some modification of the conventional structure and contents of information provided by OHS agencies as well as codes and regulations. Agencies have started to respond to this but substantial gaps remain to be addressed. There seem to be grounds for agencies to systematically review their guidance material, codes and regulations in the light of this while taking advantage of current developments which may dovetail with such a reconsideration (such as recent initiatives in relation to workplace bullying/occupational violence, fatigue and work-related stress). 4.2.3 The Effect on Participatory Mechanisms Participatory mechanisms at jurisdictional, industry and workplace level play a pivotal role in Post-Robens OHS legislation in NSW and Australia more generally. The need to promote worker involvement in OHS is accepted at international level (see ILO Convention 155) and has strong ethical (workers bear the burden of failure to manage risks at work) and practical foundations. With regard to the latter point it should be noted that there is a persuasive and growing body of evidence on the positive benefits of worker participation in OHS (for a summary see Walters and Frick, 2000). This evidence comes from many countries, including those where participatory mechanisms are not universally mandated by legislation. Further, evidence suggests participatory mechanisms with higher levels of worker involvement were superior to those where involvement was more circumscribed. For example, a recent study of OHS committees in public sector workplaces in New Jersey by Eaton and Nocerino (2000: 265) found committee scope and training had a positive effect on perceptions of effectiveness and committees with more worker involvement reported fewer illnesses and injuries. At workplace level the primary formal participatory mechanisms provided for under OHS laws in Australia are employee health and safety representatives (HSRs) and workplace health 110 --
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and safety committees. Depending on the jurisdiction, other mechanisms include work group OHS dispute resolution procedures and (in NSW) the right of unions to initiate prosecutions under the OHS Act. For example, sections 13-18 of the NSW OHS Act 2000 establish a series of requirements and procedures for consultation and employee participation that are further developed in clauses 21 to 26 of the OHS Regulation 2001 (WorkCover 2002b). The centrality of participation is echoed in the guides, codes and other supporting documentation produced by NSW and other jurisdictions. Consultation and active involvement is not only specifically provided for under legislation it is widely viewed as an essential and effective means of improving OHS by regulatory authorities, unions, employers and other interested parties. Thus, a recent review of consultative arrangements in South Australia undertaken by a tripartite committee (Consultative Arrangements Working Party, 2001) strongly endorsed participatory provisions in the OHS legislation of that state. Downsizing, an increased temporary workforce, outsourcing, and the not-unrelated growth of small business have posed a number of problems for participatory mechanisms under OHS legislation. Most obviously, the participative mechanisms established under OHS legislation in most jurisdictions refer only to employees – and employees of the principal employer – thereby excluding self-employed contractors working at that site and the employees of contractors working on-site even if they are there on a long term basis. In jurisdictions (not NSW) with provisions deeming subcontractors and/or their employees as employees of the principal employer it might be presumed that this means they are entitled to be involved in committees and other participatory mechanisms. However, in at least some if not all of these jurisdictions this is not actually the case because deeming only applies to the general duty provisions (I wish to acknowledge Professor Johnstone for alerting me to this). For example, section 21(3) of the Victorian OHS Act deems subcontractors etc to be employees of the employer, but expressly states that this deeming provision applies only for the purposes of the general duty provisions in section 21(1) and (2) – in other words, it would not carry over to section 22 or the provisions in section 29 onwards which deal with participatory mechanisms. According to Professor Johnstone section 4(2) of the South Australian Act has been interpreted very narrowly by the South Australian Courts and so a seemingly broad deeming provision probably doesn’t have the reach it appears to have. Even if some jurisdictions with deeming provisions that have wider application than that found under the Victorian OHS Act as far as could be determined the effect of this is not pointed out in the relevant participatory provisions. Thus, it is highly unlikely that host employers/principal contractors are aware of this. Further, whatever the interpretation of these deeming provisions, they are very complex and difficult to interpret. A clearer exposition of regulatory obligations to involve contingent and other workers in participatory mechanisms would seem to have a distinct advantage over relying on these vague deeming provisions. The need to consult part-time employees, temporary employees or those working at home is also often ignored in legislative provisions (see for example sections 13 to 18 of the NSW OHS Act 2000). In many cases this problem does not appear to have been addressed in regulations and codes supporting the legislation. However, this is not the case in NSW where clause 23 of the OHS Regulation 2001 (WorkCover 2002b) does require these issues to be taken account of in setting up a workgroup and how to coordinate involvement where contractors etc are involved is elaborated in WorkCover NSW’s OHS Consultation Code of Practice (2001c: 12-13,24). These provisions will be examined in Part 2 of this report.
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Contingent work has other less apparent effects on participatory mechanisms. A growth of smaller workplaces due to downsizing and outsourcing will presumably mean fewer workplaces meet the legislative threshold for establishing joint health and safety committees (or appointing Workplace Health and Safety Officers in Queensland) and less likelihood that an employee health and safety representative will be appointed. In some jurisdictions this threshold is established law in terms of the minimum number of workers employed at the worksite before a committee must be established. This can also occur in a de facto sense where the relevant OHS law specifies that such committees can be established following recommendation of the employee health and safety representative (HSR) because smaller and less unionised workplaces are less likely to have a HSR. A critical question is the extent the presence of large proportion of contingent workers may discourage the establishment of a workplace OHS committee even where OHS legislation formally mandates their establishment. It does not appear that this issue has been subject to systematic investigation. While some jurisdictions may record instances where inspectors have identified a workplace where a committee was required but absent it was beyond the logistical resources of this project to investigate this. Australian Workplace Industrial Relations Survey (AWIRS) data for 1995 provides some indirect evidence of the impact of contingent work arrangements on participatory mechanisms. This revealed that 47% of workplaces with between 0 and 25% part-timers had joint consultative committees (including workplace OHS committees) compared to just 30% of workplaces where more than 25% of the workforce was part-time (Markey et al, 2001). At the same time, there was little difference between these workplaces in terms of the extent to which OHS matters were raised (52 and 53% respectively - the single most important matter discussed in consultative committees). While this report has cast doubt on including part-time workers as contingent unless they are also casual/temporary it needs to be noted that the degree of overlap is substantial in Australia (ie around two thirds of part-timers are also casuals). It is difficult to draw more from this data (unfortunately AWIRS was not repeated after 1995) than to say the presence of large numbers of part-timers in a workplace is not conducive to the establishment of consultative committees and therefore warrants further investigation to identify ways of remedying this. Where workplace committees do exist in Australia there is a question as to whether (and so if how) subcontractors or their employees are to be included in such committees (and the amendment of key definitions, such as designated work groups, or other provisions where appropriate to achieve this). It would seem logical that at least where subcontractors are engaged in activities at an employer’s work site over an extended period that they should be included but with several important exceptions (including the WorkCover NSW OHS Consultation Code referred to above) there is little guidance material to assist employers in this regard. The problematic issue of subcontractor involvement in workplace OHS committees was raised in many of Industrial Reference Groups visited in the course of the project. Individual employer and union representatives spoken to in New South Wales and during visits to other jurisdictions also raised this issue. This suggests that, at the very least, this aspect of the OHS Consultation Code needs to be brought more clearly to the attention of employers and other interested parties. A number of generally large employers indicated that they had now introduced measures to ensure that subcontractors performing substantial or long-term work on their sites were included in site safety committees. As with workplace health and safety committees, the legislative requirements or threshold for the appointment of employee health and safety representatives (HSR) varies from jurisdiction to jurisdiction in Australia. In the ACT, for example, where HSR represent the primordial 112 --
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participative mechanism, the threshold for appointing a HSR is an employer with at least 10 employees. As with committees, agency staff interviewed in the course of the project acknowledged that changing employment arrangements (smaller workplaces, more temporary workers, home-based workers and subcontractors) adversely affected the likelihood of having HSRs. The impact would vary between jurisdictions depending on, for example, the proportion of the workforce in small business and the average size of smaller firms. There was some recognition that particular categories of workers, such as home-based workers including some teleworkers, presented a serious problem in terms accessing either health and safety committees or HSRs. Further, as several regulators observed, the ignorance and vulnerability of such workers makes it far less likely these workers will exercise the other basic ‘participatory’ mechanism found (if not formally enunciated) under virtually all OHS legislation, namely the right to report OHS concerns to their employer or the regulatory agency. Their views are consistent with available evidence. For example, as noted in Chapter 2, some research into downsizing (see for example Saksvik, 1996 and Daykin, 1997) found threats to job security and an over-riding climate of cost control discouraged workers from taking sickness absence, joining health promotion, reporting OHS problems or taking part in OHS committees (for similar findings in relation to contingent workers see Aronsson, 1999). Further, in the course of this project information was obtained with regard to a number of employers that echoed this point. For example, in one large bank undergoing restructuring employees were reluctant to raise OHS issues that might have cost implications. Other factors may also play a part. As noted earlier, a Canadian study of teleworkers found they were reluctant to report health and safety problems for fear this would jeopardize their right to work at home (Tremblay 2001 and Montreuill and Lippel in press). Legislative and associated problems with regard to employee involvement just referred to are by no means unique to Australia. Examining the situation in relation to small enterprises Walters’ (2001: 52-54) recent review of the European Union found that the threshold for employee representation provided for under of law or collective agreements varied widely across member countries but irrespective of this the setting of representative structures faced considerable practical hurdles. He (Walters, 2001: 52) observed: …it is difficult to apply the rules on collective representation in SMEs. Their characteristics (employment trends, sectors of activity, survival rate, structure and culture of management, working conditions) discussed so far contribute to impede the possibility of employees setting up structures of representation.
Walters (2001: 54) concludes: Hence the lack of employee representation in smaller firms seems to be a common feature throughout almost all member states, which has obvious negative implications for the health and safety of workers within small firms.
In a similar vein, a report on temporary workers prepared for the Italian Ministry of Labour and Social Justice (Synthesis, 1997: 13) identified problems in their representation both due to the thresholds for such processes in collective agreements (the primary vehicle for participation in Italy). A report on temporary agency workers prepared for the European Foundation for the Improvement of Living and Working Conditions (Storrie, 2002: 13-15) identified significant representational problems across a range of EU countries, with the practical situation often falling well short of formal entitlements. For example, while temporary agency workers can take part in elections for worker representative bodies in 113 --
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Germany this right is confined to the agency not the host firm and, according to the European Trade Union Institute, few temp agencies have works councils. Referring to Sweden, a report prepared by the European Agency for Safety and Health at Work (2002a: 51) stated: It is also obvious that with a large part of the workers employed on various fixed-term or temporary contracts there will be difficulties in finding representatives for the workers, who are willing to take on the responsibility for maintaining a good quality work environment within the company. In fact the number of safety representatives of the employees has decreased by almost 8% in the last year (Du and Jobbet, March 2000). In the lean organisations of today, time for the internal control of the work environment is considered difficult to allocate both by the employers and the employees, despite the legal demand on the employers to have a functioning system of internal control of the work environment.
A recent study of contingent work in Europe and the United States by Bergstrom and Storrie (2002) also concluded that contingent workers face considerable difficulties in terms of influence and representation due to the temporary nature of their association with a particular workplace. In sum, both workplace committees and HSR mechanisms are built on the presumption of an identifiable and relatively stable group of employees located together or in very regular contact. Some flexible work arrangements effectively break this nexus or weaken it to the point where it would be extremely difficult to use these mechanisms. Essentially similar problems have arisen under range of representative arrangements in Europe. Perhaps the clearest recognition of the problems just raised and the more subtle effects of contingent work arrangements on participatory mechanisms is to be found in a investigation of this issue and subsequent report prepared in South Australia by the Consultative Arrangements Working Party (2001:21) which observed: Participants reported that casual, part-timers, temporary and contract workers tended to be excluded from OHSW consultation and participation processes. Contributing to this was the difficulty in providing training and induction at short notice. Participants suggested that contractors and other temporary employees are not part of the culture of the organisation. It was reported that in some industries, temporary staff are often rostered on shifts where there is no HSR, or other responsible person who can provide induction or other training, This, coupled with the lack of permanency of these workers, means that they have no access to consultative processes. The outcome of this, as participants reported, is that these workers were seen to cause ‘gaps’ in the OHSW system. Their activities are regarded as outside of the organisation’s normal procedures for control of OHSW issues. As one person put it, ‘Contractors would get away with whatever they could if the company didn’t enforce it. They don’t care about OHSW. They just want to get the job done and get out of there.’ Given the increase in part-time, casual and contract work in South Australia, it is important to include these workers in OHSW consultation and means of achieving this need to be addressed.
Amplifying this, an officer with the WorkCover Corporation interviewed for the project stated: 114 --
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We found that organisations that have got temporary labour hire and casual staff will tend to consult with the permanent employees and they may only be five and then you’ve got 300 casual employees and they wonder why people don’t know about policies and processes and people are not being supervised etc. So we found some fundamental gaps. What I also saw as a result of that was some organisations have actually chosen to move away from labour hire and go back to permanent part-time and permanent workforces…They actually said “look we’ve stopped using labour hire, casual, temporary workers and contractors because its far more problematic, it increases injury rates, its harder to communicate with them, we can’t get them to adopt procedures, policies etc…Its (this trend) has only been very recent – within the last 12 months.
Some material relating to individual NSW employers, such as the city outlet of a large retailer, collected during this project identified similar situations where casual workers were largely absent from OHS committees. Although it is seldom mentioned directly in discussions of OHS legislation in Australia it can be argued that another crucial aspect to worker involvement is the right to know about OHS issues relevant to their workplace, the right to be consulted about significant changes affecting that workplace (irrespective of whether a workplace committee or HSR are in place), the right to raise issues of concern with employers, and the right to refuse dangerous work. In some jurisdictions, such as South Australia, OHS legislation requires the employer to provide their employees with OHS information including their legislative rights and entitlements. While this issue was not explored in any detail as far as could be determined there have been few if any attempts to measure compliance with these requirements. The situation with regard to temporary workers may be especially critical along with whether, and under what conditions, such information should also be provided to subcontractors. Further, a number of regulators interviewed expressed the view that such workers might feel intimidated. As one remarked. …the other thing is what happens if a casual worker or a labour leased worker in a host employer says “oh this thing’s not safe here, I want to get this thing fixed.” All of a sudden the consultant for the labour hire firm turns up and says “you’re not required here anymore. Your finished and don’t come back.” They’ve had a call from the host employer (to say) they’re just not wanted…There’s a fellow I spoke to from a labour leasing firm who went to a host employer, he was a boilermaker and they gave him a grinder that had a ‘danger-out of service’ tag on it and he said “I can’t use that one” and the (manager) ripped the tag off and said “well there’s nothing wrong with it now.” These sort of stories keep emanating from industry.
While such views need to be treated with caution they are consistent with the views expressed by unions during the course of this project, the South Australian report on participatory mechanisms referred to above and at least one survey of contingent workers in Sweden (Aronsson, 1999). It needs to be recognized that leased workers in particular are in a vulnerable position whereby the host employer need not give a reason for asking for a worker to be removed and the labour hire firm may be reluctant to pursue the issue (even if it becomes aware of the underlying reason) for fear of losing a client. Further, a number regulators and others (including employers) interviewed for this project indicated that some industries and employers were using labour leasing as a form of probationary employment – a situation that is likely further inhibit the reporting of problems. The practice was seen as increasingly popular amongst large firms. As one industry-specific OHS agency worker observed: 115 --
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…working with the (names a specific building material industry), a common practice there is they try and bypass all the unfair dismissal legislation by initially getting all their staff from a labour hire firm and they use the two or three months as an assessment period and then they ask the labour hire firm “we’d like to employ this person full-time.” So I think we’re finding more employers are using labour hire firms as part of their selection process…You don’t need to give the labour hire company any reason as to why you don’t want the worker. Industrial relations legislation may also be seen to provide workers with a series of basic rights relevant to OHS, notably the right to refuse dangerous work without fear of being disciplined. Cases involving this issue have not been subject to systematic investigation in Australia. In Canada a study of 272 arbitration and labor relations board decisions (Harcourt and Harcourt, 2000) involving situations where workers refused work as unsafe confirmed the hypothesis that boards treated this right as secondary to management’s right to manage. In other words, the right to refuse unsafe work was very restricted with workers having to satisfy a number of rigid conditions (based on the notion that OHS was largely a managerial prerogative) before qualifying for protection from discipline. While, as already noted, there has been no comparable Australian research, but (consistent with points already made) it is probable that contingent workers here would be unlikely to try and exercise this right. Leading on from the last point, it should be noted that the effectiveness of participatory mechanisms depends not only on the formal requirements under OHS legislation but also the infrastructure upon which these mechanisms to varying degrees rely. For example, by and large the training and logistical support for HSRs are provided by unions and they also play a more indirect role in workplace OHS committees (Bohle and Quinlan, 2000:305-309). It is fair to say that as a product of the early 1970s the Robens Report which served as the model for OHS legislation in the UK and to a significant extent also in Australia presumed a level of union membership and influence to make participatory mechanisms work. A overall decline in union membership density over the past 20 years, partly the product of changing employment relationships and less favourable industrial relations legislation (less so in New South Wales than some other jurisdictions), has effectively weakened this infrastructural support both at a general level and, especially in relation to some categories of contingent work such as subcontractors and temporary workers (where union membership levels are on average far lower than for non-contingent workers). There is evidence both in Australia and elsewhere to indicate that union presence affects the willingness of workers to raise OHS issues (see Bohle and Quinlan: 456-457. For a detailed discussion of worker involvement in OHS management see Walters and Frick, 2000). Indeed, international research indicates union presence has a wide range of tangible positive effects in relation to OHS (for a summary see Walters and Frick, 2000). In a recent review of OHS in UK workplaces conducted for the HSE Litwin (2000), a US academic now working for the US Federal Reserve, concluded that unions dramatically improved safety across a range of workplaces. Litwin calculated a non-union office worker was 13 times more likely to suffer an injury than a closed shop union worker on an industrial assembly line. Litwin found industrial action was an effective tool for reducing injuries and concluded injury rates ‘…can be reduced by allowing for co-determination regarding health and safety, even in situations where industrial relations may otherwise be characterized as adversarial’ (cited in O’Neil, 2002). Available Australian evidence also points to a similar situation (see Quinlan and Bohle, 2000 chapter 10). For example, the second Australia Workplace Industrial Relations Survey (Moorehead et al) found unionized workplaces were three times more likely to have a 116 --
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health and safety committee and twice as likely have had a management audit of OHS in the past 12 months. Further, industrial relations legislative changes restricting union access to the workplace have limited their capacity to independently identify and report OHS and other legislative breaches. Prior the 1990s accredited union officials had a fairly unrestricted right of access to workplaces that employed workers covered by their awards/agreements to inspect wages books etc (ie without formal notice and even if none of the workers belonged to the union) but this has been substantially wound back in most jurisdictions. Rapid access to the workplace can be important given the limited inspectoral resources of government agencies, especially industries where there are a large number of small workplaces or where backyard operators are common. For example when union right of entry was restricted in NSW in the early 1990s the Textile, Clothing and Footwear Union of Australia (TCFUA) complained that it was unable to monitor OHS and employment practices amongst fringe operators of backyard/garage factories. Responding to mounting pressure from the union and community representatives, the then Minister for Industrial Relations Kerry Chikorovsky ordered a blitz of workplaces in southwest Sydney by WorkCover and DIR inspectors. This raid identified more than 140 violations of industrial and OHS laws, including unguarded machinery, blocked fire exits (echoes of the Triangle Shirt Waist and Kader fires) and outworker payments of as little as 85 cents per garment (Sydney Morning Herald, 9 March 1994). Although the restrictions on access have since been partially reversed after a change of government the TCFUA has continued to raise concerns about the limitations on access, most recently in the light of serious injuries sustained by a 10 year old immigrant child worker whose hand was mutilated and suffered other injuries when she was caught in a machine at premises operated by Pearl Island Clothing Ltd in 1999 (see Workers Online 15 March 2002). The union argued that only it engaged in pre-emptive inspections but that the requirement to give 24 hours notice of inspections enabled unscrupulous employers to remove children or other undeclared workers from the premises, or in some cases even relocate the business/workplace. This view was confirmed by discussion held with WorkCover inspectors (one who related an incident - clearly a more extreme case - when a backyard factory located in a garage was visited but when inspectors returned the entire garage had been moved). There are also issues of more direct relevance to enforcement here and these are dealt with in the next subsection. In keeping with what has already been argued, a recent British analysis of worker representation (James and Walters, 2002) identified a serious weakening of existing participatory mechanisms. James and Walters argued the regulatory situation needed to be addressed and canvassed a number of options with regard to this. Essentially the same view has been expressed by a report prepared for the European Foundation for the Improvement of Living and Working Conditions (Gourdswaard and de Nanteuil, 2000 cited in Gourdswaard, 2002: 38): This report also raises the issue of workers’ representation and participation within a flexible context. ..This is twofold: it is firstly a problem related to the lack of formal rules or guarantees towards atypical workers ‘ representation and participation; and secondly it is related to the possible lack of interest and mobilisation of these workers by the unions as these workers are less committed to local workplace issues. The whole collective bargaining process is therefore called into question, as strong cooperation between all parties involved in the flexibilisation process seems impossible to achieve.
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Finally, it is important to note that consultative mechanisms should extend to contractors and subcontractors carrying out significant tasks. While employers have an overarching responsibility for OHS there is still a need to recognise that in doing tasks on a regular basis subcontractors may become aware of critical OHS issues or that their input can be valuable in the design of a safe work process. A recent NSW case highlighting the latter arose from an incident in 1998 when a fitter working for Anytime Industrial Services was severely injured while undertaking maintenance work at Orica’s Padstow factory. Justice Kavanagh of the NSW Industrial Relations Commission convicted and fined the Anytime $30,000 but argued large organisations like Orica should allow contractors to play a part in the design of safe work practices (WorkCover Authority of NSW (Inspector Paul Mansell v Anytime Industrial Services Pty Ltd, 2001). Orica was also charged with offences. In sentencing Anytime Justice Kavanagh stated (reported in OH&S Bulletin, October 24 2001: 3): The large corporation imposed its system of work on the contractor. However, a false sense of security as to the safety of its employees cannot remove from the defendant company, the contractor, its obligations under the [OH&S] Act. As an employer, the defendant company has an absolute obligation to provide a risk free environment for its employees. So does the employer conducting an undertaking at its place of work, namely the principle. Large corporations, once they contract out work, must empower within the contractual relationship, the contractor to play a role in the decision-making process even if it is the principal’s defined safety procedures that are to be followed for the risk assessment of the task and the design of the work method to be adopted…. In a world of evolving employment practices, the outsourcing of such tasks as maintenance has become a practice in the industrial world. The responsibilities and burden of the employer in this modern trend are now transposed to the small business contractor in site who employs the maintenance workers. The contractor, in reality, carries little influence and inherits and adopts the selection and design of work methods of the larger corporation.
In sum, there was a general recognition amongst regulators that the growth of contingent work arrangements was undermining key participatory mechanisms in OHS legislation. In some jurisdictions (such as Queensland and the ACT) this problem has been included as part of a review of OHS legislation. In others, agencies indicated that the issue was a real one but they had given no thought to it prior to being interviewed for the project. At the same time, the problem is going to prove difficult to fully address because it has been exacerbated by a not unrelated decline in union presence and in a further ironic twist one potential remedy (namely the Swedish model of roving regional safety representatives) relies on union involvement. However, as noted later in the report, there are ways to address this. 4.2.4 Workplace Inspection, Incident Reporting and Other Administrative Effects The growth of contingent work is having other effects on regulatory infrastructure, including administrative effects that may impact on OHS agencies if not OHS. One effect that impact on agencies as well as OHS is that, consistent with evidence presented in Chapter 2, firms using significant levels of contingent workers experience worse OHS outcomes and as such become a problem for regulators. Staff from a number of jurisdictions made reference to this, citing examples from a wide range of industry settings. For example, referring to the aged care industry one agency officer observed: I’ve been involved in the national aged care award and we go out and validate all these facilities and we found the ones that consistently perform well are the ones that
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say “we’ve minimized the use of labour hire staff and we opt for permanent employees all the time” - the good performers, the ones that are winning best practice awards all the time.
Another obvious example mentioned by a number of agencies is the problem of identifying/locating and carrying out any meaningful of inspection activity in relation to a myriad of home-based workers as well as well as an increase in the number of small businesses/workers who move regularly because tasks they perform have been outsourced (such as project specific telecall centres). A particular problem in relation to home-based work, which has been raised in Australia, Canada and other countries (Legislative Council Standing Committee on Law and Justice Inquiry into Workplace Safety 1998 and Bernstein et al, 2000), is the fear that inspection would amount to a violation of the right to privacy. During interviews for this project regulators in several jurisdictions raised the problem although it is fair to say that there was more concern with the practical difficulties of identifying homes being used as workplaces (for recommended strategies for addressing the privacy issue see Bernstein et al 2000 and Cox et al 2001). Outsourcing has also led to a growth of multi-employer worksites and the increased use of temporary workers and leased workers also presents additional complexity and challenges to inspectorates. For example, where an inspector investigates an incident or hazard on a worksite with multiple subcontractors s/he will have to speak to a larger number of potentially responsible parties and explore a more complex set of interactions – inevitably delaying the process. The flow of contractors in and out of the workplace and turnover amongst contractors will create further complications as will the possibility that some operators will go out of business or reconfigure themselves (on occasion in response to a prosecution or for other reasons identified in this report). Similarly, it will be harder to obtain meaningful worker input or feedback where there is highly casualised and volatile workforce, especially where it necessary to maintain contact over time. It is not so much that the practices just mentioned are new (many are not) but rather that the scale of their use multiplies demands on the scarce resources of inspectorates. One immediate problem posed by some changes in work arrangements (most notably the growth of home-based work and smaller, remote or transient workplaces) is that they add to the inspectorate’s difficulty in identifying/locating and monitoring workplaces. This problem was raised in submissions from unions and number of other parties as well as the final report of a recent NSW government inquiry into workplace safety (see Legislative Council Standing Committee on Law and Justice Inquiry into Workplace Safety 1998). Government OHS agency staff interviewed in the course of this project also repeatedly referred to the matter. For example, a senior officer in one jurisdiction referred to the large number of informal home-based workplaces that could not be located let alone inspected and were therefore effectively beyond the scope of OHS legislative. While informal home-based work is by no means a new phenomenon there can be little doubt it has grown as part of the general increase in outsourcing, small business and home-based work. Certainly, this was the impression of regulators, unions and other parties spoken to in the course of this project (as noted in Chapter 1 irregular ABS surveys of home-based work are likely to understate the extent of this practice). The problem of locating workplaces has been arguably exacerbated by the progressive move to dispense with workplace registration requirements in most jurisdictions. An exception, Queensland has retained workplace registration and charges a fee for registration based on the 119 --
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number of employees at the workplace. However, as employers have made increasing use of subcontractors or workers at other workplaces to undertake tasks for them this has diminished the level of fees chargeable (as the funds recovered go to consolidated revenue rather the Division of Workplace Health and Safety this loss does not directly affect the Division’s funding but does affect the overall revenue base of the government). Further, as will be discussed in a later section of this report, the issue of whether workplace registration should be reintroduced at least in some industries is being reconsidered in the light of growing evidence of the difficulty of tracking the movement of work (under elaborate outsourcing arrangements) in order to ensure that minimum OHS standards are observed. In other words, there has been a push for tracking mechanisms in industries like clothing manufacture where elaborate supply chains obfuscate responsibility for OHS and this has resulted in deteriorating OHS standards. Such tracking mechanisms in turn must rely on some form of workplace registration. Queensland was not the only jurisdiction to see the move away from compulsory workplace registration as a problem in the light of the growth of contingent work arrangements. Indeed, staff in a majority of jurisdictions raised it as a problem. Quite apart from the question of locating workplaces there is the issue of undertaking adequate inspection activities. The proliferation of home workplaces and other small worksites creates a logistical nightmare for inspectors (quite independent of any rules governing entry into homes being used as workplaces). The sheer number and transient nature of some these workplaces is quite beyond the resources of most inspectorates even in terms of a selective sampling of home-based workplaces (other than perhaps those where a number of workers are being employed). Summarising some of the above problems, a regulatory officer (from one of the smaller jurisdictions) observed: …piecework stuff is harder to pick up…you don’t even know where they are and they are unlikely to be knocking on the door to say they don’t think their working in a good OHS environment because they tend to be more desperate about just having some work.
The resourcing issue requires serious consideration. In a number of industries where subcontracting has long been pervasive, such as home building, there are endemic compliance problems. For example an a WorkCover NSW Construction Team Intervention Group campaign in metropolitan Sydney and the Central Coast found non-compliance with OHS regulations at 77.15% of the 400 worksites visited and only 11 of the 452 contractors involved had a systematic means of managing OHS (WorkCover News February-April 2001, 44: 8). The Team issued 184 verbal directions, 369 improvement notices, 7 prohibition notices and 14 infringement notices. Inspectors attributed poor OHS too inadequate supervision (231 cases), inadequate training (204 cases), ignorance of OHS legislation (167 cases), inadequate communication to non-English speaking workers (76 cases), poor programming by the principal contractor (72 cases) and poor programming by other site trades (46 cases). Subsequent inspection rounds by WorkCover have confirmed this high level of noncompliance (see WorkCover News March-May 2002, 48: 8). A further round of inspections of 230 residential construction sites revealed a similar pattern, with more than 75% of failing to meet safety standards and inspectors issuing improvement or prohibition notices at 190 sites (NSCA’s Safety Bulletin, No.101 July 15 2002). While home building may be seen as an extreme case the evidence presented to this report is consistent with a conclusion that the expansion of subcontracting and other flexible work arrangements in a range of industries will 120 --
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be conducive to an increased level of non-compliance. Even in the unlikely event that the effects were marginal or concentrated in a number of industries the overall impact of limited inspectoral resources could be severe. This aspect of the shift in work arrangements has been largely ignored but deserves serious consideration. Again, it is worth noting that the logistical problems that contingent work arrangements pose for inspectorates are by no means unique to Australia. In his review of OHS in small enterprises in the European Union Walters (2001: 143-67) identifies the severe limitations in inspectoral contact and enforcement activity even in countries marked by a large regulatory ‘footprint’ such as Sweden. The absence of union or insurance influence compounds the problem. Another administrative effect that is already directly affecting OHS agencies is how inspectors should address work arrangement-related issues when they visit workplaces. The move from a reliance on prescriptive OHS standards to a focus on process and performance standards in OHS legislation over the past 20 years placed significant demands for adjustments on the part of the inspectorate. The problems posed by changed work arrangements have been seen to compound these demands and senior regulatory agency staff in a number of jurisdictions expressed the view that inspectors lacked the training and confidence to deal with them, especially older inspectors with a predominantly trade background. As the regulatory policy adviser in one jurisdiction observed: The aspect that has come through to us recently has been the fact that inspectors don’t feel confident to deal with issues relating to things like stress or issues relating to things like home-based work. All these new concepts and all this stuff to do with subcontracting and contracting, when you look at the age profile of the people we've got in the inspectorate, for instance, they're used to the olden days…they inspected for certain specific regs, they went out with their rule book.
In addition to the issue of inspectoral understanding and confidence there is also problem in relation to sheer complexity. Increased used of subcontractors, multi-employer worksites, identifying who is the employer and the like are rendering inspectoral investigations and prosecutions of specific incidents increasingly complex. Representatives from one jurisdiction (Queensland) referred to the inordinate amount of time spent on company searches in order to identify the employer and such problems are extremely unlikely to be confined to this jurisdiction. Another jurisdiction (Tasmania) referred to not-unrelated problems connected to the transmission of business or business succession in subcontracting arrangements in some industries. Regulatory staff made reference to the contract cleaning industry where they believed the turnover of contracts (and engagement of new staff) was used to avoid accumulated industrial entitlements (like long service leave), with the new successful bidder often involving key principles from the previous contractor. Though this is primarily an issue of securing industrial relations entitlements (and such practices are not new, having been identified more than 20 years ago), practices that are conducive to increased workforce volatility can have adverse effects in terms of OHS and access to workers' compensation. One effect directly relevant to OHS (and workers’ compensation too) is the problem of phoenix companies who past record of OHS breaches (a critical factor in the determination of penalties by courts) is effectively disguised by the legal reconfiguration of a new corporate entity. In some industries, such as construction, this practice has been seen as a serious problem (for evidence of such a case entailing the death of a 17 year old building worker brought before Cole Royal Commission see CCH Latest OHS Headlines 7 June 2002). 121 --
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An additional complexity raised relates to the difficulties posed by frequent changes of employment status in some industries such as construction and road transport where workers may move from being self-employed, to a small employer then to an employee and back to subcontractor in the space of a short period. As the next chapter will note, the volatility and turnover associated with outsourcing creates analogous problems in relation to the administration of workers’ compensation. Another likely administrative effect is in relation to incident notification. In a number of jurisdictions OHS legislation requires an employer to notify the government OHS agency (WorkCover or its equivalent) of any serious incident that occurs in their premises or involving their employees. It is plausible that the growth of multi-employer worksites and outsourcing arrangements may lead to a greater level of ignorance or confusion amongst employers in terms of who needs to report an incident and it could also make it more difficult to detect non-reporting. When asked about this staff of virtually every agency affected indicated that non-reporting was a significant problem and several also expressed the view that things like outsourcing arrangements had contributed to a level of confusion amongst employers. Their impression that non-reporting was a significant problem has been confirmed by independent Queensland research cited elsewhere in this report as well as research undertaken by the agencies themselves. For example, ComCare officers referred to extensive work (targeted investigations) undertaken on the issue 18 months earlier, the results of which were generally consistent with evidence of under-reporting identified by state jurisdictions. Finally, the extensive use of contingent work in some industries raises questions about the scope of inspectoral activity and the need to relate this to other labour standards. The 1994 inspectoral blitz of clothing workplaces in NSW referred to earlier, highlights the potentially close association between breaches of minimum standards under industrial relations legislation and breaches of OHS legislation at least in some industries. Such an association is hardly surprising in industries where there are strong competitive inducements for evasion and given an effective weakening of both direct and indirect standard protections as part of recent changes to industrial relations laws and minimalist and largely complaints-based enforcement activity by most industrial inspectorates in Australia. There is evidence from a number of industries such as trucking (Quinlan, 2001) that the failure to pay minimum wage rates can lead to excessive hours of work (as workers strive to meet an target income) and other dangerous work practices. Complaint-based enforcement will not address these issues since complaints are least likely to come from workers with little tenure or security who fear this may damage their future employment prospects – precisely those that are the subject of this report – and there may also be a tendency to make complaints after the job is ended (as accepted even by industry in the trucking industry. Quinlan, 2001). During the course of interviews for this project a number of regulatory officers pointed to evidence of the latter (ie the lodging of complaints after a job had ended) in a number of other industries, including construction and agriculture. Since a number of contingent work arrangements reduce, render problematic or entirely bypass existing labour standards it is hardly surprising that the evasion or non-compliance in this arena should also extend to OHS standards. During the course of interviews, regulatory staff in a number of jurisdictions (such as Queensland, South Australia and Tasmania) indicated their belief that there was an association between contingent work arrangements or small business (including subcontractors) and a weakening of or non-compliant behaviour in relation to industrial relations and OHS standards. As noted elsewhere in this report, selfemployed subcontractors remain largely exempt from minimum labour standards laid down in 122 --
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awards and agreements. Likewise, while minimum wages and other conditions apply to temporary workers enforcing them is a difficult task in industries with little union representation and high levels of labour turnover such as hospitality. Regulators also noted that when a task was outsourced and employees were used by the contractor they frequently worked under awards or agreements specifying inferior wages and conditions to those which applied to workers undertaking the task prior to being outsourced. At the very least these regulatory staff believed there was sufficient anecdotal evidence of a link between contingent work and OHS and industrial relations breaches to warrant closer investigation and if confirmed to consider the use of coordinated enforcement activity. At the same time, the challenges posed by changing work arrangements may have some positive effects, facilitating a better understanding of work organisation aspects of safe work systems more generally and also reinforcing the growing interest amongst agencies in better evaluating both specific programs and overall strategies. The value of multi-agency inspectoral activity has already been alluded to. During visits to most agencies views were expressed that more attention needed to be given to evaluating the effectiveness of inspections and specific programs. Attention will now turn from more general issues to those pertaining to particular work arrangements. 4.3 Issues in Relation to Particular Work Arrangements 4.3.1 Outsourcing/Subcontracting Like labour leasing, virtually every regulatory agency spoken to saw subcontracting as posing a problem in relation to achieving compliance with OHS standards. In general it was viewed as a source of considerable concern. A ComCare representative suggested that they had probably experienced fewer problems due to the restricted industry/occupational mix of federal employees in comparison to other jurisdictions (ie fewer located in high risk industries). Nonetheless, they went on to indicate that: …but certainly in recent years our focus has turned more strongly to the issues arising out of contracts and getting your contracts right and ensuring your OHS responsibilities still get carried forward through those contracts.
Another officer from the same agency reinforced this point and indicated the level of attention was a direct consequence of their knowledge of serious incidents: It is certainly an area, one of three areas we have identified in OHS being a significant under-performer in terms of conformance….and we have two other areas, that is risk management and OHS skills training, that are not anywhere near the mark that they should be…Because we are such a small jurisdiction and …a lot of our incident investigations are conducted by the state jurisdictions…its probably going to be more rare that we don’t know about an issue.
It was noted that, in addition to critical incident investigation, ComCare undertook a program of planned investigations using the Victorian audit system, SafetyMAP, and three priority areas had also been identified as a result of this.
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There is a clear pattern of prosecutions over a number of years that employers cannot delegate their duties in relation to OHS by simply outsourcing an activity. As Johnstone has observed, as a matter of principle, both the English House of Lords and the New South Wales Industrial Relations Commission have stated that the general duty provisions are non-delegable (see the House of Lords decision in Octel (1996), the subsequent English Court of Appeal decision in Gateway Foodstores (1997) and the NSW IRC decisions in George Weston Foods (1999), Waste Recycling & Processing Services of NSW (2000) and Byrne Civil Engineering Constructions (2001)). Even so, representatives from one jurisdiction (not NSW) indicated their belief that employers were often in ignorance of this even in industries, like construction, where prosecutions had occurred. One regulator cited a case where the employer had undertaken a risk assessment to identify high-risk activities and had then allocated these tasks to subcontractors. It was suggested that the level of prosecutions, when spread across the whole of the state (and tens of thousands of workplaces), was simply incapable of communicating a meaningful sense that a prosecution was even a remote possibility. It was suggested that there was a presumption that outsourcing commercial risk also outsourced legal obligations. Perhaps more disturbing, the view was also expressed that a significant number of the agency’s inspectors were equally ignorant of the actual regulatory situation in this regard. As noted earlier, multi-tiered subcontracting appears to present a particular problem in relation to implementing the general duty provisions of OHS legislation, particularly in some jurisdictions. The problem did not pertain only to OHS legislation but to other laws dealing with minimum labour standards. In Tasmania, for example, regulatory staff (and in this jurisdiction all employment/industrial relations, OHS, workers’ compensation and road transport staff are located within the same agency) argued some employers in the construction and forestry industries were using multi-level subcontracting to evade compulsory contributions under long service leave legislation. Even government business enterprises were not immune from engaging in these practices. Again, as noted earlier minimum labour standards can affect OHS and these connections are considered later in this report. Drawing the views of all the regulatory agencies, IRG members and others spoken to together (along with available survey evidence) it would seem that knowledge amongst host firms, contractors and subcontractors (and workers) about the respective responsibilities under OHS law is patchy and can vary considerably even within industries, including those with a long history of using these arrangements. For example, large firms in the commercial building industry generally appear well aware of their over-arching responsibility for OHS and have taken appropriate measures (including the Memorandum Of Understanding reached by major firms in NSW and discussed in Part 2 of this report). However, the situation in the housing sector is more problematic. While some large housing constructors and even medium sized niche builders are aware of their responsibilities have subcontractor management systems in place the level of awareness especially amongst small operators appears minimal. One government agency representative, who had spent considerable time working in the building industry, expressed the view that where a builder using a group of self-employed subcontractors and sub-subcontractors was building a house the prevailing view was that each self-employed worker was entirely responsible for his/her OHS (ie there was no vertical chain of responsibility). It was also his experience that agency decisions to investigate these incidents let alone consider a prosecution had, in effect, lent credence to this presumption. It needs to be stressed that these perceptions are largely based on anecdotal evidence (though often from persons with considerable contact with industry over many years). It also raises the 124 --
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question of how this is to be reconciled with the growing interest in subcontractor safety management evidenced in industry and OHS practitioner conferences, the development of specific industry products such as the CCH contractor safety management manual, the growth of law firms, consultants and others offering specialized advice in these areas not to mention an increasing body of material produced by regulatory agencies. There appear to be reason to survey the attitudes and knowledge of employers, labour hire agencies and the like across a range of industries in order to gain a better understanding of their awareness of their obligations in relation to subcontractors, temporary and leased workers which could form the basis for more informed policy interventions. A knowledge assessment and education program may also be needed in relation to inspectors. Another issued raised by some regulators was the relationship of subcontracting and other contingent work arrangements to the adequate maintenance of plant and equipment, especially in a context where ticketing/certification requirements had been removed and the equipment was leased as well as the workers. This mirrors claims (by drivers, insurers and others) that the competitive pressures of extensive subcontracting were leading to ‘corner cutting’ on maintenance in the long haul trucking industry (Quinlan, 2001). To some extent WorkCover NSW has already moved to address some aspects of this issue as part its increasing focus on groups other than employers like designers and suppliers. In 2001, for example, WorkCover NSW (2001b) issued a fact sheet on plant hire and lease, indicating what suppliers need to know in terms of complying with the OHS Regulation 2001. 4.3.2 Home-based Work, Telework and Telecall Centres Home-based work refers to a situation where work is carried out in the worker’s home (although in some industries like clothing a number of workers may work from a home owned by a relative or subcontractor) rather than the employer’s premises. Historically, the term usually referred to situations where workers undertaking such tasks were entirely engaged at home (and as subcontractor rather than employee). However, the current situation is more complex, with many workers spending some part of their time working time (say a day or two a week) in addition to full-time home-based workers. Home-based workers can be employees or self-employed and their legal employment status is frequently ambiguous. As noted in Chapter 1, some forms of home-based work are associated with the use of children in a unpaid helper capacity or as paid workers. In general, regulatory agencies have only recently begun to give renewed attention to homebased work. In some agencies like NSW attention had been directed at those who worked only from home rather than those who work both from home and their employer’s premises (indeed, some agencies were still grappling with how to manage home-based work for their own staff). ComCare had issued guidance material some years ago for primarily aimed at the second type of home-based work (ie employers spending periods or part of their time working from home) but this had lapsed. One agency staff member noted that while they continued to get some employer requests for the material their impression was that home-based work was not being as widely embraced by the Commonwealth as previously. That home-based work was seen as a phase rather than a permanent shift in employment practices was attributed in some measure to the OHS and workers’ compensation problems it raised. It was suggested that ad hoc arrangements (such as the provision of work-based computers at home for senior 125 --
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staff) continued (and it is likely similar situations apply to senior staff in the state and territory public sector although this point was not pursued in interviews). Regulators in several jurisdictions made explicit reference to the diversity of home-based work as making it especially difficult to develop guidance material or codes. There seem to be grounds for agencies to review their guidance material, codes and regulations in the light of this while taking advantage of current developments which may dovetail with such a reconsideration (such as recent initiatives in relation to workplace bullying/occupational violence, fatigue and work-related stress). Home-based work needs to be viewed in the context of other alternative arrangements (both formal and informal) that reflect a merging of work and non-work activities. Managers in one agency raised the issue of workers who brought their children to work as the ‘flip-side’ of home-based work, noting the great divergences in terms of facilities to accommodate this even amongst large public sector employers. They expressed concern that where adequate facilities were not provided, or safeguards made in terms of design etc (such as the size of mesh or barriers on stairwells or balconies) then the employer was exposing themselves to a serious liability by failing to protect ‘third’ parties at the workplace. Given the prevalence of dual working parents, the agency believed employers needed to give more serious attention to this issue. During interviews with agency staff, the provision of home-based health care emerged as issue of particular concern in virtually every jurisdiction, in terms of increased risks of injury and occupational violence – something that is agreement with an emerging body of published research (see Chapter 2 and Appendix 1). Regulatory agency managers interviewed also expressed the view that they saw this area as generally being poorly understood and managed by employers, including large public sector organisations. One indication of the degree of concern here was the ability of agency staff to cite serious cases with which they were familiar of which had been brought to their attention. One agency noted that soon after the introduction of a ‘early release’ scheme from hospitals there was evidence of an increase in injuries (from a range of sources including motor vehicle incidents) and concerns about occupational violence amongst community nurses (who visited earlyrelease patients). This led to the development of a set of protocols to manage home visits – though why no risk assessment was undertaken prior to the change in order to identify and remedy potential problems is a moot point. The issue was also of some concern to ComCare. A manager noted that while home-based visits by nurses for the Department of Veterans Affairs (DVA) had been outsourced to a private contractor they were aware of serious incidents (including one where a disgruntled client had held a nurse hostage for some hours) and those incidents resulting in compensation claims understated the magnitude of the problem. The regulatory agency in another jurisdiction indicated its belief that risks of home-based care/de-institutionalisation were significantly magnified where casual workers were used as such staff were unfamiliar with both the home and the client and others family members. Regulatory officers said this conclusion had been drawn from a number of operational cases, especially with regard to staff virtually ‘locked’ into residential care, known colloquially as ‘safe houses’, (for a shift of say 12 hours) containing clients who had previously been institutionalized. De-institutionalisation of mentally disturbed patients to ‘safe houses’ was viewed as problematic even where it didn’t involved casual/leased staff. An example was 126 --
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cited where an attempt was made to relocate to staff member who had responded inappropriately when assaulted by a client (he hit back). However, the agency found not one of the alternative residential care providers would indicate that a client assault on the staff member was unlikely in its premises. As discussed in Part 2 of this report some measures have been undertaken to address this but the case just cited highlights the difficulty of addressing all the potential problems posed. The case of home-based care and de-institionalisation to other locations such as ‘safe houses’ highlights that work is not simply being relocated to from the employer’s premises to the worker’s home but to other locations that may entail new risks. During the course of interviews for the project, other examples were given of where workers were working in isolation or small groups as a result of de-institutionalisation, other work reorganization programs or due to the geographic isolation of clients or customers. For example, the federal government uses mobile review teams in a number of areas (such as CentreLink) to visit remote communities or individuals (such as those under palliative care) unable to access normal offices. As already noted, one challenge for regulators is that even within a particular category of work there can be a huge diversity of arrangements involving significant disparities in working conditions. This diversity is most apparent in the case of home-based work but can also be found in more unexpected quarters such as telecall centres which range from purpose built and modern centres which are part of a larger organisation, through to medium to large centres that essentially subcontract to limited range of clients and on to small ‘backyard’ operations using rented space to a series of short telemarketing contracts. A diversity of centres may be found even with the same firm. One regulatory agency representative referred to an incident where he asked a very large employer how many telecall centres they had and the manager had responded by asking ‘you mean as of today?’ before elaborating that while the organisation maintained a number of large centres performing ongoing customer-contact tasks it also used a varying number of often small centres to perform specific limited-duration tasks such as specific marketing campaigns. A number of regulators in other jurisdictions drew a distinction between large centres operating to service the clients/customers of large organisations (in terms of inquiries, payments etc) and smaller and more transient operators, often in telemarketing, using rented space and engaging temporary workers (such as university students) who were paid under simple incentive schemes. The latter were seen as more problematic although the evidence is often based on only a handful of incidents making it difficult to determine how extensive the problems are. For example, one policy officer referred to complaints their agency had received from parents about their children (ie university students and other young adults) being harassed to attend unpaid meetings after hours or suffering occupational violence or discrimination. A number of industry and union representatives spoken to also suggested that OHS conditions varied substantially between telecall centres engaged in telemarketing and those involved in service provision (such as providing assistance with computer problems). These suggestions would seem to warrant further investigation. As with home-based work, telecall centres have only recently attracted the attention of OHS regulators in Australia (although in the case of home-based work regulatory interest is better described as a re-discovery of the problem). Opinion varied as to the extent of OHS problems these centres posed but the weight of sentiment in both interviews (and initiatives agreed to at a national meeting of agency representatives in May 2001) was that this type of work 127 --
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arrangement posed serious problems and warranted attention. Their views are consistent with a growing if still fragmentary body of evidence emerging from research undertaken by academics and government agencies as well as surveys by consultants and unions (for an example of the latter which also refers to other surveys see Australian Services Union, 2002). Research, reports and surveys point to high levels of verbal abuse (from customers) and workrelated stress amongst telecall centre workers (especially amongst those whose performance was monitored), acoustic shock, musculoskeletal and eyesight problems, voice loss, poor/uncomfortable working conditions (the ACTU Call Centre Unions Group, 2002; Australian Services Union, 2002: 4, 13-16. See also research review in Chapter 2). While union complaints of 'acoustic shock' were initially greeted with skepticism but recently the problem has been confirmed by surveys undertaken by company consultants (one such study for Telstra identified 103 cases within the organisation. CCH Latest OHS Headlines 27 May 2002). In 2000/2001 the Health and Safety Laboratory (HSL) of the Health and Safety Executive undertook a survey of 1130 call centre workers (a 38% response rate) to determine working practices in UK call centres (the results of which were summarized in HELA, 2001). The survey identified a range of physical and psychological health risks as well as example of good and poor working practices. Amongst the problem areas identified were hot-desking (which most staff found to be disruptive and depersonalizing), unclean workstations (especially where hot desking occurred), inadequate air-conditioning, poor work station design/spacing and equipment maintenance; a lack of consultation on the scheduling of breaks; performance targets and qualitative monitoring practices/supervisory pressure). While problems might be more severe in small telemarketing centres even the large service centres were seen to pose significant problems by Australian regulators interviewed for this project. According to the relevant manager in one jurisdiction, staff in the large specialist telecall centre operators they were familiar with staff were predominantly employed either full-time under short-term fixed contracts (of say 3-6 months duration) or on a part-time and casual basis, with very few permanent full-time staff (mostly supervisors). Those on shortterm contracts were, subject to satisfactory performance, often extended. On the other hand, the short term enabled operators to rapidly adjust their workforce to meet downturns in activity due to changes in economic conditions or loss of a major contract (and transfers of ownership or contracts in a short period of say 12 months were not uncommon). This was seen to encourage frequent relocation by employees with different employers. From the agency’s perspective, this level of centre/contract and staff volatility created problems in terms of ensuring compliance with OHS legislation. The manager observed: A number of staff eventually told me “the owners have just changed, we’ve had to change documentation, policies and procedures” (and) lone behold three months later the company changes again and we’ve got to go through the whole process (again). There’s no fixed system in place. It is consistently changing, depending on who’s got ownership of the business at the time and the systems they’ve got in place, which obviously has significant implications for the reporting of OHS issues. And when it comes to the psychological issues, they’re for call centres …high-level stress, complaints being made, not being dealt with very well at all. Having said that, they don’t even deal with the very basic things like ceilings…coming down around their ears. Ergonomics – someone needs a chair or a good headset – it might take them six months to get…I don’t if its running on the ‘smell of an oily rag’ or whether its their particular view that they believe the industry is safe? Its white collar, you’re working in an office environment, what the hell could hurt them here. So maybe it’s the perception of call centre work.
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Reference was also made to the highly structured and repetitive nature of the work with little if any opportunity for altering tasks through the course of the working day, electronic and other surveillance of performance according to a narrow set of criteria, and an autocratic management style that might descend to minimizing/discouraging breaks (including toilet breaks). It was noted that workers with the larger operators tended to be paid a fixed wage plus the opportunity to earn bonuses while more contingent payment (such as piecework that might not even guarantee meeting minimum wage rates) was more common in small and transient telemarketing operations. Nonetheless, even in larger operators bonuses were seen to put pressure on workers to finalise calls – a difficult and stressful exercise in the case of an irate customer. By way of contrast, predominantly home-based teleworkers did not arouse the same level of interest or concern amongst regulators. A number of issues were raised in the course of interviews (such as their problematic access to consultative/participatory mechanisms) but overall few regulators appeared knowledgeable in this area. A possible reason for this is that, like most forms of home-based work (and excluding a few extreme cases like clothing outwork which have been the subject of publicity and community/union campaigns) homebased work remains - as it was 100 years ago - a largely invisible activity. Even where telework isn’t home-based but mobile or shifting between locations it is still likely to remain largely invisible to regulators. Another possible reason is simply that regulators have come to conclusion that, contrary to earlier concerns and some studies (see for example, Huuhtanen, 1997 and Ertel et al, 2000), telework does not present major OHS problems. Consistent with the latter interpretation a recent UK Health and Safety report on the implementation of the EU Directive on display screen equipment (HSC, 2000: 15) observed: 64.Telework is a further - but not really "new" - dimension of DSE work, which has been expanding. There is little evidence that teleworkers are exposed to major risk to health and safety, or to any risks that are unique to this kind of work; but where working practices are not well designed, teleworkers may suffer from things like social isolation and stress. The other major difference between teleworkers and other workers is that workstations and working practices in the home cannot so easily be inspected by the employer (or enforcing authorities). This makes it particularly important for teleworkers to receive sufficient information about health risks, and training in how to set up and use their workstation. 65. We consider that teleworkers can be protected to a large extent by applying existing health and safety law to them in the same way as to other workers. (In the UK the Health and Safety at Work Act applies to telework, and the Display Screen Equipment Regulations apply where DSE users are employed to work at home). In addition to promoting good working practices in telework to reduce actual risks, we suggest it should also be an objective to contain misplaced fears about health and safety in telework. It is desirable to ensure that proper weight is given to potential benefits of telework, including reduction of unemployment and reduced environmental damage from commuting.
While the initial fears of widespread OHS problems associated with telework may have been alarmist this report could not find research to justify this rather sanguine response, especially when the very limited knowledge of OHS outcomes amongst teleworkers (or most other home-based workers for that matter) is taken into account. Other recent reports, such as one conducted for the ILO (Di Martino, 2001: 95-99), do not adopt this line although the evidence remains very fragmentary. The HSC report itself acknowledges major problems in relation to inspecting and thereby verifying conditions in home-based telework. Further the report fails to acknowledge the regulatory problems that can arise from variations in the employment status 129 --
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of teleworkers that has been identified by other examinations the subject (see De Vries, 1996; Bernstein et al 2000 and Di Martino, 2001). Given the paucity of evidence there are grounds for some investigative research in this area.
4.3.3 Labour Hire/Labour Leasing During the course of interviews of this report labour leasing was the issue most frequently raised by regulators, employers and unions as a problem. Labour leasing can add a problematic dimension to situations where regulation was previously seen to be entirely adequate, and do so in ways that are by no means apparent. For example, the OHS legislation of all jurisdictions make unambiguous reference to the duty to provide employees with adequate induction and training and a similar obligation can be deduced at common law. The role of providing such training is normally seen as that of the employer. However, where a worker is leased onto a work-site some confusion has arisen as to the respective responsibilities of the host employer and the labour leasing agency. An employment lawyer (see, for example, Johnstone, 1999) is likely to suggest both parties have responsibilities in this regard. Further, the NSW IRC has made this point very clearly in the various Drake and Warman cases – especially the (1999) Drake decision in the Court of Appeal. It might be worth citing the exact words of the court. For example, in Drake Personnel Limited v WorkCover Authority of New South Wales ((Inspector Ch’ng) (1999) 90 IR 432 at 455-56 the Industrial Relations Commission in Full Session stated that: ... an employer who sends its employees into another workplace over which they exercise limited control is, for that reason, 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. … A labour hire company cannot escape liability merely because the client to whom an employee is hired out is also under a duty to ensure that persons working at their workplace are not exposed to risks to their health and safety or because of some alleged implied obligation to inform the labour hire company of the work to be performed. … This obligation would, in appropriate circumstances, require it to ensure that its employees are not instructed to, and do not, carry out work in a manner that is unsafe. In the present case, it seems to us that this would require, at the very least, that the appellant give an express instruction to the client and its employee that it be notified before the employee is instructed to work on a different machine.’
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Indeed the Commission indicated that it may be that the labour hire company’s obligations will not be met by a contractual term in the contract with the client that the employee not be transferred to other work without prior notice. The labour hirer has a positive obligation under section 15(1) to directly supervise and monitor the work of the employee to ensure a safe working environment.
However, in practice there is considerable debate as to the respective responsibilities of each party and interviews undertaken in the course of this project merely served to confirm this despite the recent prosecutions that might have been hoped to clarify this (see Part 2 of this report). There was some divergence of opinion amongst those interviewed about the existing regulatory approach and as to how best to clarify the respective legal responsibilities of labour hire firms and host employers. Almost all regulators as well as representatives of host employers and unions favoured the existing situation of shared responsibility while labour hire industry representatives generally believed their agencies should either have a more narrowly defined prescribed set of responsibilities (eg for general training) or that legal responsibility should rest entirely with the host firm. They were apt to justify this on the basis that they could not control workers on the host employer’s site and nor could they predict and assess all the risks that the employee might encounter, including changes to work processes and supervision. Several regulatory agency representatives interviewed acknowledged these difficulties, with one suggesting that most the risks resided in areas under the control of the host firm. As noted below, reference was made to alternative model under the group-training scheme of prescribing exclusive responsibility to host employers for the period they host the apprentices (s10 of the Queensland Workplace Health and Safety Act). However, this was not a view that found favour with the overwhelming majority of regulators (including those responsible for workers’ compensation). They expressed the strong view that many labour hire agencies failed to give any real consideration to OHS when they dispatched workers, failing to check the workplace and the qualifications of those involved (a view the industry would dispute). Queensland Division of Workplace Health and Safety representatives noted that the group training scheme scenario in Queensland was not analogous because, unlike labour hire agency workers, apprentices in these schemes actually worked with the training provider (citing an example where apprentices were engaged in building cabinets and other off-site work) when not engaged by a host employer. It was also stressed that this provision (ie s10) was introduced to provide additional protection to an inexperienced and vulnerable group of workers not to exempt the supplier (ie group training provider) from responsibility. Nor had the Division accepted arguments from the labour hire industry that a similar measure in relation to it would afford leased workers with additional protection. In other words, the circumstances of group training schemes were seen to be unique. Further, interpretation that s10 has the effects that is claimed is at least arguable. Assessing this section as part of a review of a draft of this report Professor Richard Johnstone states: I have looked at section 10 of the WHSA 1995 (Qld). Its not clear to me that that section exempts the group training organistion from the general duties. On my reading of the section, it might simply be interpreted as confirming that the host employer bears the employer’s duty under section 28(1) and that the apprentice is in that situation a worker of the employer host employer. The group training organisation will still be an employer or self-employed person and because of that would owe duties to the apprentices as “others” under section 28(2) or 29. I think it is arguable
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that section 10 doesn’t change this. The section doesn’t appear to restrict the general principle that the general duty provisions are not delegable and can overlap in application.
In short, even the claim that group training can be treated as a special case is open to question. Leaving this question to one side, regulators believed that any attempt to partition off the responsibilities of labour hire agencies under OHS law was unjustified, would undermine holistic resource efficient and effective enforcement strategies, would set a dangerous precedent for similar claims in relation to analogous arrangements like outsourcing, or would effectively release one party from responsibility for the OHS consequences of the more complex work arrangements its very operations encouraged. As in other areas like outsourcing there was a concern amongst regulators that the growth of labour leasing arrangements was effectively leading to special pleading for lower OHS standards on the basis that these arrangements were too difficult for the parties (employer, labour hire firm or subcontractor) to control the attendant risks. At the same time, there was awareness amongst regulators that there was some ambiguity as to what it was reasonable to expect from labour hire firms (eg precisely how much risk assessment should they undertake and what auditing practices might be considered adequate). This recognition is clearly a factor in the recent production of OHS guidance material for the labour hire industry by an increasing number of jurisdictions. Returning to the issue of prosecutions, one limitation to the ‘learning’ effects of prosecutions is the proliferation of labour hire agencies, many of them small and some short-lived. While there is evidence that larger labour hire agencies have professionalised their management of OHS over the past five years it is doubtful the same applies to smaller operators, especially those in the start-up phase. To illustrate this, representatives from one jurisdiction described a recent incident where a worker leased into a galvanizing plant – the first placement of a new labour hire agency - was killed within six hours of commencing work. At the time, the host firm was already being investigated for poor industrial safety practices. Yet, as agency representatives emphasized, the permanent workers were experienced and to some degree aware of the risks while the new worker was inexperienced as was the firm supplying his services. In this situation prosecution of both the agency and host firm (then being considered) might result and for the agency the incident may cause its closure but there is little if any regulatory ‘learning’ since other agencies will are starting up almost certainly ignorant of these risks. A number of general observations can be made at this point. First, in labour leasing (and in other areas like telecall centres too) regulators may need to recognise and adapt their strategies to address significant differences, for example between large stable operators and small ephemeral operators, and according to other characteristics like operational specialization. In relation to operational specialisation issue our interviews with representatives of the Minerals Council and other suggested that the mining industry, unlike other industries, tends to use small highly specialized firms to provide leased labour (though some larger agencies do provide a specialized product). Second, to the extent that labour leasing contributes to an increase in the number of temporary workers in a given industry then it is difficult to see how this wont increase the safety risks associated with ‘startup’/induction, inexperience and inadequate training, especially in relation to those workers supplied by small, less well-resourced or newer agencies. A particular problem here, and one referred to by those interviewed, was that formal safety rules only governed a fraction of the 132 --
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potential safety risks in workplaces, with others being the subject of informal understandings amongst experienced workers. A further regulatory issue has been instances where the leased worker has been expected to undertake induction, training and even drug/alcohol and health testing at their own expense. In some cases this is an informal practice while in other cases it is formalized in agreements signed by the worker. Again a lawyer is likely to point out that neither the host employer nor the labour leasing firm can ‘contract out’ of their legislative and common law obligation to provide training. However, again we can see how these work arrangements can readily become predisposed to behaviour that at least indicates ignorance of the law if not an outright attempt to evade regulatory responsibilities. The competitive pressures on labour hire firms to absorb such costs by transferring them to the leased worker is hardly conducive to a committed approach to compliance with OHS standards. The extent of these practices is unknown though they were referred to by a number of persons (from government, industry and unions) across a range of jurisdictions spoken to in the course of this project. Another possible illustration of regulatory problems was raised in relation to rail freight. The shift from government monopoly of the rail network has result in a proliferation of private rail freight companies (upwards of 40 although the recently privatized merger of National Rail and Freightcorp is undoubtedly by far the largest). A number of drivers interviewed (union members) suggested that the multiplicity of companies made it more difficult to ensure the overall safety of the rail network (specific examples of this were cited). Of more direct relevance to this project was the suggestion that as some of these rail-freight firms used leased drivers it was possible for a driver to complete a full-shift with one firm and then commence a shift with another firm without an adequate break, thereby circumventing the strict limits of working hours without being detected. This alleged practice, if it has occurred, would represent an extremely serious breach of OHS law and warrants investigation. During the course of an earlier inquiry into safety in long haul trucking representatives of a number of large rail freight operators were interviewed who presented evidence on the considerable efforts undertaken to manage workload, hours and fatigue amongst their drivers using the most up to date knowledge provided by Professor Drew Dawson of the University of South Australia (Quinlan, 2001:264-65). This regime was integral both to their operations and maintaining their operators’ license. The Inquiry had no reason to doubt the veracity of this information. However, the use of leased-drivers by at least some rail freight firms has the potential to circumvent such controls and new protocols may be required even if investigation reveals that the practice has not been substantially abused thus far. Indeed, regulatory agency staff in at least one jurisdiction also made reference to this issue, raising a further potential problem in terms of how the rail freight company was to know that the leased driver was competent to operate that particular class of locomotive and that type of train on that particular route? Another issue that may warrant further attention is labour leasing by small business. While labour leasing is generally seen as a device used by medium to large employers in the course of interviews for this project there was some reference to labour leasing by small firms. The introduction of leased workers into small employers may pose greater risks, given that these firms are less likely to a formal OHS management system in place or the resources to undertake induction etc. Whether the use of labour leasing by small business is growing is unknown though this seems plausible given the rapid expansion of labour leasing into virtually all industries. This might provide a logical focus for targeted enforcement by 133 --
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government agencies. Of course, poor OHS management is by no means confined to small business. Both labour leasing representatives and regulators made reference to situations where leased workers who had been properly trained were requested by or sent to workplaces where OHS management was inadequate, and it was made clear the host involved was not always a small business. The weight of interviews and other evidence (such as documents and court proceedings) collected for this project indicate that while this problem warrants attention the far more typical situation is one where inadequate attention has been given to the induction/training and management of leased workers by the labour hire firm or there has been a mutual failure of responsibility on the part of both labour hire firm and the host organisation. The question of labour leasing to small business highlights the need not to see labour leasing in isolation from other aspects of work organisation and employment arrangements being addressed in this report. For example, as recognized in submissions by both WorkCover NSW and the Labor Council of NSW to the NSW Labour Hire Task Force (2001: 59-60) the risks associated with labour leasing may be exacerbated where the host organisation is undergoing change. Indeed, WorkCover saw such changes as often stimulating the use of labour hire: Companies often resort to labour hire as a short term solution to problems created by organisational changes such as: rapid downsizing, plant closures, budget cuts, shifts in operations, repeated phases of management restructuring, and other forms of corporate restructure. As a result their management systems are often in disarray, and labour hire workers step into environments of elevated OHS risk arising from adverse effects created by this process. Examples of adverse effects are: a) b) c) d)
Increased workloads and deadline pressures. Loss of corporate memory, technical expertise, and experienced personnel. Reduced ability to oversee contractor operations, including hired labour. Reduced management emphasis on activities deemed non-essential to survival, including safety and OHS & injury management training. e) Job transfers or task restructuring where insufficient attention is given to OHS risks. f) Disruption to communication channels due to management reorganization, breakdown of trust, lowered morale, distraction, and insecurity among permanent staff. Lack of upward reporting channels for OHS risks in the workplace. g) The intentional off-loading of high-risk activities to contractors (who then use labour hire sources). These factors add to the difficulties faced by labour hire workers. Basic induction training is usually all that is provided for hired workers in such situations. If their incorporation in the host firm’s internal OHS management systems is superficial and problematic, the importation of temporary hired labour can further contribute to the disorganization of risk management in the host workplace. Their use increases the number of workers working in inadequately planned work settings, and can create ambiguity in work practices and safe systems of work.
The concerns raised by regulators in relation to labour leasing are entirely consistent with available evidence from research. For example, a study (Gryst, 1999?) of the use agency workers in the South Australian power industry found: Agency workers receive little or no training from either the agency or ETSA and are required to undertake and pay for skills training themselves to keep their skill level high to remain competitive in the job market. In regard to OH&S, some training is provided, but this is on a sporadic and ad hoc basis rather than following a structured
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approach. In addition, many supervisors and workers believe that OH&S in the workplace is compromised because of the use of agency workers.
The same study indicated that agency labour was associated with a range of different forms of regulatory evasion affecting OHS and other minimum labour standards, especially but not exclusively amongst fringe operators. The agency executives who were surveyed unanimously agreed that the massive growth in the agency market had brought with it some ‘moonlighters who work out of the car boot.’ Although no names were forthcoming these agency executives cited such practices as agencies taking on people on the dole and paying them cash so rates are cheaper, so they would not have to observe awards or pay WorkCover or superannuation – let alone OH&S requirements. Another agency executive said that the labour hire firms (blue collar agencies) in particular were not allowing for long service leave as per the Act (the Long service Leave Act). It wasn’t that they were defaulting on payment to the contractors it was just that they were not allowing the funds for LSL. This same executive also confirmed that many agencies were not paying even minimum award rates of pay and that they were taking advantage of enterprise bargaining and putting in cheaper rates to employers and making the contractors take less. In addition it appears that many agencies are now shifting to a PPS system, which is forcing many agency workers to become independent contractors and nominate their own level of tax and meet their own superannuation and WorkCover – “they (the agencies) can therefore supply labour to the organisation at a cheaper price because they don’t pay the same overheads we have – they undermine WorkCover and OH&S and also shonk the system with super – its just not a level playing field.
4.3.3.1 Hold Harmless Contracts One potentially critical issue in connection with labour leasing and subcontracting are attempts to contractually reshape liabilities in relation to OHS. Perhaps the most clear and disturbing illustration of this were references to the use of hold harmless contracts. Hold harmless clauses essentially entail an agreement by one party to a contract to take complete responsibility for an issue/area and thereby indemnify the other party for any losses incurred in relation to any incidence arising in this area, such as damages claims or fines imposed arising from a failure to comply with OHS regulatory standards. In the case of labour leasing this could (and usually does) mean the labour hire firm agreeing to assume responsibility for the OHS of leased workers and the costs of any OHS breaches that arise in connection with this. Concern over the use of hold harmless contracts has been growing over several years and agency staff in several jurisdictions (most notably Victoria and South Australia) raised it during the course of interviews for this project. The concern of Victoria and South Australia has been such that both have initiated special projects in the area (with Victoria commissioning a research report from an external university-based consultant). Concern over hold harmless contracts has been mounting for several years. In January 2000 two large multinational labour hire companies, the Recruiting and Consulting Services Association and the Labor Council of New South Wales called for a government inquiry into the body-hire industry. The call followed claims that some employers were trying to hive off their OHS responsibilities by getting labour hire firms to accept ‘hold harmless’ contracts that indemnified them against the costs associated with health and safety, including fines and other 135 --
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penalties imposed by regulators. One especially disturbing suggestion from labour leasing firms (and passed on to regulators) in the course of interviews for this project was that they had found some government agencies were actually inserting hold harmless clauses into labour leasing arrangements. On the other hand, regulatory staff also expressed the view that some labour hire firms were using hold harmless contracts as ‘bait’ or a marketing device to secure work. They disputed a suggestion from the industry itself that this practice was largely confined to smaller labour leasing firms. Hold harmless contracts have become increasingly common in the USA in recent years and this helps to explain apparently expanded resort to them in Australia. They afford a means of shifting the balance of legal burdens between two parties, although this often means that the more powerful party (say a buyer of agricultural produce or health management organisation) is able to transfer costs and risks to the weaker party (say a farmer or health provider). Not surprisingly, the use of hold harmless contracts is causing increasingly vocal concern amongst associations representing those seen to lose out in the exchange. In terms of managing the OHS problems of labour hire hold harmless contracts can be seen as a ‘corporate law’ solution’ that tries to shift risk and liability to another party rather than addressing the central problem of managing safety when outsourcing. For employers the use of hold harmless clauses appears to offer a simple and effective way of avoiding the regulatory burden and difficulty of managing contractors. For labour hire firms, agreeing to these clauses could provide some with a competitive edge to get contracts by undercutting others although small firms may find they have little real choice in matter if it such a provision is required by a large client. For regulators, hold harmless contracts could be seen as detracting attention from the hierarchy of responsibility enunciated in the general duty provisions of OHS legislation and adding a further and unwanted complication into workers’ compensation and common law damages proceedings. For unions, hold harmless contracts are seen as disadvantaging the larger labour hire firms where they are more likely to have members and to encouraging problematic situations where safety standards and workers’ compensation entitlements are placed at risk. Whether hold harmless will actually achieve their objectives is problematic even in the USA where they have proved most popular. In the USA the focus of legal responsibility for OHS with the host employer or main contractor is less clearly established under OHS legislation than is the case in Australia. Even so, US regulators still focus on the principal contractor and a case highlights the limitation of hold harmless clause as a form of refuge. In November 1998 an explosion at the coking unit of a refinery in Anacortes, Washington State killed six workers after a change was made in procedures for cooling a separation drum (Chemical Safety Board, 2001:9). The company handling the coking unit Equilon (Puget Sound Refining Company) subsequently agreed to pay a settlement of US$4.4 million (including substantial penalties, donations and other payments) – the largest in the history of Washington State. An Equilon contractor (Western Plant Services Inc), four employees of whom were killed in the incident, was fined $2,800 for failing to ensure its workers didn’t have to rely entirely on Equilon’s decision to remove the drumhead without water-cooling. Equilon subsequently filed suit against Western Plant Services, which had signed a hold harmless contract with Equilon and which Equilon officials blamed for the incident. Several important lessons can be drawn from this case. First, hold harmless contracts do little to encourage an effective contractor management and may, indeed, have the opposite effect. Second, however Equilon might apportion blame this did not reflect the prosecutorial 136 --
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approach of the regulatory agency that focused on the prime contractor. Third, even if Equilon were to win its case against Western Plant Services would be pyrrhic victory given the damage suffered to the company’s reputation. Fourth, where small labour hire firms are involved limited resources may pre-empt the option of taking action under hold harmless contracts (and insurers are unlikely to continue providing cover following one or two major prosecutions). In short, hold harmless contracts are no substitute for effective management of contractor safety, whether the subcontractor is a labour hire firm or a self-employed individual. As already noted, in Australia prosecutions, like the Warman International/Drake cases, clearly establish that host employers and labour hire firms have a responsibility to safeguard the OHS of leased workers and that both cannot seek to shift responsibility to the other by contract or other mechanism. Each must do all that is reasonably practicable to discharge their duties. This is not simply a question of enforcement strategy but also the intent of the legislation as made clear in the wording of general duties/obligations and the inclusion of specific provisions in at least some Acts. As general rule, parties may outsource activities (and repeatedly so) but this does not necessarily achieve a corresponding removal of their legal obligations under OHS statutes (or indeed at common law for that matter). Hold harmless contracts cannot alter this situation by exonerating host employers. Hold harmless contracts could prove to be unenforceable if they are deemed to contravene the clear intent of OHS legislation. At the very least, enforcement could prove to be problematic. Even if the contracts are so tightly worded so as to exclude questions of the allocation of responsibility defense lawyers are likely to use the aforementioned intent of OHS legislation to mount a public interest defense. Most regulatory staff to comment on hold-harmless clauses expressed the view that they believed they were contrary to the intent of OHS legislation and they also doubted whether they could be enforced (for reasons not dissimilar to those already mentioned). Yet in the absence of a set of decisive court rulings concerns remained, allayed somewhat by a small number of court cases. In the course of this project reference was made to supreme court cases and other court decisions in a number of jurisdictions, including Western Australia and South Australia, indicating that hold harmless clauses had failed in their object of transferring legal liability from one party to another. The situation in relation to claims for damages for injury was more ambiguous (see The Workers Rehabilitation and Compensation Corporation v JR Engineering Services Pty Ltd, Western Mining Corporation (Olympic Dam Operations) and Jeffrey John Ball [1995]). The situation with regard to both OHS and workers’ compensation/common law damages claims require further investigation. Whatever their legal standing, government agencies, such as WorkCover NSW, would be correct to view these contracts as promoting confusion in relation to the OHS obligations of various parties and a potentially dangerous attempt by parties such as host firms to shift the financial burden of penalties onto the labour supplier and, as such, an attempt to defeat the strategic focus of their own enforcement programs. There are other issues of concern here. As the Equilon case shows, hold harmless contracts do not safeguard a partly like a host employer from prosecution. If anything they may make prosecution more likely by create a false sense of security amongst some employers and arguably obfuscate actual the responsibilities of various parties under OHS legislation. OHS agencies may need to take exemplary action in order to ‘clarify’ the situation. Even if there have been no actual cases as yet, the potential confusion such contracts may create warrants attention. 137 --
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4.3.4 Casual, Temporary and Itinerant/Transient Workers In general, there was less awareness of temporary work as a potential OHS issue amongst agencies from the various jurisdictions compared to other work arrangements, most notably subcontracting and labour-leasing. The term ‘awareness’ is used deliberately here. With the exception of ComCare, agencies did not argue that they considered temporary work to be a minor issue. Rather, the general response was to indicate that the agency had kept no data in this area (arguably a consequence of limitations in current workers’ compensation claims data referred to elsewhere in this report) and had given it no attention, although several indicated they were starting to examine the issue. It also needs to be noted that, to some degree, the issue of temporary workers has been picked up under programs directed at young workers (the majority of which are employed on a temporary basis), labour hire/leasing and seasonal/itinerant workers (both of which essentially involve temporary work). For its part, ComCare argued that, being limited to federal government employers and narrow industry/occupational profile, temporary employment was not very significant. At the same time, agency staff did refer to situations where the use of this labour either directly or via outsourcing had increased, notably where bodies like the Australian Taxation Office (ATO) and Australian Bureau of Statistics (ABS) used large numbers of workers on a short-term basis for specific tasks (eg providing information on the Goods and Services Tax and undertaking/collecting surveys). In the course of interviewing agency staff from the various jurisdiction repeated references were made to recent cases where workers were injured within a short time (eg a day or two) of commencing a job and where it appeared that, as the worker had been only employed on short-duration basis, too little attention had been given to proper induction and training. In several cases it was suggested that the need to pay a premium and/or administrative fee in the case of leased workers acted as an additional financial disincentive to providing adequate induction and training. In some industries temporary work can be of a particularly transient nature and entail geographic relocation of workers on a regular basis. An obvious example is horticulture, fruit picking and related harvest activities. A state regulatory officer who had spent some years working in this area observed: One of the problems in that industry is that many workers in the industry follow what they call the ‘harvest trail’. They start off up in Queensland and then follow down through NSW and onto Victoria and South Australia. And their employment is so temporary – it may be just for a few hours at one place and a couple of hours at another place. And there are different implications for OHS all the way up and down the ‘harvest trail’.
Another dimension of the problem in this industry is that it attracts foreign backpacker tourists, many of who may not hold work permits and are therefore be very reluctant to raise OHS or other employment issues with their employer let alone a government agency. On occasion, groups of illegal immigrants have also been engaged in fruit picking and they, too, represent an especially vulnerable group. Unlike the USA the use of immigrants (legal or illegal) in harvest work does not appear to involve large numbers of children - at least this aspect was never raised by regulators in interviews. As noted in Chapter 1, immigrant workers, including illegal immigrants constitute a significant component of the transient agricultural workforce in the USA. They often work in family groups (including children) that are engaged by labour contractors or "crew leaders". Some states like Minnesota have laws 138 --
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requiring, amongst other things, that all contractors to be registered with the US Labor Department, contractors show proof of their registration to workers and that workers be informed of their wages and conditions in the appropriate language. However, implementation is problematic especially where illegal immigrants are involved. The use of children in agriculture has raised serious concerns. The United States General Accounting Office report (United States GAO 1998) found these children (some as young as 6 years of age) were exposed to serious risks from exposure to pesticides that required urgent attention. Two years later report by Human Rights Watch (2000) Fingers to the Bone lambasted the failure of the US government to protect child farmworkers, referring to the exploitative practices of labour contractors and the inactivity of the Department of Labor and OSHA with regard to enforcing minimum employment standards. The report, largely based on interviews with workers, identified an array of hazards including exposure to pesticides, poor sanitation (lack of toilet and hand-washing facilities as well as drinking water) as well as risks of heat-related illnesses, musculoskeletal trauma and equipment related injuries. The report recommended a multi-agency intervention strategy by regulators and enforcement agencies to ensure minimum wage rates, hours, OHS and environmental standards. Such an approach was essential because the problems were interconnected (for example low wages obliged children to work and to do so for long hours that increased the damage of exposure to hazardous substances). A NIOSH study identified 33,000 injuries to youths aged under 20 years of age on US farms in 1998, with the highest rate of work-related injury being amongst those aged less than 10 years, followed by those aged between 12 and 13 years (Myers and Hendrick, 2001: 10). The report noted a major coverage gap with regard the Fair Labor Standards Act, 1938 (plus amendments) that set standards for child labour in agriculture since it only covered employees whose work involves production for interstate commerce. The Act also excludes youth working with their parents or their guardian (this household youth accounted for more than 70% of work injuries). The report called for action by state governments and communities to implement programs to reduce childhood injuries. Of course, a major area of child employment in Australian agriculture is on family farms, to which might be added children who are in close proximity to dangerous farm machinery etc but are not actually working (for Australian evidence see Mayhew, 2000). Incidentally, the same applies in the USA where a recent NIOSH study (Adekoya and Pratt, 2001:5) found that the annual number of fatalities amongst youths aged 20 or less on farms had declined from an average of 181 per year in 1982-89 to 103 per year in 1990-96 (males accounted for 85.2% of all fatalities but females made up 40% of those aged under five). Regulators seldom raised the OHS risks facing children on farms during interviews for this project. Nonetheless, it can be noted that FarmSafe and specific projects, such as one on the use of Ag-bikes, has addressed some of the relevant risks (for other initiatives see Work Matters No.26 October 2000). However, the US experience provides evidence that more activity may be required, especially in relation to exposure to hazardous substances and dangerous machinery. At least one jurisdiction mentioned problems in relation to temporary employment (both leased and directly hired) in parts of the aquaculture industry. In the words of one regulator some areas had a cowboy reputation where casual workers would be dropped off at the ocean pen while the boat went off to do other things and left unsupervised for some time. The abalone industry was seen as, if anything, even worse. The issue of illegal immigrants and backpackers employed in fruit picking/agriculture raises the issue of the casual/temporary employment of these groups more generally. While the 139 --
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number of illegal immigrants is not seen to be high in comparison to North America and some parts of Europe it has been growing in recent years and can pose problems in particular industries such as building and hospitality. Illegal immigrants, or foreign workers introduced under special sponsorship or short-term visas, were raised as a problematic group by a number of jurisdictions. In one admittedly extreme case, an agency referred to the case where two illegal immigrant workers (chefs) were chained in the kitchen of an Asian restaurant. From their perspective, agency staff noted that illegal immigrants could represent a ‘double whammy’ as they were unlikely to received OHS training but could claim workers’ compensation for the resulting injuries (although they conceded many made no claim – see chapter 5). The problem of illegal workers was also raised in visits to a number of Industry Reference Groups, such as Health and Community Services, Utilities and Construction (and by both employers and unions), as well as unions spoken to in the course of the project (see Chapter 6). An analogous group was workers in receipt of illegal cash-in-hand payments – by no means all of who would be illegal immigrants – such as some body-hire workers in the building industry (and areas of the black economy), including those in receipt of government social security or unemployment benefits (again, this has relevance to workers’ compensation too, see chapter 5). The challenge of protecting workers who are both temporary and transient can be especially difficult in relation to exposure to hazardous chemicals and agents because it raises a multiplicity of issues and many instances of poor practice are likely to escape detection. In relation to agriculture/harvesting for example there are questions as to the time elapse between spraying and harvesting as well as the spraying practices used. Another example that received some recognition from the Manufacturing Industry Workplace Health and Safety Committee in Queensland was in relation to Q Fever where the temporary and transient nature of abattoir workers made it difficult to implement a comprehensive vaccination regime while simultaneously avoiding the risk of ‘repeat’ vaccinations of individuals. Another especially vulnerable group of temporary workers are children and young workers employed in shops, fast food outlets and the like. Again, this issue was raised by several regulatory agencies with reference to them being asked to work extended shifts to fill a gap, holding multiple jobs or being engaged for an unpaid ‘trial’ period (especially in small retail/food outlets). While these practices are most conspicuous amongst small operators the management of even large fast food firms have had to monitor their franchisees to prevent the employment of under-age workers. As with immigrants, these workers are frequently ignorant of their rights or reluctant to make a complaint. There has been little research into the OHS risks confronting children and young workers in Australia. However, what evidence exists indicates the problem is not insubstantial. The last major coronial-inquest based study of fatal work-related injuries in Australia covering the period 1989 to 1993 identified 593 traumatic deaths. Of these, 103 or 17.4% were aged less than 20 years (and of these 16% were aged 15 years or less) with the most common occupation being labourer or related worker (cited in Mayhew, 2000a: 139). As noted by Mayhew (2000a: 139), deaths to young workers form a less significant proportion of fatalities recorded in the National Data Set (NDS) but the NDS only records work-related injuries and deaths for which a workers’ compensation claim was lodged and accepted. Research undertaken in the USA of injuries to young workers in the service sector and other areas also suggest the OHS risks they encounter are not inconsiderable, irrespective of regulations purporting to preclude them from some high-risk 140 --
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jobs (see for example Kinney, 1993; Brooks and Davis, 1996; and Castillo et al, 1999). Indeed, the problem was recognised by NIOSH (1999: 2) in a recent document that states: Tens are injured doing legal jobs as well as doing jobs that are prohibited by child labour laws. Federal child labor laws restrict the types of jobs teens can do and the hours they can work; some State laws are stricter than Federal laws…Working in illegal jobs puts youth at particular risk for injuries. According to one study, 19% of all injuries to young workers treated in emergency rooms involved working in illegal jobs; this figure is 41% according another. However, laws alone provide insufficient protection: most injuries occur when teens are working in compliance with child labor laws.
The NIOSH (1999: 2) document goes on to point out that teens working too many hours is also associated with social and academic problems - highlighting the potential for multiple externalities. The problem of child labour in the USA is broader than those areas already mentioned. Studies undertaken in North Carolina in 1998 and Massachusetts two years earlier identified a significant proportion of teenage workers using hazardous machinery like forklifts and ride-on mowers (between 13 and 31% of those surveyed), in some cases in direct contravention of federal law prohibiting the use of such machinery (such as box crushers) by persons aged less than 18 years. In July 2002 the US Labor Department released a NIOSH report urging that the federal government prohibit teenagers working in a number of fields, including construction, garbage collection, window washing and work on roofs. Pediatricians and the Child Labor Coalition have pressed the government to implement these measures as a matter of urgency (New York Times 5 August 2002). The extent of child/teenager employment in Australia is unknown and only a limited amount of research has been undertaken into the attendant risks. The Victorian government has recently undertaken a review of child employment laws. This issue certainly warrants closer examination. Another problem raised by several agencies was in connection with transient workplaces (involving in many instances equally transient workers). While such workplaces have long been common in a number of industries (such as ‘backyard’ clothing factories, orchards/fruit harvesting, building and demolition sites, mobile amusement parks/circuses) agencies pointed to number of newer forms of transient workplaces including short-term telecall centres and customer-service ‘shop-fronts’ established by government agencies to fulfill specific tasks. The agency staff noted these temporary or transient workplaces raised both OHS and workers’ compensation issues (and for some agencies, notably ComCare, this was a relatively new phenomenon). For example, unlike large permanent workplaces there was often a lack of security and risk/OHS assessment undertaken before the commencement of operations even where the employer had established policies and procedures for this purpose (but had not ensured they were implemented in relation to transient workplaces). One regulatory agency manager referred to a case where a serious problem of client-initiated occupational violence had occurred in the transient workplace of a large public sector employer as a result of this failure to implement security and risk assessment procedures. He went on to observe: But while there’s internal structures in an organisation to ensure that proper OHS prevention is considered for all normal (ie service) delivery its like when these little shop-fronts are set up for a limited period of time it’s as if all is forgotten. You have situations where its like people having brain-clots and thinking you can outsource you OHS responsibilities when you have contractors. There’s a general OHS unawareness
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of things outside of the norm to even think of how we plan ahead. You just do it. And we wear the consequences later on.
While not all workers in transient workplaces are casuals/temporary workers, the use of transient workplaces may be associated with outsourcing (or devolution/privatization/deinstitutionalisation within large public sector organisations) and it is also relevant to the subject of this report because it raises issues analogous to those discussed in relation to homebased work. In the course of this project, regulators and others interviewed repeatedly made reference to situations where the movement of work and workplaces was seen to disarticulate or fracture chains of responsibility under OHS (and workers’ compensation) legislation. The issue of transient workplaces was also raised during visits to several Industry Reference Groups. For example, a distinction was made between permanent amusement parks and mobile operators, with the latter being seen as less likely to have any sort of OHS management system in place and also to employ a higher proportion of casual and itinerant workers. In concluding this subsection it should be noted that many of the problems identified in relation to temporary workers have been found by government inquiries and reports undertaken in other countries. For example, a report undertaken for the Italian Ministry of Labour and Social Security (Synthesis, 1997) argued the particular risks they encountered (isolation, communication problems, training difficulties, disorganisation and inexperience) required a significant refashioning of regulatory intervention. Similarly, referring to evidence from a survey undertaken in Spain – where 33% of the total workforce and 70% of young workers holding temporary jobs – a report by the European Agency for Safety and Health at Work (2002a: 63-64) observed: The level of autonomy in tasks performed by temporary employees is far below that of their permanently employed colleagues…Both groups are also clearly differentiated in respect of the degree of participation in aspects related to their work (organisation and planning, teams, quality reviews, etc.). At all events, participation levels are on average 10 percentage points lower among temporary employees. Access to training also separates the two groups. Some 45% of employees with permanent contracts had been given some kind of training in the twelve months prior to the survey date, as against 33% of those with temporary contracts. The same occurs in relation to occupational hazard prevention. Only 42% of temporary employees had benefited from a medical examination last year, as compared with 62% of those with permanent contracts…Accidents, which are the most extreme indicator of poor working conditions, demonstrate a frequency rate which is much higher amongst temporary workers, in fact two to nearly three times higher, and is just the same whether they are total or serious and fatal accidents (in the latter, the rate rises to almost double among temporary workers).
4.3.5 Part-time work and Multiple Jobholding Overall, few agencies expressed any opinion on part-time work. One reason for this seems to be the difficulty of distinguishing part-time from temporary workers given that most part-time workers in Australia are also casuals. With some exceptions (see Part 2) there was little recognition of permanent part-time workers as a separate category. Another reason perhaps is the absence of much research on this group to alert agencies to any problems. As has already been noted, what evidence does exist suggests that, aside from consultation and training, 142 --
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permanent part-time workers may not experience the problems encountered by other groups like temporary workers, subcontractors and the like. In general, agency staff in the various jurisdictions made only limited reference to multiple jobholding although it was acknowledged as a potentially serious issue, particularly in some industries. For example, in Tasmania reference was made to drivers of logging trucks who tried to maintain second jobs (most often on a farm) and several other jurisdictions made reference to the attempt of farmers to boost their income by undertaking casual work. As noted above the increased use of leased labour also increases opportunities to engage in tasks for multiple employers and evade working hour limits. Another jurisdiction (South Australia) raised the issue of very young workers holding multiple jobs in the fast food/hospitality industry. For ComCare multiple jobholding was seen as a new issue. Previously federal public sector employment legislation had banned the taking of second jobs (you might be able to work parttime for the Commonwealth and full-time outside), the potential costs of doing so on a clandestine basis were high, and in some jurisdictions at least (most notably as the ACT) the options of alternate employment (and those with a low chance of being ‘discovered’) were limited. It was suggested, that historically less flexible employment structures in the Commonwealth in relation to employing workers full-time (even in comparison to the public sector in some state jurisdictions) had discouraged multiple jobholding. Under new public sector legislation it was feasible to hold down two jobs within the federal public sector and coverage under both OHS and workers’ compensation legislation remained uncomplicated. Where a worker held a job with the Commonwealth and outside the situation with regard to workers’ compensation entitlements was more complex, depending on which was the principle job (the agency noted it had yet to identify a case where the work was employed principally by the Commonwealth but was working part-time elsewhere). The agency felt the issue was starting to impact as employment practices within the federal public sector changed (for example, the growing use of part-time work in telecall centres) but remained comparatively small scale. In terms of OHS prevention, the most critical concern of agencies with multiple jobholding was the risks associated with fatigue from excessive hours of work. This was seen as part of a broader issue of long working hours arising from a range of flexible work practices including labour leasing (see the example cited earlier) and the move to enterprise bargaining. For example, an officer in one jurisdiction referred to a common practice of getting workers to extend their shifts in the hospital sector – something that was relatively simple to do under enterprise agreements since these didn’t contain the minimum call-back times that were commonly found in awards. The officer viewed these changes in shift and leave entitlements as leading to a deterioration of working conditions from an OHS perspective. As far as several other agencies were concerned, multiple jobholding was largely seen as an issue when it involved a workers’ compensation claim. Overall, evidence on the extent of and OHS/workers’ compensation implications of multiple jobholding remains sparse and the issue warrants further investigation. Agencies only appear to hear of these practices and their connection to incidents anecdotally. While this observation is also true in relation to a number of other work arrangements discussed in this report agency staff were more likely to state that their knowledge was very patchy in this area. Further, it should be noted that in a number of service industries where multiple jobholding, including 143 --
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the holding of several part-time and casual jobs, is likely to be prevalent (such as hospitality) have until recently received little attention from OHS agencies. 4.3.6 Downsizing/restructuring and job insecurity Although a widespread phenomenon, and one where there is now considerable evidence of adverse OHS effects, downsizing/organizational restructuring has largely escaped the gaze of regulatory agencies. The general duty provisions of most jurisdictions provide that the employer must make efforts to ensure to safeguard workers from the adverse OHS effects might otherwise be associated with significant changes in work processes and to consult with workers or there representatives when such changes are being considered. It would seem reasonable to presume that a substantial organizational restructuring could well entail significant changes in work processes (due to changes in staffing levels, task allocation/multiskilling, worker relocation, use of contractors, management procedures, work methods and the like). As such, these changes would seem to warrant that the employer take steps to manage the change and consult with workers. The critical safety consequences of one organizational changes are highlighted by the ESSO’s relocation of engineering personnel from Longford to Melbourne in 1992 – a factor already noted as playing a significant role in the tragic 1998 explosion (Dawson, 2002). Other incidents and subsequent prosecutions reinforce this point. Many agencies indicated that they had given little consideration to the issue of restructuring/downsizing. The one aspect that several had given attention to was the impact of such changes on work-related stress claims but even here analysis was limited. Agencies have produced detailed reports on stress-claim data, examining an array of factors including, gender, age, occupation, industry but ignoring the issue of organisational change (see WorkCover Western Australia 2000). One agency indicated restructuring was examined as part of an array of factors contributing to occupational stress. It is arguable that the lack of agency activity (either in terms of guidance material or publicized prosecutions) has helped to perpetuate a view amongst employers that, notwithstanding the incidents just cited, major changes to plant and equipment might constitute a significant change in work processes (as identified under general duty provisions of OHS legislation) but this was not the case with changes to work processes as a result of organizational restructuring. Some agencies suggested that where such changes were intermeshed with the introduction of new technologies only the former was considered in terms of OHS (and even this was by no means guaranteed). When asked whether many large organisations considered this aspect the response ranged from few to none. Even amongst those employers most likely to recognise their obligations here, such as large public sector bodies, the extent of risk assessment and worker consultation has, according to a number of agencies spoken to, often been cursory, had not addressed all the critical issues or had failed to deal with ‘after effects.’ Similarly, even where risks were identified and control measures put in place those few regulators with an intimate knowledge of restructuring indicated that there was frequently a failure to follow this up with an assessment of the effectiveness of the measures. In trying to explain this, reference was made to the short time frame that was given in relation to implementing a restructuring (including the political dictates of rapid and profound policy shifts including program closures, departmental mergers and privatisation), a fixed budget allocation for control measures (building resistance to downstream revisions) and stasis arising from anticipating there would be a further round of restructuring. Indicative of this were views of one regulatory agency manager:
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And I don’t think that’s (ie OHS) is the first thing people concentrate on. They concentrate on saving money, getting people out the door as fast as possible…
As with the shift to homecare, a number of regulators expressed the view that planning for the effects of downsizing/restructuring was often poor with unanticipated effects, such as the extra tasks, only becoming apparent after the event. It is worth noting this is a view that accords closely with the bulk of international research into downsizing/restructuring (and not simply in terms of OHS but also quality, productivity, creativity, gender-equity and other effects. See for example, Cascio et al, 1997). A limited but nonetheless important exception to the foregoing discussion of regulatory inactivity (at least in terms of enforcement) should be acknowledged. In the European Union and several Australian jurisdictions there are health and safety-based regulatory controls on the ability of employers to make changes staffing levels, work organisation and work processes in relation to a particular category of workplace, namely major hazard facilities such as nuclear power stations, chemical plants and the like. In essence the European Union, Victoria and Queensland have enacted legislation that mandates the safety case regime (in the EU this is referred to as the Seveso major industrial hazard directive, recalling the disaster at a chemical plant operated by Hoffman La Roche in the town of that name in Italy during the 1970s that inspired it). This regime requires the operators of major hazard facilities like chemical processing plants to prepare and submit to authorities an integrated plan to manage all significant risks on the site. The safety case is designed to demonstrate that major hazards have been identified and measures to address them have been put in place; that adequate levels of safety/reliability have been incorporated into the design, construction, operation and maintenance of the facility; and that sufficient information is provided to the regulatory authority in terms of changes to facilities or processes. Each safety case requires specific regulatory approval and regulatory approval must also be obtained prior to any significant change in operations that may affect the safety regime. The safety case regime has been used to veto organizational and staffing changes that are seen to entail an additional or unacceptable safety or health risk to workers or the community. For example, in the UK the HSE issued BP Grangemouth with a prohibition notice to prevent a staff cut following concerns expressed by workers these cuts would not permit the organisation to do a slow maintenance shutdown but only a crisis shutdown. In the nuclear industry issues that have triggered regulatory disapproval include proposed changed that would have seen too many people reporting to a single person. In other words, structural change can only occur with the agreement of the regulator. Victoria was the first Australian jurisdiction to mandate the safety case regime to all major hazard facilities in response to the Longford explosion (the official inquiry found that had a safety case regime been in place it was likely the hazards which led to the incident would have been identified). However, the requirement has been used in relation to mining operators in Western Australia (and invoked in at least one case where a second round of downsizing was being sought) and some operators of major hazard facilities have voluntarily implemented the safety case regime and even extended it to all there workplaces (including non major hazard facilities). In 2001 Queensland enacted the Dangerous Goods Safety Management Act dealing both with large-scale high-risk facilities (major hazard facilities) and smaller facilities (known as dangerous goods locations). In South Australia the government has recently issued a industry consultation paper on major hazard facilities (Department of Workplace Services, 2002). We will return to the issue of flexible work practices and major hazard facilities in a Part 2 of this report. 145 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
4.3.7 Small Business In the course of interviews with regulatory agency staff small business, while acknowledged as a problem, did not attract the degree of concern as some other areas such as subcontracting and labour hire. One reason for this may be that, with the exception of particular industries, the workers’ compensation claims experience of small business was seen as often better than larger firms (though, as discussed below there could be significant reporting effects here). Another reason is that, after a long period of neglect, most agencies have been active in improving their prevention activities in relation to small business for over a decade (including re-writing guidance material, funding dedicated research and improvement projects etc). Another possible reason is that many small businesses are also subcontractors and attention for this project tended to focus on this group. A final possible reason is that small business receives comparatively less inspectoral attention than medium to large employers. With the partial exception of some industries, OHS inspectorates in Australia lack the resources to visit small business worksites on even an irregular basis – and a similar problem has been identified in the USA and Europe (see Nicholson, 2001: 424). Nonetheless, small business was seen to pose problems. During the course of interviews staff from regulatory agencies identified a number of areas of small business that were seen as problematic in terms of safety. One example raised by staff of the Queensland Division of Workplace Health and Safety was in relation to the expanding recreational/tourist diving industry where media reports claimed a significant number of operators did not comply with Diving Code of Practice. This was problem was seen to arise not from the large and very professional operators but from the existence of many essentially transitory and undercapitalised operators and, to a lesser extent, the reliance of some on an equally transitory workforce (including overseas visitors). At the same time, Division’s own audit revealed a high level of compliance, something it attributed to the level of media interest in the issue following the tragic death of two US tourists in a diving mishap (being left behind on the reef). In some industries such as retailing and hospitality, small business was also identified by regulators as a problem in terms of minimum labour standards including failure to pay minimum wage rates, unpaid ‘trial’ periods of employment for young and sometimes even older workers (see also discussion of this practice with regard to labour-leasing and temporary work), excessive hours of work and other practices that may directly or indirectly impact on OHS. 4.3.8 Volunteers and Other Special Category Workers In addition to those groups of workers labeled as precarious or contingent there have always been other groups of workers whose status under OHS regulation has been ambiguous or where in practice there was little activity by regulators. Those identified included volunteers or unpaid workers such as emergency service personnel, meals on wheels workers and the like, workers undergoing group training schemes and those in ‘Work for the Dole’ schemes. During the course of the project a number of industry and agency representatives interviewed raised issues with regard to these workers. We are unaware that there has been a shift in the number of persons involved in these tasks and whether all or some would therefore fit under the rubric of changing employment relationships, although group training schemes and ‘Work for the Dole’ scheme workers do constitute more recent developments. 146 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
It is worth making reference to emergency service workers for two reasons. First, they appear to enjoy relatively clear coverage under both OHS and workers’ compensation legislation. For example, ACT regulatory officers indicated that under that territory’s OHS Act emergency workers are ‘at or near workplaces’ and are thereby covered while their workers’ compensation entitlements were covered under the emergency services component of ComCare. In Victoria volunteer firefighters are covered under the Country Fire Authority Act rather than Victorian WorkCover Authority’s compensation scheme. Second, they were cited repeatedly during interviews for this project as an area where there was detailed and effective management of risks (though more in relation to safety than health) for workers used on a temporary or intermittent basis (though a coronial inquest into the death of five Geelongbased volunteer firefighters urged that recommendations should be implemented in full consultation with the Victorian WorkCover Authority, Cover Stories No.1 February 2002). As such it was suggested that they might serve as a useful model for other groups (see Part 2). Interviews with agencies indicated that, in the main, volunteers were clearly covered by that jurisdiction’s OHS legislation. However, Tooma (2001:18-19 & 2002) has questioned the situation in NSW, referring specifically to the ‘place of work’ referred to elsewhere in this chapter. He (Tooma, 2002: 8) has argued that: In my view, unless they are in premises that have the inherent character of a workplace (such as a shop, factory or office), or they are accompanied by an employee or a contractor, they are not covered by the general duties. This arises because of the restriction on the application of the duties to “places of work”. When one considers the scope of that definition, it extends only to premises where work is performed by employees and self-employed persons, such as contractors and not volunteers. That is, volunteer firefighters, and door knock appeal volunteers, for example, may not enjoy the protection of the Act in certain circumstances. The position has improved slightly in the 2000 Act in that the obligations in relation to “plant affecting public safety”…are not limited to the place of work and therefore extend the protection to volunteers to the extent that they are affected by those provisions.
Leaving this issue aside, regulators did express concern that coverage of volunteers under OHS legislation sometimes escaped the attention of bodies using voluntary workers. For example, one regulator interviewee referred to an inquiry she had received from a church representative who believed (incorrectly) that they did not need to provide fall protection to volunteers installing christmas lights on a steep church roof. One factor in this level of ignorance was seen to be the dearth of information on managing OHS for volunteers. As an government agency representative in another jurisdiction observed: Volunteers are covered under the OHS Act but a lot of the volunteer management bodies have got no idea of that. And when we start talking to them about health and safety they go “huhh – we don’t pay people it doesn’t apply to us” and we say “well actually it does.” There’s a complete dearth of resources and information on managing health and safety for volunteers and it creates cultural issues. Instead of people behaving safely all the time, when they’re at work they worry about it but when they’re doing their volunteer stuff, which may be far more risky, (the attitude is) “she’ll be right mate.”
A number of OHS agency staff saw some childcare organisations as chronic offenders in this regard, being managed by parents with absolutely no idea of their OHS responsibilities when 147 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
bringing in fellow parents to upgrade the gardens, do repairs and the like (and seeing only their obligations in terms of the children in these centres). 4.4 Overview and Conclusion This chapter has identified a number of limitations in relation to the treatment of temporary and other groups of contingent workers by current regulatory regimes. Some of these problems arise from deficiencies in existing legislation. Another deficiency relates to problems of omission or inadequate targeting in relation to enforcement. Deficiencies in compliance can also feed back into the level of understanding of what the existing legislation requires of different parties. At the same time, the very complexity of a number of work arrangements is conducive to a more fractured and inadequate understanding of legislative requirements as well as problems of enforcement. Even ignoring confusion about their legislative duties amongst the parties it should be noted that these arrangements present regulatory agencies with additional complexities and logistical demands. For example, outsourcing/subcontracting, labour hire, homecare and some types of home-based work all essentially introduce an additional or third party (if not more in the case of multi-tiered subcontracting) into the equation, compared to the conventional two-party employment relationship. The problem of triangular employment relationships is not a new one for regulators (the first successful effort to develop international labour standards in relation to private employment agencies occurred in the 1930s. See Vosko, 1997: 49-50) but the growth of these arrangements presents a challenge to regulators on a scale hitherto not experience and one for which they arguably lack the legal armory and logistical resources to address. The evidence of this chapter is that the layers of complexity just referred can and does have significant ramifications for regulators. A number noted that within elaborate contractual arrangements efforts to use special clauses to resolve one problem without reference to its underlying causes (as in the case of a hold harmless clause or one demand obedience to certain rules by a subcontractor) could simply create another problem. Further, transient workers, transient workplaces and home-based work all present an immensely more demanding logistical task for inspectorates. In terms of legislative form, attention was drawn to some problematic provisions, especially the use of the term ‘at the employer’s place of work’ in s8 and 9 of the NSW Occupational Health and Safety Act, 2000. Other legislative problems include the weakening of existing participative mechanisms and administrative problems arising from definitional ambiguities in relation to employment status. At the same time, on the positive side it can be argued that, unlike countries like the USA that remained tied to prescriptive standards, the general duty provisions and process standards incorporated in the post-Roben legislative model adopted in Australia are better suited to address the problems posed by changing employment relationships. Most obvious here is there fact that the general duty provisions entail both vertical and horizontal chains of legal responsibility encompassing a very wide range of parties and enabling OHS agencies to adopt enforcement strategies that target the party or parties deemed most responsible for a particular breach. Thus, for example, the provisions can address vertical chains of outsourcing arrangements by identifying both over-arching responsibilities as well as the respective and shared responsibilities of each party in the chain. The general duty provisions also establish requirements not only for adequate training and supervision, properly maintained plant and equipment and (arguably less successfully) attention to hazardous substances but also the requirements in relation to maintaining a ‘safe system of work’ and addressing the OHS effects of ‘major changes in work processes’ 148 --
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provide the potential (if only partly realized) to address work organisation, including changed employment arrangements, in a systematic manner. As noted in this chapter, enforcement programs have sought to clearly establish these chains of responsibility in some areas, most notably subcontracting, although in other areas like work restructuring/downsizing there has been no systematic agency activity (and no connection made even when isolated prosecutions have highlighted the problems). Yet, perhaps the most disturbing opinion expressed again and again in the course of interviews – and a view by no means confined to unions and regulators but also expressed by employers – was that, notwithstanding the apparent clarity of the general duty provisions and the enforcement efforts of agencies, the growth of more a number of work arrangements appeared to be contributing to a growing level of ignorance in relation to these structured responsibilities. It appears the commercial separation of parties via outsourcing and labour leasing, the more transitory employer/employee relationship associated with temporary employment, and the physical remoteness (and more in some cases more ambiguous employment status) of homebased work lead to a more detached attitude on the part of some parties, like employers, in terms of the obligations under OHS law. In other words, attitudes and attention regarding the OHS mirror the distancing of the arrangement even though commercial contracts, for example, do not mean a reciprocal severing of responsibilities under OHS law. It needs to be stressed that there are important exceptions to this observation. Some industries and some employers are increasingly aware of their responsibilities. Nonetheless, a large number of persons spoken to expressed the view that changing employment relationships were associated with a decline the overall knowledge of legislative obligations. A more cynical view (expressed by a far smaller number of interviewees, usually but not exclusively union representatives) was that this shift amounted to calculated form of risk management/regulatory evasion (not just in relation to OHS but in terms of labour standards, worker’s compensation entitlements and the like) and it would continue to grow so long as regulatory agencies effectively condoned its implications. The overlap of problems of compliance/enforcement in relation to OHS, workers’ compensation and minimum labour standards was not only a concern for unions, being regularly raised by regulatory agency staff and even several employer/industry representatives. In several jurisdictions regulators discussed whether there might need for a return to more prescriptive standards in OHS and elsewhere. Although it was recognized this would be contrary to the entire thrust regulatory policy since the 1980s it is fair to say there was substantial skepticism about the effectiveness of self-regulation or internal responsibility regimes (or at least in some industries and without rigorous external vetting). This chapter has dealt with a number of different arrangements in order identify particular problems and also to indicate arrangements that are either neglected (like temporary work) or, on the other hand, have been the subject of regulatory activity over some years (like subcontracting). One particular problem identified was the lack of awareness on the part of many charities, churches and other not-for-profit organisations that volunteer workers, including those used on a casual basis like parents of children in childcare centres, were afforded protection under OHS legislation, meaning management had a series of legal obligations in this regard. In terms of the problems posed for regulatory agencies a number of common threads were identified. For example, temporary workers whether leased or directly hired and subcontractors are at risk not simply because they are less likely to receive adequate induction 149 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
and training but also because their presence attenuates information flows/communication and they are ignorant of essential sets of informal understandings about safety. One agency officer (not already cited) with considerable inspectoral experience argued that were if the files of cases he was involved were reviewed he had no doubt it would reveal that casual and labourhire workers accounted for a disproportionate number of injuries because they were not privy to the certain ‘unwritten folklore’ on safety at most workplaces that wasn’t spoken about but only learned over time: And when somebody new comes into to that (workplace) and there are various functions that have to be integrated in the workplace it is the connections between those functions, the folklore – “its how its done at (names company) or its how its done at (names another company)” and that’s where the fatalities happen, or when the serious injuries happen.
For other subcontractors and home-based workers the relocation of work to another site brings with it new OHS challenges. An important issue only touched on in passing in this chapter was the quality of information on OHS outcomes. In virtually every jurisdiction regulatory managers expressed concern about the impact of the growth in contingent work arrangements on the reporting of serious incidents under OHS legislation and the reliability of workers’ compensation claims data. This issue will be discussed in some detail in the next chapter. However, it is worth noting that data problems were raised in a number of Industry Reference Groups (such as mining and government and education). Problems of poor quality data/data leakage were seen to inhibit the resolution of debates and the development of more effective policy interventions. Data problems were not confined to OHS. For example a debate over working hours in the Mining Industry Reference Group has not been assisted by the fact there are significant disagreements/inconsistencies between the two main data sets (including that produced by the ABS). The issue of poor quality, insufficiently detailed and belatedly produced data was also raised by a number of employer and union representatives across several jurisdictions during interviews for this project.
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Chapter 5 The current regulatory framework and changing employment relationships: Workers’ Compensation and Rehabilitation 5.1 Workers’ compensation coverage, worker knowledge of entitlements and claims behaviour 5.1.1 Introduction: Setting the Scene In most industrialised countries workers’ compensation coverage does not extend to every conceivable category of worker and there are also categories of workers for whom coverage is ambiguous. One example is self-employed workers, who are largely excluded from workers’ compensation coverage in many countries. Of probably greater importance but often overlooked is evidence of significant disparities in claims behaviour amongst categories of workers who are formally covered by workers’ compensation. Research on the last issue is fragmentary but there is a body of evidence on the extent of non-claiming for compensable injury. A number of US studies (Cone et al., 1991; Stout and Bell, 1991; and Leigh et al, 1996 all cited by Committee on the Health and Safety Implications of Child Labour and others, 1998:179) found that between 30 and 60% of work-related fatalities are not incorporated in workers’ compensation records. A similar if not more pronounced pattern has been identified in relation to non-fatal injuries. Several studies suggest the problem is more pronounced for some types of injuries, for particular groups of workers or where workers fear victimisation/diminished job prospects (Biddle, 1998 and Dembe and Boden, 1999). Parker et al (1994), for example, found 67% of eligible injuries amongst adolescent workers did not result in workers’ compensation claims. A number of Australian studies draw a connection between a reduced likelihood of lodging claims and precarious employment. A study of 309 injured workers (randomly selected from 76 organisations on the basis of geographic location, industry and occupation) in Queensland revealed that 27% did not lodge workers’ compensation claims (James, 1993a:33-56). James found under-reporting was highest amongst four categories of workers namely those who were unskilled workers, occupationally mobile, self-employed or geographically isolated. (James, 1993:48-53). Later studies by James and others (James et al, 1992; James, 1993b; Mayhew and Wyatt, 1995; Mayhew and Quinlan, 1997) comparing work-related hospital admissions with workers’ compensation claims, identified a significant discrepancy with the latter substantially understating the level of serious injury, especially amongst building and road transport workers. A US study of builders reached similar conclusions, finding only 45.1% of hospital treatments resulted in workers’ compensation claims (Zwerling et al, 1996). It is more than coincidental that workers found least likely to lodge compensation claims are either directly identified as contingent workers or belong to groups (like recent immigrants and women) who are concentrated in precarious jobs. This pattern is reinforced by surveys carried out by government agencies. In 1993 the WorkCover Authority of New South Wales (hereafter referred to as WorkCover NSW) commissioned the Australian Bureau of Statistics (ABS, 1994) to survey approximately 8,800 randomly selected employed persons. The main 151 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
findings of this survey were that of the 8.3% reporting a work-related injury or illness in the previous 12 months only 47% applied for workers’ compensation. Of those not making a claim, about half (49.4%) failed to seek any treatment whatsoever, many presumably because the injury was not regarded as serious (see Table 1). However, 50.6% of non-claimants did seek treatment/support elsewhere. They utilised (see ABS, 1994:7) an overlapping mixture of the national publicly funded health care system or Medicare (43%), regular sick leave entitlements (39.6%), personal private health insurance (15.6%) and government social security benefits (7.4%).
Table 5.1: NSW injured workers who did not apply for workers’ compensation by reason why they did not apply, October 1993
Number (‘000)
Females Per cent of Number workers (‘000)
Persons Per cent of workers
0.9
*4.1
0.4
17.7
14.4
Minor injury - not 39.5 necessary
2.7
24.8
2.2
64.3
52.3
Not aware workers’ compensation
of *2.3
*0.2
*1.0
*0.1
*3.3
*2.6
Afraid of possible *5.2 retrenchment
*0.3
*4.8
*0.4
10.0
8.1
Did not think eligible
0.5
*6.3
*0.6
13.7
11.1
Concerned about *2.0 what others might think
*0.1
*1.7
*0.2
*3.6
*2.9
Other
6.9
0.5
*3.7
0.3
10.6
8.6
All
76.7
5.2
46.3
4.2
123.0
100.0
Main reason for not applying for Number workers’ (‘000) compensation Self-employed - not 13.5 eligible
7.3
Males Per cent Of Workers
* Estimate is subject to sampling variability between 25 and 50 per cent. Source: Australian Bureau of Statistics, 1994, Cat. No.6301.1, p7. In short, this study revealed a significant gap in workers’ compensation insurance cover. It also revealed that a considerable number of workers lacked a clear knowledge of their entitlements (other studies indicate similar uncertainty about claims procedures. See Stewart, 1994). Overall, 82% of employed persons stated they knew they were covered by workers’ compensation but 47% were not sure as to which system (state, federal or other specified scheme) covered them. Those aware of their coverage had derived this knowledge from employers (43.9%); brochures, posters and reading material (22.6%); unions (19.6%), discussions with friends (18.7%) and other (13.7%. See ABS, 1994:4). While no similar breakdown is available for those unclear about their entitlements, the ABS survey did indicate that uncertainty was especially pronounced amongst non-English speaking immigrant 152 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
workers, especially recently arrived groups from the Middle East and Asia (ABS, 1994:4 Table 1.3). Knowledge also varied significantly between different industries and occupations. Only 41% of those employed in forestry, fishing, agriculture and hunting reported they were aware of their workers’ compensation coverage compared to over 95% of workers in electricity, gas, water, communication and public administration. In relation to occupational groups, uncertainty was greatest amongst sales and personnel services (10% were unsure of their coverage) followed by labourers and related unskilled workers (8.5%). Uncertainty amongst retail workers would seem more than coincidental with its propensity to employ young inexperienced workers on a casual part-time basis. The ABS survey also examined why a significant proportion of injured workers did not make compensation claims. As Table 5.1 indicates, apart from minor injuries the primary reasons given by injured workers for not making a workers’ compensation claim were selfemployed/not eligible (14.4%), did not think eligible (11.1%), fear of retrenchment (8.1%), concern at what others might think (2.9%) and not aware of workers’ compensation (2.6%). Table 1 shows that these problems were more pronounced for female workers. Overall, the first ABS study indicated a significant number of injured workers fail to make workers compensation claims and industry and occupational status as well as ignorance and fear are important contributors to this. These findings are consistent with overseas evidence. For example a study of US warehouse workers by McAllister (1998) found temporary agency workers did not report job-related injuries because they feared this would adversely effect their relationship with both the host organisation and the agency. In 2000 the ABS undertook a national survey that also provided evidence on the extent of gap between the incidence of work-related injuries and workers’ compensation claims data. This report found that of 477,800 persons experiencing a work-related injury or illness in the year to September 2000 68% received some form of financial assistance. Of these 58% received workers' compensation while 21% received employer-provided sick leave and 20% received Medicare benefits. In other words, of those receiving an injury or illness at work 39.5% received workers' compensation - a figure considerably lower than that disclosed in the 1993 survey. Over half (54%) of those who did not apply for workers' compensation received no form of financial assistance. Of those not applying for workers' compensation, 127,400 (or 49%) stated the main reason for this was the minor nature of the injury, 36,800 (or 14%) state they were not covered or were unaware of workers' compensation, 22,400 (8.6%) did not think they were eligible (see Table 5.2). Of the remainder, 10,900 (4.2%) feared a claim would impact on their employment prospects, 17,300 (6.7%) felt making a claim would entail too much effort, 11,500 (4.4%) had their costs met by the employer and 33,500 (12.9%) were unsure. Given some changes in categorisation it is impossible to compare all these responses with the 1993 survey although a number of the results are clearly similar. What can be stated is that the minor nature of an injury or illness only explains about half of those failing to make claims. Over a quarter of those who did not make a claim did so because they believed they were not eligible, were unaware of workers' compensation or feared it would affect their employment prospects (Table 5.2). Females were less likely to be unaware of workers' compensation than males but more likely to believe they were ineligible (9.2%) or to fear a claim would damage their employment prospects (6%). Unlike the earlier ABS survey the 2000 survey did attempt some crude breakdowns on the basis of employment status (see Table 5.3). Not surprisingly the survey found that very few own-account self-employed workers applied for workers' compensation. More interesting perhaps was the breakdown between full-time and part-time workers. Of the 375,700 full-time 153 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
Table 5.2: Persons Who Experienced a Work-Related Injury or Illness – Main Reason for not Applying for Workers’ Compensation Received financial assistance ‘000
Did not receive any financial assistance ‘000
Total ‘000
MALES Main reason did not apply for workers’ compensation Not covered or not aware of workers’ compensation benefit Did not think eligible Minor injury only/not considered necessary Negative impact on current or future employment Inconvenient/required too much effort/paperwork Employer agreement to pay cost Other/don’t know Total Applied for or received workers’ compensation
12.2 6.6 38.8 *2.5 *3.2 5.9 11.0 80.2 147.3
16.8 7.5 43.7 *3.1 8.4 *1.6 8.8 89.7 6.6
29.0 14.1 82.4 5.6 11.5 7.5 19.8 169.9 153.9
Total
227.6
96.3
323.9
FEMALES Main reason did not apply for workers’ compensation Not covered or not aware of workers’ compensation benefit Did not think eligible Minor injury only/not considered necessary Negative impact on current or future employment Inconvenient/required too much effort/paperwork Employer agreement to pay cost Other/don’t know Total Applied for or received workers’ compensation
*3.0 *4.5 16.7 *2.3 *3.0 *4.0 5.4 38.9 58.9
*4.8 *3.8 28.3 *3.0 *2.8 ― 8.3 51.1 *5.1
7.9 8.3 45.0 5.4 5.8 *4.0 13.7 90.0 64.0
Total
97.8
56.1
154.0
PERSONS Main reason did not apply for workers’ compensation Not covered or not aware of workers’ compensation benefit Did not think eligible Minor injury only/not considered necessary Negative impact on current or future employment Inconvenient/required too much effort/paperwork Employer agreement to pay cost Other/don’t know Total Applied for or received workers’ compensation
15.2 11.1 55.5 *4.8 6.1 10.0 16.4 119.2 206.3
21.6 11.2 71.9 6.1 11.2 *1.6 17.1 140.8 11.7
36.8 22.4 127.4 10.9 17.3 11.5 33.5 259.9 217.9
Total
325.4
152.4
477.8
* ― (a)
estimate has a relative standard error of between 25% and 50% and should be used with caution nil or rounded to zero (including null cells) Refers to the most recent work-related injury or illness
Source: ABS (2001:13)
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TABLE 5.3: Persons Who Experienced a Work-Related Injury or Illness - Workers’ Compensation DID NOT RECEIVE WORKERS’ COMPESATION Applied for Did not apply workers’ for workers’ comp ‘000 comp ‘000
RECEIVED WORKERS’ COMPENSATION Applied for & Total received ‘000 workers’ comp ‘‘000
Status in employment of job where most recent work-related injury or illness occurred Employee 27.4 212.7 185.7 425.8 Employer **0.3 8.9 **0.4 9.6 Own account worker **0.8 38.3 *3.3 42.4 Full-time or part-time status of job where most recent work-related injury or illness occurred Full-time 23.2 197.8 154.6 375.7 Part-time 5.3 62.1 33.8 101.1 Varied/don’t know ― ― *1.0 *1.0 Occupation of job where most recent work-related injury or illness occurred Managers and administrators **0.5 19.5 *4.3 24.3 Professionals *3.1 35.7 17.9 56.7 Associate professionals *2.2 27.2 16.1 45.5 Tradespersons and related workers 5.8 47.5 40.4 93.7 Advanced clerical and service workers **0.6 *3.3 *1.3 5.2 Intermediate clerical, sales & service workers *3.7 38.1 20.9 62.8 Intermediate production & transport workers 6.2 30.2 38.2 74.7 Elementary clerical, sales and service workers *2.6 20.7 9.9 33.2 Labourers and relate workers *3.8 37.6 40.4 81.7 Industry of job where most recent work-related injury or illness occurred Agriculture, forestry and fishing **0.8 19.9 8.3 29.0 Mining **0.1 *4.2 *2.7 7.0 Manufacturing 5.3 40.8 45.7 91.8 Electricity, gas and water supply ― *2.4 *1.4 *3.8 Construction *2.1 29.8 17.2 49.1 Wholesale trade *0.9 10.6 7.0 18.4 Retail trade *2.4 32.1 19.6 54.1 Accommodation, cafes and restaurants *2.1 14.2 10.2 26.6 Transport and storage *2.4 13.3 16.9 32.7 Communication services *1.6 5.7 *2.3 9.7 Finance and insurance *0.8 *3.0 *3.6 7.4 Property and business services *2.0 16.0 7.2 25.3 Government administration & defence *1.2 6.5 6.7 14.4 Education *1.9 14.1 9.2 25.2 Health and community services *3.3 28.5 21.1 52.9 Cultural and recreational services **0.2 8.7 *3.2 12.1 Personal and other services *1.2 10.0 7.2 18.4 Total
28.5
259.9
189.4
477.8
** estimate has a relative standard error greater than 50% and is considered too unreliable for general use * estimate has a relative standard error of between 25% and 50% and should be used with caution ― nil or rounded to zero (including null cells) (a) Refers to the most recent work-related injury or illness Source: ABS (2001:15)
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workers injured at work 177,600 (or 47.3%) applied for workers' compensation and 154,600 (or 87% of those who applied) received workers' compensation. On the other hand, of 101,200 part-time workers injured at work only 39,100 (or 38.6%) applied for workers' compensation and of these 33,800 (86.4%) actually received it. Thus, while part-time workers were almost as likely to receive workers' compensation when they applied for it they were significantly less likely to make a workers' compensation claim than full-time workers (lodging around 23% fewer applications). In the absence of data demonstrating that part-time workers experience fewer serious injuries the reasons for this must be seen to lie within the workers' compensation system itself. This conclusion is reinforced by considerable interjurisdiction variations in claims behaviour identified by a subsequent NOHSC (2002: 14-16) analysis of the data. The study (NOHSC, 2002: 15) found South Australians (80%) were most likely to apply for workers’ compensation followed by NSW (72%), Tasmania (70%), Victoria (64%), Western Australia (63%) and Queensland (59%). There were also some significant jurisdictional differences in terms of the reasons given for not lodging a claim that may warrant closer investigation (NOHSC, 2002: 16). The findings on inter-jurisdictional differences may have some interesting ‘tie-ups’ with comments of regulators referred to later in this report (for example comments relating to the greater knowledge of workers’ compensation and willingness of South Australian workers to make claims). The original ABS report neither mentioned the finding relating to claims by part-time workers nor provided a breakdown (of Table 5.2 reasons for not applying) that might provide some clues as to why part-timers are less likely to apply for workers' compensation when suffering a work-related injury or illness. However, a subsequent analysis of this data by NOHSC (2002) explored this issue. In terms of reasons given for not applying for compensation, around half of both full-time and part-time workers stated that it was only a minor injury and there was also no difference in the proportion who nominated concerns about a negative impact on employment prospects (just under 5%). Part-time workers were more likely to indicate they did not think they were eligible (11.3% compared to 7.7% of full-time workers) but full-timers were more likely to indicate they hadn’t applied because they were not covered or were not aware of workers’ compensation (15% as compared to 12% of part-timers. NOHSC 2002: 12). The results also suggested that part-time workers were less likely to nominate that they hadn’t made a claim because the costs were met by their employer, although this finding needs to be treated with some caution as the relative standard error was between 25 and 50%. The original ABS report made no reference at all to casual workers but NOHSC (2002: 13-14) re-examined the unpublished data and found that, as with part-time workers, casual workers (defined as those lacking leave entitlements) were less likely than other workers to claim workers compensation following a work-related injury. Interestingly, when nominating reasons for not applying for compensation casual workers were more likely to mention the minor nature of the injury (58% compared to 44% of permanent workers) and less likely to express doubts about their eligibility (5% as compared to 15% of permanent workers) or ignorance of their cover (5% compared to 10.5% of permanent workers. NOHSC 2002: 14). About equal proportions of casual and permanent workers (ie 5%) didn’t apply due to concerns about the impact of this on their employment prospects. In sum, ABS survey data provides some evidence of a connection between precarious employment and workers’ compensation coverage. Quantitative and qualitative data from a series of surveys of precarious workers undertaken by the author and/or a colleague between 1995 and 2000 provide further insights. The surveys involved directly administered 156 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
questionnaires to a total of 1588 workers in three states (Queensland, New South Wales and Victoria) and covering 12 different occupations (see Table 5.4). One 1997 survey (called S1) involved 248 micro business operators (garage, café, news agency and printery owner managers). A second survey involved 304 young casual workers working for a large fast food chain (S2); a third (S3) 200 home or factory based clothing workers; a fourth (S4) 331 selfemployed small business operators in the building, cabinet making and demolition industry. The fifth survey involved 205 outsourced and non-outsourced workers in the childcare, hospitality, road transport and building industry (S5) while a sixth survey (S6) involved 300 long haul truck drivers, with roughly equal numbers of owner/drivers, small and large fleet employee drivers. Most surveys were conduced in Queensland but three large surveys (clothing, fast food workers and truck drivers) were either largely or exclusively composed of workers in two other states (NSW and Victoria). Table 5.4: Percentage of 1,588 precariously employed Australian workers with workers’ compensation coverage None
Workers’ compensation
Long haul transport 6.1 38.4 owner/drivers (n=99) small fleet (n=104) – 78.8 large fleet (n=85) – 89.4 others (n=12) 8.3 41.7 2 52 Young casuals in fast food industry (n=304) Clothing manufacture factory–based (n=100) 2 59 outworkers (n=100) 2 7 Interventions Building (n=150) 15.3 19.3 Cabinetmakers (n=150) 19.3 32.7 Demolishers (n=31) 19.3 19.3 Barriers Garage (n=73) 20.5 21.9 Café (n=70) 17.1 61.4 Newsagent (n=70) 17.1 44.3 Printing (n=35) 28.6 42.9 Subcontracting/outsourcing Childcare (n=78) employee 11 87 outsourced 51 – Hospitality (n=64) employee 9 83 outsourced 43 27 Transport (n=32) employee 12 88 outsourced 27 27 Building (n=31) employee – 92 outsourced 11 6 Source: Taken from Mayhew and Quinlan (2001:5)
Insurance policy
Not sure
Other
No response
42.4 4.8 12.9 8.3 –
9.1 15.4 8.2 33.3 39.1
6.1 2.9 4.7 8.3 8.2
– – – – –
2 2
26 3
– –
1 4
70 62.7 58.1
0.7 2 –
1.3 2.7 3.2
– – –
57.5 8.6 18.6 22.9
– 8.6 7.1 5.7
– – 5.7 –
– 4.3 8.6 –
3 49
– –
– –
– –
– 30
– –
9 –
– –
– 47
– –
– –
– –
8 78
– –
– 6
– –
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Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
In three surveys we included control groups of non-contingent workers (although the sample size in one makes meaningful comparisons difficult). In each survey we asked the question “Are you covered by workers’ compensation or a personal injury insurance policy? Respondents were then given a series of boxes to choose from. Some ticked more than one box so line totals in Table 5.2 sometimes exceed 100%. Table 5.4 reveals significant differences between the groups in terms of their knowledge of workers’ compensation cover. Overall, around 50% of the workers surveyed believed they were covered by workers’ compensation while 20% felt they had no formal entitlements to workers’ compensation or other form of entitlement (including private insurance cover). While significant in their own right, these generalisations mask significant variations between different occupational groups. Of course it is important to objectively measure the accuracy of this knowledge against formal entitlements. One possible explanation is that these variations reflect differences in formal entitlements. While some groups surveyed might all be covered by workers compensation for others coverage depends on formal employment status and jurisdiction-specific definitions of what constitutes a worker. Unfortunately, making comparisons between reported knowledge and actual entitlements is not always possible due to the ambiguous employment status optional cover provisions in relations in relation to some groups. In some Australian jurisdictions compulsory cover applies to specific groups of selfemployed workers while other self-employed workers or owner/managers have the option of voluntary cover, private accident insurance or nothing. The small business owner/managers we surveyed (S1 & S4) relied on a mixture of workers’ compensation and private insurance but around 20% had no cover whatsoever (probably an under-estimate once some of the unsure responses are added in). In several jurisdictions the situation is further complicated by recent changes in formal entitlements. In Queensland, for instance, compulsory cover of some groups of self-employed workers and a voluntary option for others to take out workers’ compensation insurance was curtailed in 1997 and then further revisions made subsequently. For groups where we can make definitive remarks our evidence casts doubt on an explanation linking knowledge to variations in formal entitlements. Both factory and home-based clothing workers are formally entitled to workers’ compensation. However, only 7% of home-based workers were aware of this, 13% were unsure and more than 70% believed they were excluded from cover. Indeed, clothing outworkers had the poorest knowledge of their worker’s compensation entitlements of all occupational groups we surveyed. Amongst factory-based clothing workers, 59% correctly believed they were covered, 26% were unsure and 12% believed they were not covered (the low figures even for this group probably reflect the significant proportion of non-English speaking background immigrants employed in this industry). Although all fast food workers were covered by workers’ compensation only 52% were clearly aware of this. Most other fast food respondents fell into the not-sure category (39%) rather than believing they had other forms of cover (8.2%) or had no cover whatsoever (2%). Since over 95% of employees in this firm were young casual part-time workers (symptomatic of the industry) it was impossible to compare their knowledge against a non-contingent group of fast food workers. However, overall their knowledge of workers’ compensation entitlements compared poorly to other groups we surveyed, including workers where the coverage issue was far more complicated. At the same time this particular set of workers had good knowledge of OHS in terms of risk identification and preventative legislation, in large measure due to a pervasive OHS management system (with rigorous training and supervision) in place in the firm (Mayhew and Quinlan, 2002). It appears the company did not take the 158 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
same effort to inform them of their workers’ compensation entitlements and, not being unionized, they were denied another potential source of information. The influence of factors other than formal coverage on knowledge is reinforced by the truckdriver survey. While all employed drivers were covered by workers’ compensation, and overall awareness was high compared to other occupations we have surveyed, there was a significant difference in the level of awareness amongst those drivers working for large transport companies (89.4%) than those working for small fleets (78.8%). Almost twice as many employee small fleet drivers than large fleet drivers were unsure of their coverage. It is likely a firm size affect with regard to knowledge of worker’s compensation applies in other industries. It is also worth noting that with regard to owner/drivers (where workers’ compensation coverage is more problematic) 6.1% reported no insurance cover at all. In other occupations surveyed the figure is far higher. While the absence of any cover may be seen as a problem for the worker concerned it is likely to have ramifications for the community, especially when that worker is engaged in a dangerous industry and has dependents. Comparisons between contingent and non-contingent workers were possible for our 1995 outsourcing study of employees and self-employed workers in childcare, hospitality, road transport and building (S5). Given the small cell sizes (especially for transport and building) the findings should only be treated as suggestive but responses broadly conform to our other studies and the ABS (1994) study. Between 83% and 92% of employee respondents were aware they were covered by workers’ compensation, a finding not dissimilar to the ABS study. Interestingly, none of the workers surveyed reported being uncertain as to their coverage. With regard to self-employed workers it is again, difficult to comment on those reporting coverage under workers’ compensation (due to the legal complexities here) except to say that only amongst two groups (hospitality and transport workers) did a significant minority of workers believe they had cover. This point is reinforced by the large number, ranging from 30% of outsourced hospitality workers up to 78% of building workers (all plumbers), who reported they were covered by private insurance. Equally important was the number of outsourced workers who reported having no cover whatsoever, especially amongst hospitality (43%) and childcare (51%) workers (Table 5.4). Overall, our evidence indicates knowledge of workers’ compensation entitlements is problematic in some industries where contingent workers are concentrated and that, where we are able to make comparisons, contingents workers are significantly more likely to report having no injury insurance cover whatsoever. These observations are amplified when we turn to the qualitative data of specific comments made by workers interviewed. For example, in the fast food industry survey (S2) we found many young casual workers incorrectly believed that their entitlement to workers’ compensation depended on the degree of the injury sustained or whether they or the company were at fault. Typical responses were: ‘Depends if fault of self, then no. But if work fault then work comp. would pay’ (young casual worker no.A14); ‘If it was [named store] fault then yes. But if I was being stupid, then probably not’ (no.A35);‘Depends on severity of injury. Only if burns were significantly high’ (no.A83). ‘If you have to go to hospital’ (no. B195); and ‘If the fault is not yours’ (no. B197).
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Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
Other young casuals believed compensation cover depended on whether they were full-time employees or had been given a warning: ‘Only if you are full-time; not sure for casuals’ (no.A28); and ‘Depends on if I have been warned about it or not. If I have been told & I get hurt then it is my fault. But if they haven’t told me then I get it’ (no. B180).
Likewise, responses from both factory and home-based clothing workers confirmed a mixture of ignorance and fear, exacerbated by immigrant status: ‘Don’t claim; like job and no claim … never complain as no understand. What can do? Too late for me now at my age’ (factory-based NESB worker with OOS; no.F188; age group 40-49).; and ‘I wish that I could have the entitlement for the workers’ compensation; no payment for me’ (outworker no.O11).
As might be expected, injured self-employed workers and owner/managers placed most reliance on a mixture of their own resources, private insurance and Medicare (see S1 & S4). Amongst micro business owner/managers (S1) the following responses were typical. ‘I don’t think we have a problem with health and safety here … I don’t know what I’d do if I couldn’t work … no insurance or workers’ compensation’ (garage owner/manager no.25); and ‘When I was burnt by steam went to doctor that bulk billed so I didn’t have to pay … regularly take naprosyn tablets for back problems … for years … visit the doctor every six months to renew the prescription’ (café and restaurant owner/manager no. 129).
Interviewees repeatedly complained economic pressures forced them to avoid any form of insurance cover and to continue working when injured: ‘When you are starting a new business you have to be as economical as you can – things like insurance premiums are not a priority for me at the moment’ (garage owner/manager no. 63); ‘… taking painkillers continually for back … sore feet are from standing all day … part of the job’ (café owner/manager no. 123); ‘Cannot afford to get sick as permanently at work trying to break even – also who would make money then.’ (café owner/manager no. 156).
Responses in the Interventions Study (S4) of builders, cabinetmakers and demolishers revealed similar dependence on self-help/family support, private insurance and Medicare:. ‘Short term, me – up to a few weeks. Long term – personal insurance (income protection)’ (interventions builder no. B11); ‘Private insurance after first 2 weeks’ (interventions builder no. B151); ‘Depends. Probably Medicare. Have to be off a long time for insurance’ (interventions builder no. B140); ‘If I was off work for a long time – insurance and income protection but otherwise myself’ (interventions cabinetmaker no. C11); ‘Get what I can on Medicare and then myself until six weeks when private insurance takes over’ (interventions cabinetmaker no.C111); and ‘Medicare then myself (money I put aside)’ (interventions demolisher no.D1).
Unlike micro business owners (S1), some of the Interventions respondents (S4) believed they were covered by workers’ compensation. However, like the micro business owners’, economic pressures still made them reluctant to make claims and to continue working except for the most severe injuries: 160 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
‘Would depend on the type of injury. If serious – claim through workers. comp. With self-employed people if you have to take time off it has to be pretty bad’ (interventions builder no.B135); ‘If the injury required time off work (more than one month) then workers’ compensation, else family’ (interventions cabinetmaker no. C30); ‘Medicare would pay for the medication but I would pay for the time off myself’ (interventions cabinetmaker no.C88); and ‘Don’t use the workers’ comp. for minor things’ (interventions demolisher no. D28).
In sum, these quantitative and qualitative findings indicate that many workers in precarious jobs are ignorant of their workers’ compensation entitlements, frequently reluctant to make claims and rely on other sources of support and treatment, most notably family members, the public health and social security system. If the findings are validated by further research it seems reasonable to suggest that as the precariously employed component of the workforce increases these problems will compound. These problems are not confined to Australia. With several notable exceptions, there is little evidence that workers’ compensation or other relevant government agencies have been giving attention to how improve knowledge of entitlements amongst especially vulnerable groups of workers. There was some difference of opinion between and within agencies about the extent of this problem. Representatives of agencies in several jurisdictions suggested their data did not indicate industries with an abnormally high level of systematic under-claiming (though gaps in data referred to earlier need to be taken into account here). Yet a agency representative from one of the same jurisdictions disputed this interpretation, referring to industries such as hospitality and retailing where they believed, admittedly on the basis of anecdotal evidence, that casual workers’ ignorance of their workers’ compensation entitlements was tacitly and not so tacitly encouraged by employers or managers. Reinforcing the last point, representatives from another jurisdiction stated they were aware of instances where employers withheld information from workers or discouraged them from making a claim. This is, of course, an offence under virtually every workers’ compensation statute in Australia. However, the impression gained from interviews was that these provisions have been little used and no effort has been made to assess the extent of these practices even within industries such as trucking where allegations of such practices have been repeatedly and publicly made (Quinlan, 2001). In other agencies there was a firm view that major gaps between entitlements and claims behaviour existed and needed to be addressed (see Part 2 of this report). For example, the Australian Capital Territory representatives referred to the presumption amongst subcontractors, especially in the construction industry, that if they were a independent contractor for the purpose of tax and superannuation then the same would apply to workers’ compensation (whereas in fact the coverage definitions in terms particular categories of workers are specific to each according to the relevant legislation and court rulings in that sphere). There was some debate as to the effect of increased personal injury litigation (and media advertising by law firms) in recent years on awareness levels, although again it was suggested the impact of this might fall mainly on permanent workers. Several agency representatives suggested there were difficulties getting workers interested in their workers’ compensation entitlements unless they were aware of injuries that had already occurred in the workplace. Accepting this argument, the task would be even more difficult in the case of temporary workers who would be less likely to have such knowledge of particular workplace. 161 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
Overall, most agencies were aware of serious gaps in knowledge of or access to entitlements amongst particular categories of contingent workers in specific industries. This knowledge was derived from disputed claims, incidents of denied access and a limited amount of targeted inspections, limiting their ability to make a more overarching assessment of the state of knowledge across different employment categories, industries and occupations (except where labour hire was concerned). The known areas were almost always ones (such as building) already marked by a high number of claims. Virtually all conceded that in other groups of workers, like young casual workers in the fast food industry knowledge was likely to be very poor (indeed there is evidence to this effect. Mayhew and Quinlan, 2002) but only a few, notably NSW and Queensland, had begun to address this issue (in terms of OHS knowledge, workers’ compensation knowledge or both). Examining existing documentation confirmed this impression, seldom if ever is employment status mentioned or taken into account in advisory documents (except in terms of exclusion). This is even the case with industry specific material. For example, while retailing is a major employer of casual/temporary workers the otherwise valuable Return to Work Kit for both employers and workers produced by the Retail Industry Reference Group (2001a&b) fails to mention temporary workers or to indicate that these procedures should apply to them. 5.2 Changing Employment Arrangements and the Administration of Workers’ Compensation and Rehabilitation Notwithstanding important institutional and regulatory differences, there is mounting if still fragmentary evidence the growth of precarious employment is affecting the capacity of workers’ compensation regimes to achieve a number of central policy objectives. This includes providing medical treatment and income protection to injured workers and ensuring employers meet the costs of work-related illness in their workplaces. It also has implications for efficient and equitable administrative processes, including determining eligibility and entitlements, the ability of workers to lodge claims and the provision of rehabilitation. Finally, growing gaps in workers’ compensation affect the value of claims data as driver in prevention and cost-containment policies. This section will examine each of the issues in turn. 5.2.1 Coverage and Under-utilizing Claims Behaviour There is growing international evidence that the growth of precarious employment is adversely affecting proportion of workers formally entitled to workers’ compensation, the number who can utilise this entitlement, the treatment accorded to some categories of claimants (including issues of equity and access to rehabilitation). In Australia, as in other countries with which we are familiar, compensation coverage is forged on traditional legal definitions of paid employment with a limited extension for other specified categories of workers being achieved through special clauses or deeming provisions. The growth of precarious employment is rendering conventional boundaries, especially the common law definition of employment (in countries with common law systems), increasingly problematic. Most notable is the proliferation of self-employed workers and contractors, as well as workers whose status as contractors or employees is ambiguous such as many homeworkers and teleworkers. The question is not simply one of coverage but also identifying the responsible employer and the latter issue extends to other groups of contingent workers where employee status may not be in question, notably leased workers/agency labour. In most countries, temporary, part-time employees and those working in small business are formally entitled to workers’ compensation. However, in a number of US (such as Pennsylvania and Connecticut) 162 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
and other jurisdictions there are exclusions affecting casual workers, agricultural employment, domestic service, homeworkers and those employed in micro small business (Schmulowitz, 1995:52; Florida DLES, 1997, WorkCover NSW 1997; and Goldsmith, 1998:389-90). In Australia, the primary formal exclusions from cover are self-employed workers, including many subcontractors, micro-small businesses and home-based workers. Some jurisdictions exclude virtually all self-employed workers but most deem a very selected number of categories of self-employed workers as covered for the purpose of the Act and/or permit selfemployed workers to take out a voluntary workers’ compensation policy that is similar to those covering employees. In Western Australia for example, subcontractors engaged and paid to provide personal manual labour or services for the purpose of a trade or business may be defined as workers. The guide (WorkCover Western Australia, no date, 8-9) to this legislation also states: If you engage a contractor to do work which is for the purpose of your trade or business, then both you, as the principal, and the contractor must cover any workers the contractor employers. In other words, you must each have a workers’ compensation policy to cover the contractor’s workers.
Workers’ compensation authority staff interviewed for this project were generally aware of a growth in work arrangements that fell outside their existing coverage provisions or where cover was problematic. This included some contractual arrangements that were very deliberate attempts to evade workers’ compensation and other regulatory cover (see several examples cited in chapter 3) drawn up with legal advice (to circumvent the definition of worker and anti-opting out provisions in the legislation). A number of industries were repeatedly mentioned as especially problematic in this regard (notably trucking, taxi driving, fishing and building/construction) although several interviews suggested these practices appeared to be spreading. A number of agencies referred to the lengths some parties would go to avoid deeming provisions. Referring to housing construction one agency officer observed: The light construction industry is a classic example, the housing industry - I mean it’s a beauty. You get to the situation where you have dollar values and all this sort of stuff and you have people taking $20 worth of nails to work on a house just so they can be deemed as self-employed.
We will return to the subject of deeming provisions in the later chapter (11) on regulatory remedies and solutions. Beyond the question of formal coverage there is also the issue of under-utilisation by workers who are covered. Australian and US evidence presented in the last section suggested this is a substantial problem, and in the case of Australia a fairly strong connection can be drawn between precarious employment and under-utilisation. During the course of interviews conducted for this project the officers of workers’ compensation agencies were asked their views on contingent workers and under-utilization. There was some divergence of opinion, though a majority believed it was a serious issue. For example, a senior policy officer for one agency indicated she had no doubt there was a substantial gap due to non-claiming and this problem was not confined to part-time workers but a large number of full-time workers who 163 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
felt that lodging a claim would jeopardize their immediate or future career/employment prospects. She indicated that this apprehension was reinforced by the common inclusion of a question in job application forms asking the applicant whether they had a current or past claim for workers’ compensation. Omissions in coverage and under-utilisation represent a significant issue in terms of the efficacy of workers’ compensation fulfilling its role as a safety net for those injured at work. Over the past eight years or so the issue of coverage has been addressed in reviews of workers’ compensation in Australia, Canada, the USA and Germany if not elsewhere. A special briefing paper prepared for British Columbia Royal Commission into Workers’ Compensation by the province’s Workers’ Compensation Board (WCB of BC, 1997) placed particular emphasis on the problems posed by the growth in ‘non-traditional’ work arrangements including independent contractors. Even so, the outcome of these reviews has not always been to extend coverage to contingent workers and the equally important problems of utilisation and equity have received far less attention. In its review of workers’ compensation in Australia, the Industry Commission (1994:90-4) found that coverage of groups of contingent workers was partial, ambiguous and inconsistent across different jurisdictions (in Australia, like the USA and Canada workers’ compensation is principally a state/provincial matter). The report expressed concern at cost shifting to the public health and social security system entailed in existing omissions and observed: Under present arrangements, the trend towards ‘contracting out’ of specialised tasks to small business will result in an increasing proportion of the workforce being excluded from compulsory workers’ compensation coverage’ (Industry Commission, 1994:93).
To remedy this, the Commission (1994:93-4) argued that subcontractors should be covered by compulsory workers’ compensation insurance, with the premium paid by the firm letting out the contract. These recommendations were never implemented. In a 1997 report to Labour Ministers’ Council the Heads of Workers’ Compensation Authorities (1997) examined the issue of uniform coverage. Considering the options of a narrow restricting entitlements to PAYE taxpayers, a broader coverage to include unincorporated contractors and self-employed persons or an interim position where deeming provisions were used to expand the common law concept of employment to certain classes of workers the Report noted all three approaches had difficulties. It (Heads of Workers’ Compensation Authorities 1997: 10) argued that the main limitation with the expanded coverage approach was that it would encourage ‘game playing’ avoidance strategies on the part of the some parties. Yet, as this project found, attempts to manipulate coverage provisions already appear to present a serious issue (ie under a narrower definition). The Report urged a watching brief be maintained so that a widening or narrowing of coverage could be recommended as ‘knowledge of improved practices emerges’ (Heads of Workers’ Compensation Authorities 1997: 10). In other words it recommended a continuation of the current common law plus some deeming adjunct categories of workers that was used by most jurisdictions. The issues raised in the Industry Commission Report were left largely un-addressed. Subsequently, several state jurisdictions such as Tasmania (Tasmanian Joint Select Committee, 1998:36-7) have considered extending otherwise narrow common law coverage via deeming provisions dealing with subcontractors. It should be noted that provisions deeming some groups of self-employed subcontractors or those working under a contract for services as workers for the purposes of the relevant workers’ compensation statute are by no 164 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
means a recent innovation. Deeming provisions have existed for a number of years in the legislation of a number of jurisdictions. While not without effect, the overall impact of these provisions has been unclear, with several regulatory agency staff referring to the ineffectiveness of provisions covering particular groups (such as owner/drivers in trucking). The workers’ compensation representative of one jurisdiction indicated his agency had been the subject of a letter writing ‘campaign’ from self-employed subcontractors requesting to purchase a policy (an option not available to them in this jurisdiction) which he believed was the result of pressures from the principal contractors in high risk/high cost industries like construction to avoid their own liability under deeming provisions. The agency’s response has been to inform these workers that they are deemed covered. Government agencies in Australia and elsewhere have produced guidance notes clarifying the compensation entitlements of specific categories of contingent workers like clothing outworkers (WorkCover NSW, 1996). Unions have also pressed for a broader definition of ‘worker’ (Labor Council of NSW, 1997:9). Nonetheless, coverage of groups like many children employed in a myriad of tasks such as delivering newspapers remains ambiguous at best (ILO, 1998a). Further, in some jurisdictions like Queensland and the Northern Territory, cover was actually curtailed at one point on the grounds of administrative simplicity/cost containment (Tasmanian Joint Select Committee, 1998:36-7). Even though the policy was partially reversed in Queensland such policy shifts only add to the level of confusion. The overall decline in coverage due to the growth of contingent work arrangements is unknown. For one agency (ComCare) the use of outsourcing or labour leasing by employers covers leads to a relatively unambiguous loss of coverage since the outsourced/leased workers become (if still eligible for workers’ compensation) the responsibility of another (ie state or territory) jurisdiction. With regard to other agencies outsourcing or labour leasing can entail a shift of the workers to coverage by another employer within that jurisdiction, or to a category of work (such as self-employment) where coverage that may be excluded altogether or only voluntary. The situation with regard to the growth of temporary work, itinerant work and the like is more ambiguous because it is not a question of formal entitlements but rather the effects on willingness to make claims. While nearly all agencies conceded that this could well be a significant issue, with some notable exceptions (such as NSW) most had made no attempt to assess the extent of these problems by targeted audits or commissioned survey research. Again, there may be inter-jurisdictional differences here, particularly in relation to ComCare, where it might be suggested public servants, as group, would be more conversant with their rights and bureaucratic processes than the workforce as a whole (though ComCare staff believed these differences may be declining as a consequence of changed employment practices within the federal government). One agency to try to get at least a crude picture of changing patterns of employment, work arrangements and workers’ compensation coverage at industry level was Western Australia (WorkSafe Western Australia, 2001a). Examining data for the period 1990/91 to 2000, a number industry sectors were identified where workers’ compensation coverage was poor. In some, such as agriculture, forestry and fisheries (with about 50% workforce coverage), total employment had been stagnant or declining, while others (like transport and storage) experienced a moderate growth. In a number of other industry categories where compensation coverage was historically high (such as government administration, manufacturing, mining and utilities) overall employment altered little or was declining. On the other hand, the analysis identified a number of industries with low workers’ compensation coverage (notably personal services; construction where a third of the workforce were self-employed 165 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
subcontractors; and finance, insurance, property and business services – with about 20% independent contractors) where there had been a significant growth in the total workforce over the decade (ie well over 30%). With regard to three other industries where the workforce grown strongly over the past decade (notably community services, health and education; cultural and recreation services; and accommodation, cafes and restaurants) the analysis makes no general comment on workers’ compensation coverage but does note a significant growth in small business operators in the first two of these industry groups and a substantial level of part-time employment (ie well over 40%) in the last two industry groups. While the WorkSafe Western Australia analysis must be treated as probative rather than definitive it does suggest that the industries strongest workforce growth over the past decade are ones where workers’ compensation coverage was already problematic or is becoming more so over time. On the other hand, in industries with historically high levels of workers’ compensation coverage (government administration, manufacturing and mining) the total workforce was large stagnant or experienced a very modest increase. So, even ignoring the effects of changing work arrangements on coverage in the latter, it would appear that the combination of industry workforce trends and changing work arrangements will cause a significant erosion of workers’ compensation coverage. Further, while the Western Australian workforce and economy has some unique characteristics, a number of the more significant shifts identified would apply to most other Australian jurisdictions. During interviews reference was made to an attempt at national level to measure changes in coverage by matching the number of employers with registered workers’ compensation policies and the number of workers they employ with movements in the overall employed workforce had failed because of the rubbery nature of the figures. Even if this were not the case, the data would measure formal coverage not changes to claims behaviour that might be at least as significant. What can be said is that, drawing on all the available evidence (from surveys, reports etc) changing work arrangements appear to be having a significant effect on both formal coverage and claims behaviour. This is also the impression of most regulatory agency staff spoken to in the course of this project. 5.2.2 The link between coverage, claims data and prevention If, as it appears, there has been a significant decline in effective workers’ compensation coverage this could have flow on effects for prevention. In number of jurisdictions a closer integration between OHS prevention and workers’ compensation agencies has included the latter providing a funding stream to the former. While this has a number of advantages in terms of maintaining a secure flow of funds (which can be adjusted to meet changing costs and other requirements) there is also a potential conflict where the workers’ compensation agency may naturally wish to prioritise those areas that result in numerous or expensive claims at the expense of other areas which may also entail significant costs but do not result in as many workers’ compensation claims (occupational disease is an obvious example). To the extent that compensation coverage declines due to changing employment relationships this could affect the perceived need to fund prevention activities. Agency staff in a number of jurisdictions acknowledged a dilemma about directing scarce preventative resources (including activities of workers’ compensation agencies) to areas that might not (at present) be a significant source of workers’ compensation claim though most stressed they didn’t rely entirely on workers’ compensation data. Staff in one agency referred to recent discussions at its peak board level questioning the need to give priority to OHS 166 --
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activities in farming, given that very few workers in this industry were employees. They gave examples of other areas (like the safety of students and staff in education) where similar deliberations had occurred within the agency (and as can be seen from the education example by no means all these related to contingent work arrangements). An agency representative from another jurisdiction agreed there was a focus on claims for directing regulatory attention. He referred to his own investigation of claims data for textiles, clothing and footwear, which didn’t show up as a high risk because clothing outworkers virtually never made claims even though he believed legal impediments would not prevent the agency processing such claims. Even where this dilemma is not acknowledged there is still a question as to what alternative sources are being used (and the extent of reliance on them when compared to claims data). As noted elsewhere in this report, a number if not all government OHS agencies appear to use a combination of sources, including the results of random/normal inspections and specific audits to assist in targeting enforcement activity though there is a question as to how industry sub-sectors etc are selected for inspections/audits (ie selection may be partly based on workers’ compensation claims experience). A number of jurisdictions, such as Queensland, also require employers to report all serious OHS incidents under OHS legislation but independent investigation (see Mayhew and Wyatt, 1995) of these schemes (matching reports with hospital admissions and other data sets) indicates a serious level of non-reporting and that non-reporting levels varied significantly in relation to types/causes of injury (for example, work organisation related incidents were poorly reported) and between different industries (like manufacturing and retail/wholesale). The suggestion that, notwithstanding the acknowledged gaps in workers’ compensation data, the National Data Set (NDS) compiled by NOHSC (based for reasons of nationally consistency on a subset of workers’ compensation data) is representative of the broad pattern of occupational injuries was greeted with skepticism by staff in virtually every jurisdiction visited. A number of major flaws in this data set that are directly relevant to this project were identified. For example, a manager in one jurisdiction stated: One of the areas that interests me and I’ve done a bit of work on is the incompatibility of OHS information….Our data is all coded on the basis of the National Data Set. We know that a very high number of injuries, especially in small business, end up going through accident emergency sections of hospital. They use the National Data Set. We know there’s an incompatibility of information…I don’t know what the ultimate solution is but I know there is a need for compatibility of data. We know that we’re missing out on a whole range of injuries, you mentioned the chemical exposures, we’re not getting half of the eye injuries for instance in the statistics that are being created. We’re not getting virtually 90% of the contact dermatitis exposures are not being reported because they’re all going through GPs. There’s sort of a whole underreporting of types of injury.
A number of jurisdictions have introduced several initiatives to start filling these gaps (see Part 2 of this report) but as yet most these efforts are still in their early stages and a long way short of providing a complete solution. The extent to which limitations in workers’ compensation have been accommodated into policy (or putting it another way the residual or hidden influence of workers’ compensation data) in the prioritizing of prevention activity requires further investigation. Quite apart from these general effects, changes to work arrangements also raise issues for government agencies in terms of their targeting of the claims experience of particular companies. For example, when a company engages in outsourcing or uses leased or home167 --
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based labour it may transfer workers’ compensation claim liability to another party (and as indicated above this effect may still apply in practice even where deeming provisions would suggest legal responsibility has not been shifted). Where subcontractors or labour leasing firms operate under a different industry premium classification or WIC codes, and where use of these types of labour is significant, it can alter industry claims performance without reference to the actual incidence of injury or disease. The potential for blurring of industry performance was raised by staff in a number of jurisdictions. As one officer observed: With a lot of outsourcing, as you know, people are moving to the contract area so sometimes the risks are changing in the original industry from which they are drawn and now they’re going into a far more nebulous type of industry (labour hire).
Another officer in the same jurisdiction stated: It creates an effect, almost a false trend because what I am getting fed back to me is that we’re showing decreases in our manufacturing industry but its not it’s the quite permanent use of labour hire.
Similarly, in its submission to the Labour Hire Task Force (2001: 58) WorkCover NSW noted that there had been an increase in compensation claims in its Business Services – Other employment category that includes labour hire but cautioned: The workers’ compensation statistics could understate the problems of casualised workers. This is because labour hire workers may not make workers’ compensation claims as they are often unaware of their rights. Their complicated and volatile work histories will also make it more difficult to identify the health impacts of long-onset injuries, such as those arising from exposure to hazardous substances. Where contracts are generally of short duration and there are multiple employers, it is difficult to identify who is liable for delayed onset injuries and diseases.
As far as we are aware there has been no attempt to systematically estimate the extent of these effects in Australia. The WorkCover Corporation of South Australia has collected evidence on the workers’ compensation claims experience of the labour hire industry (I want to thank Stan Coulter for providing this data). More recently detailed analysis of compensation claims in labour hire has been undertaken for WorkSafe Victoria (see Underhill, 2002). The South Australian Labour Hire Task Force Report (WorkCover Corporation of South Australia 2000) noted a substantial effect in relation to labour leasing alone. The report noted that total remuneration of the major labour hire category (SAWIC 849101) grew from $45 million in 1990/91 to $185 million in 1999/2000 while the number of claims grew from 409 in 1990/91 to 1493 in 1998/99. As the report noted, this was not a complete figure because labour hire is also found under other WIC categories. The Labour Hire Task Force (WorkCover Corporation of South Australia 2000: 2) observed: Changing employment relations are impacting upon workers’ compensation and OHS which has seen a transfer between exempt employers and non-exempt employers. This is evidenced in the respective proportions of scheme remuneration in 1993 of 40% and 60% moving to 35% and 65% (refer Attachment B) which may correspond to the increased use of the ‘labour hire industry’ by exempt employers.
The Task Force Report (WorkCover Corporation of South Australia 2000: 6) went on to note that: 168 --
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The use of labour hire by exempt employers has seen a transfer of hire (higher?) risk activities and corresponding costs to non-exempt employers with the liability for such claims being met from the Compensation Fund.
In other words, self-insured employers were able to transfer high-risk activities to fundinsured labour hire firms creating a greater burden on the latter while improving their own cost-profile and presumably that of their base industry as well. It could be argued that the high level of self-insured employers in South Australia rendered this jurisdiction especially vulnerable to these shifts – and this has policy implications – but the cost shifting applies to all jurisdictions and thereby affects the value of claims data for driving prevention strategies. The potential significance of changing work arrangements has been confirmed by overseas research. For example, a study of the Swedish mining industry by Blank et al (1995) found that an apparent improvement in injury rates over a decade completely evaporated once account was taken of the increasing use of contract miners (whose workers’ compensation classification was not mining but the industry classification of the contractor. As discussed elsewhere in this chapter, use of labour leasing also offers opportunities for claims massaging by individual companies. These shifts in labour usage can also affect which companies are targeted for compensation penalties or supplementary levies on the basis of poor performance, and thereby weaken the effectiveness of bonus/penalty systems and preventative measures linked to this. Regulators in a number of jurisdictions have recognized this issue. As one observed: For example, what we might find is where the supplementary levy consultants identifying clients to work with we may be missing a large number of large employers because they’ve outsourced the high risk activities to labour hire/labour leasing firms…There’s one at the moment, an alloy wheel manufacturing plant, which has been using labour hire workers for quite some time. Their treated quite differently to their permanent workforce so if there’s an injury no claim form appears from the labour hire agency because there is this sort of hidden intimidation that if lodge a claim then you’re not wanted.
Another issue in relation to the accuracy of workers’ compensation claims data is the impact of changes to legislation in a number of jurisdictions that make some types of claim (such as those in relation to occupational stress) more difficult to lodge or which require the employer to pick up costs for the first days of a claim (five days in the case of Tasmania). These changes have potentially significant effects in terms of changing employment relationships. First, as noted elsewhere in this report occupational stress has been linked to downsizing/organizational restructuring but these changes will remove evidence of this connection for both compensation and preventative purposes. Responding to a question about organisation restructuring and its effects on occupational violence, family/work balances and the like, a representative from one agency was explicit about the role of claims in driving prevention policies: Looking at it more strategically from our point of view, they’re issues that are starting to raise their head. We’re still trying to fight the issues that have been sitting on our claims database, particularly manual handling, which have been there for a long time and now we’re getting really serious about addressing them…I would suggest in a lot of cases, while we recognise that those things are starting to come up the organisation
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hasn’t done anything about it yet… (name’s agency) is very much industry focused at the moment…They’re not the sort of things that we’re really looking at organisationally at the moment.
Staff in this agency went on to say as worker’s compensation claims data on bullying and stress got better this would help them to launch more activity in areas like the consequences of organizational change. Yet this would amount to a ‘catch 22’ situation if the policies pursued by workers’ compensation agencies made it more difficult for such claims to succeed. Second, there is a possibility that the requirement for employers to pay wages the first part of a claim (say the first five days) will affect their willingness to report short-term claims and may discourage workers claiming for such incidents, especially more vulnerable groups like temporary workers. Interviews revealed that agencies in some the affected jurisdictions had experienced a reduction in reported injuries and illness following this measure but at least one indicated that investigation had not clarified whether this represented an actual improvement in OHS (due to employers taking more efforts at OHS in response to the new cost incentives) or was essentially an outcome of under-reporting. 5.2.3 Increases in claim frequency or costs While changing employment relationships may reduce both nominal and effective coverage of parts of the workforce in terms of workers’ compensation it is also possible (as US evidence indicates) it may contribute to an increase in claims frequency or costs amongst at least some groups of contingent workers. Yet, as noted elsewhere in this report most agencies in Australia are unable to undertake a similar analysis from their workers’ compensation claims data because this data fails to differentiate employment status (most notably enabling a comparison of casual/temporary and permanent workers) or have not systematically tracked claims experience of employers who have downsized/restructured. A number had a limited ability to undertake some analysis in relation to particular arrangements such as labour leasing and targeted examinations had also revealed more ‘selective’ evidence. For example, the South Australia Labour Hire Taskforce Report (WorkCover Corporation of South Australia 2001g: 3) noted that: A further concern (both internal and external of the Corporation) relates to the spiraling increased cost of claims and increase in the levy charged associated with the ‘labour hire’ industry. This has seen increasing number of claims through an increased use by industry of ‘labour hire’.
For other categories, such as self-employed subcontractors, coverage exclusions meant the data simply did not exist. Hence, where workers moved from employee status to selfemployed-subcontractors (and especially where this involved workers in higher risk jobs) the claims data might register an improvement in frequency and cost even if the actual number of injuries to workers performing this work and other cost burdens (Medicare, social security and the like) had actually increased. Interviews conducted for the project did provide some support for the contention that changing work arrangements could affect claims frequency and costs. The head of one workers’ compensation agency stating that their tracking of claims had revealed a clear correlation between instances of restructuring/downsizing by organisations and an increase in stress-related claims. This was a retrospective examination of claims experience for particular firms rather a formal study. It should be noted that even if downsizing leads to an increase in 170 --
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claims frequency or average claim costs (if these additional claims are on average more costly) the impact on premiums is unlikely to be noticed let alone act as a warning to management because the reduced workforce (and payroll) is likely to reduce the total number of claims, claim costs and the overall premium paid. In short, the added costs of stress or other claims related to restructuring are likely to be masked (and staff interviewed from the agency concerned were aware of this). Some agencies have indirect means of obtaining relevant information. For example, analyzing claim levels, costs and trends for industries where they have some information on the level of contingent work arrangements. For exampled, one jurisdiction indicated that initiatives in relation to labour hire had been based on comparing the claims experience in industries where there were known to be considerable differences in the usage of labour leasing. 5.2.4 Determining Eligibility and Who is the Responsible Employer In addition to the safety-net aspect of coverage there is also the question of administrative efficiency. Existing definitions can create severe administrative difficulties not simply determining eligibility but also in determining the precise status of workers. As already noted, workers’ compensation entitlements do not extend to all workers and determining whether an injured worker falls within the coverage definition in specific workers’ compensation legislation is a necessary precondition to lodging a successful claim. The definition of eligible worker in most workers’ compensation statutes in Australia (and in other countries like the USA and Canada) is largely based on historical common law notions of an employee, often with few extensions to specific categories of nominally self-employed workers (such as some building subcontractors or clothing outworkers). However, the expansion of flexible employment relationships has involved both a blurring of the distinctions between employees and self-employed workers as well increasing the number of workers who status is ambiguous (exacerbated by situations where the regularly worker moves between self-employed and employee status over time). This issue has been a source of concern for at least some workers’ compensation agencies outside Australia. In its briefing paper, the Workers’ Compensation Board of British Columbia (WCB of BC, 1997:6) noted that every month the Assessment Board had to examine 5,000 to 6,000 applications from persons wanting to register as independent operators or employers to determine whether the applicants were an employer or a worker (the latter being precluded from paying assessments). It (WCB of BC, 1997:20) concluded: ‘The problem of distinguishing between contracts of employment and contracts between independent firms will likely become more complex and controversial as the number of people in non-traditional work relationships and other forms of contracting for services emerge.’
Interviews with workers’ compensation agency representatives in the course of this project echoed these concerns (ie determining the eligibility of particular categories of workers). Indeed it was acknowledged as a problem in virtually every jurisdiction (Queensland, South Australia, Tasmania, ComCare, Victoria). When asked whether the problem was growing over time most agencies could not offer a definitive answer. Some suggested they thought there had been roughly the same number of disputed cases in recent years although they still regarded it as a serious issue. Others indicated it was not so much the current number of cases, as the resources required to decide complex cases and the potential for more disputed cases 171 --
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with regard to specific areas like transient workplaces. The potential for extended litigation is well-illustrated by a recent Tasmanian case where a slaughterman who had spent 20 years with the same firm was converted from an employee to a contractor in March 2000 and in the following August applied for workers’ compensation after receiving a shoulder injury. The Workers Rehabilitation and Compensation Tribunal refused to pay the claim and a subsequent appeal by him to the Supreme Court of Tasmania was dismissed (Thompson v Cooee Point Abattoirs Pty Ltd [2002] TASSC 41 21 July 2002; and CCH OHS Alert 13 August 2002). The processes for determining eligibility where there is some ambiguity or a dispute amongst the parties vary between jurisdictions. In some jurisdictions that have privately underwritten and private market driven systems (such as the ACT, Western Australia and Tasmania) issues of coverage are normally determined in the courts. That is, if a private insurer denies the claim on the basis of eligibility the worker has recourse of taking the insurer to court. The onus this system places on the worker taking legal action may have a discouragement effect. At the same time, an interviewee for one such jurisdiction indicated that, in her view, court rulings had slowly but progressively widened the definition of worker and, further, recent legislative amendments would significantly extend this process. Without denying this, with the limited resources available it was still a relatively simple matter to identify cases, involving extended litigation and complex legal argument. For example, two weeks after the Thompson v Cooee Point Abattoir case in Tasmania, the Western Australia Court of Appeal rejected the claim for workers’ compensation a female bicycle courier injured in an accident because she was deemed to be an independent contractor not an employee and therefore not workers as defined in s5 of the Workers’ Compensation and Rehabilitation Act, 1981. In dismissing the appeal, the court (Daykin v Neba International Couriers & Anor [2002]) observed that couriers working for the respondent could be individuals, partnerships or businesses and that: They were at liberty to subcontract their services if they wished to do so…Very significantly, they had the right to control the amount of work they did. They could refuse to undertake particular jobs and could regulate their working hours. If they wished to combine their courier activities with other work, they were at liberty to do so and the work they would be given would be adjusted accordingly.
Without questioning the facts of this particular case two general points can be made. First, as this report has shown in earlier chapters the apparent legal rights of subcontractors are often illusory due to their economic subordination to their ‘employer’. Second, as such workers are seldom unionised it has to be wondered at their capacity to engage in extended litigation (with a substantial risk of failure). In other words, how representative are the cases that reach this level or are a considerable number of potential claimants discouraged either because they are uncertain if they have a legal entitlement or lack the resources to pursue a claim? These issues warrant serious consideration. Other jurisdictions, where the government plays a more critical role (including, as in Queensland, being the primary insurer) rely more on an administrative processes including special tribunals. Whether this approach is more conducive to eligibility-denial or such denials being challenged is unknown. The manger of one agency that used a tribunal (South Australia) expressed the view that given the high level of litigation regarding workers’ compensation claims many of the key issues surrounding definitions of a worker for the purpose of the Act had been clarified. Indeed, it was felt that this issue was a source of fewer cases than in the past and Claims Agents, too, needed to spend little time on the issue. A further complication raised in the same jurisdiction (and mentioned elsewhere in this report) is 172 --
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the capacity of the employment status of workers to change on a regular basis in some industries like construction (ie between self-employed subcontractor and employee) and this, it was recognized, could also affect the lodging of claims by individuals. The time spent on deciding eligibility is likely to be affected by the extent of coverage so that jurisdictions with a narrow coverage definition and fewer deeming provisions have to deal with fewer questions of eligibility than a more expansive system. Given logistical constraints on the project, it was impossible to obtain and analyse data on the overall number of eligibility determinations/disputes, whether different systems for determining eligibility significantly affected the level of determinations (including discouragement effects) and the precise implications for injured workers accessing their entitlements. Such determinations are, of course, also affected by changes to definitions of worker/eligibility in workers’ compensation legislation. There would seem to be some value in undertaking a detailed and comparative assessment of the questions just raised, including the interaction of legislative changes with court rulings over time. Changing work arrangements can complicate the question of eligibility for workers’ compensation in other, less apparent, ways. For example, as noted elsewhere in this report, where a worker changes job, employer/employment status or occupation on a regular basis – something encouraged by more flexible work arrangements – it may be far more difficult to link an injury and more especially a disease or illness to a particular work exposure/employer. The growth of home-based work, including instances where workers spend part of their time at work, also raises complexities in the adjudication of eligibility for workers’ compensation. With regard to the latter, one agency referred to the case of a senior manager who suffered a heart attack while using his home-based work computer on a Saturday morning. The agency had to decide whether this incident was work-related. Adjudications based on assessing a complex set of facts are nothing new to workers’ compensation (and were especially common in relation to journey injuries) but it does appear that the growth of some flexible work arrangements, like home-based work, will result in a commensurate increase in the number of situations where complexities are encountered. One further eligibility issue worthy of brief mention is the situation of volunteer workers. As noted in the previous chapter while emergency workers do have protection under workers’ compensation the situation in relation to some other groups is more variable (by jurisdiction), ambiguous and may depend, to some degree, on the attitude adopted by the body that ‘employs’ them. For example, one jurisdiction noted that some Church groups took out workers’ compensation cover on behalf of their volunteers but where this was not the case the workers were without cover. The access of volunteer workers to workers’ compensation also appears to vary widely internationally. The workers’ compensation legislation of Quebec in Canada provides a mechanism whereby employers have the option of electing to provide coverage for their volunteers. Even this limited form of cover appears exceptional in the North American context. Another administrative complexity has arisen in relation to deciding precisely who is the employer and the (deliberate?) wording of some contracts has been seen to contribute to this. This issue was raised by representatives of virtually every regulatory agency spoken to with the notable exception of ComCare (for the obvious reason that it covers workers employed by federal government agencies). One OHS agency representative described a case currently being confronted: 173 --
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…we have a scenario at the moment where’s there one particular company, with the nature of the contract they’re using with the contractees, there’s an argument running from them that yes the people are workers for the purposes of the Act but they’re not their employer. So it even goes down to contractual arrangement and how that’s worded.
Identifying the employer may be especially difficult in co-employment situations involving subcontractors (especially where multi-stepped pyramid structures of subcontracting are involved) and leased/agency workers. In the USA, for example, this has not infrequently resulted in litigation when the workers’ compensation authority’s determinations are appealed (for subcontractor cases see Jones v Lillibridge 3149 CRB-2-95-6 10 December 1996 and Walton v Hector Trucking 13 Conn Workers’ Comp. Rev. Op.239, 1835 CRB-1-93-9 13 April 1995). For obvious logistical reasons, the general policy adopted by agencies/legislators in the US (and in Australia and other countries) has been to locate responsibility for workers’ compensation coverage with the labour leasing agency. Even so, the employee or contractor issue often remains ambiguous. In the course of interviews the workers’ compensation agency staff from the various jurisdictions were asked whether determining who was the responsible the employer was a serious issue. A number (Tasmania) indicated they were aware of numerous cases. Workers’ compensation agency officers were also asked whether there was any trend over time in relation to the extent of this problem and several replied (Tasmania) that they believed the problem as getting worse. Obviously such responses are impressionistic but they do indicate that, at the very least, a closer examination of the actual data would be worthwhile. In the USA at least, the diversity of labour leasing agreements (including highly informal arrangements) as well as exemption provisions in some laws has afforded avenues for evasion and litigation. In Connecticut, for instance, compensation agency determinations on whether a worker/subcontractor was employee of a labour hire firm or the leasing employer at the time of their injury are regularly challenged (see Velez-Ramos v Labor Force of America et al 3070 CRB-4-95-5 25 November 1996 Connecticut Compensation Review Board). Special provisions on subcontractors or short-term ‘lending’ of workers, as well as variations in the task performed by firms involved in leasing arrangement (including the handling of remuneration) and the pattern of subcontracting or leasing specific to a particular industry provide the considerable scope for complex legal argument (Anderson, 1999). In construction, for example, the limited duration of jobs and frequent movement by workers between jobs and also between self-employment and employee status makes issues of eligibility and liability by no means straightforward (see Covillion v Plante Brothers Inc, 3364 CRB-07-9606 11 December 1997 Connecticut Compensation Review Board). It can, indeed, readily lead to a tussle involving the claimant worker, a firm, a labour agency and two insurance companies (see for example, Minuit v. PDF Construction Company et al, 3145 CRB-3-95-7, 26 November 1996, Connecticut Workers’ Compensation Review Board). Interviews conducted with agency representatives for this project uncovered little concern with disputes between a host firm and labour leasing firm as to who was the employer – perhaps an outcome of the clear and consistent policy approach in Australia of assigning responsibility to the labour leasing firm. However, a number of related concerns were raised. For example, in relation to recovery against third parties pursuant to Section 54 of the Workers’ Rehabilitation and Compensation Act, the South Australian Labour Hire Task Force Report (WorkCover Corporation of South Australia, 2000:5) noted: 174 --
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Against the increasing emergence of the use of labour hire industry generally by business and a corresponding decrease in third party recovery, the issue of identification of “third parties” is compounded by the limited data collected at the time of reporting a workplace injury… From a recovery and OH&S perspective the most important strategy is to increase the Corporation’s ability to identify host organisations. To this end changes have recently been made to the instructions that accompany the Employer Report Form which should facilitate more accurate identification of host organisations.
Further, concern was expressed (in Queensland for example) about the how the nature of the contract between the leasing firm and the leased worker affected the former’s workers’ compensation responsibilities. Self-employed workers are largely excluded from worker’s compensation coverage (though they can take out a policy of accident insurance with WorkCover) so as in the British Columbia case (see above) what is a contract of service and the distinction between this and a contract for services assumes critical importance in terms of access to employer-funded workers’ compensation. As an aside it can be noted that selfemployed workers who elect to take out a policy of accident insurance with WorkCover enjoy the benefits as employees covered by workers’ compensation with the exception of common law rights. At the same time, government agency representatives emphasized that one of the difficulties here was the movement between self-employment and employee status – a problem identified at other points in this report. 5.2.5 Inter-jurisdictional Issues, Foreign and Illegal Workers The growth of flexible employment arrangements is also drawing attention to if not exacerbating a number of inter-jurisdictional issues in relation to compensation coverage and claims handling. In Australia there are 10 separate workers’ compensation jurisdictions (one for each of the six states, the two territories, federal government workers [including the defence forces] and seamen). Despite protocols, the mixture of jurisdictional self-interest and the degree of compatibility or differences in eligibility/benefits and claims handling has always presented the potential for problems with regard to workers who moved between different jurisdictions or where there was question as to which employment was responsible for a disease or injury (for a case raising some of these issues see Paul Daniel Godford v Oil Drilling and Exploration Pty Ltd, [2001]). To address this cross board provisions have been recommended (See Heads of Workers’ Compensation Authorities, 1997: 20). Issues in relation to the coverage of mobile workers, such as those working in entertainment troupes like circuses, which move between jurisdictions as part of their work are not new. A number of these problems were raised in the course of the project. For example, workers’ compensation staff in Tasmania referred to instances where maintenance workers flown into King Island from Victoria and were injured, returned to Victoria to lodge a claim there. Reference was also made to anecdotal evidence of a similar situation occurring where workers for a small Tasmanian sub-office of a Victorian company had their workers’ compensation claims handled through head office. In another case representatives of the entertainment industry in New South Wales expressed concern that entertainment groups visiting Queensland were denied cover under that State’s workers’ compensation legislation unless they resided there for at least six months. At the same time, Queensland, and other agencies for that matter, can point to need to have rules about an employer’s principle abode. Further, 175 --
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the situation involves a series of exchanges so that whatever ‘advantage’ some jurisdictions may experience in one area is likely to be offset by disadvantageous exchanges elsewhere. With regard to geographically mobile workers, such as seasonal fruit-picking and other harvest workers, shearers and some groups of tourism/hospitality workers (such as recreational dive trainers/supervisors, snowboard/ski instructors and other ski-resort workers) there is always going to be issues as to in what jurisdiction did injury occur in (even more complex in the case of aggravated injuries). These jobs are typically casual or fixed term. While the number of workers involved in some of these jobs has probably not experienced a significant growth over the past two decades (like shearing and fruit picking) – in some cases even the reverse – in other areas like tourism/hospitality the expansion of employment has been substantial, creating more potential for inter-jurisdictional issues. There is clearly an inter-jurisdictional dimension to the use of overseas workers for short-term jobs in Australia including seasonal work (like the use of New Zealand shearers – not in any way a new development but something that appears to have grown in extent – and illegal immigrants in harvesting) and the introduction of workers on short-term visas to undertake specific or specialized tasks. In the course of interviews, most jurisdictions expressed some concern at problems posed by the short-term entry (legally and illegally) of overseas workers in terms of minimum labour standards as well as OHS and workers’ compensation. In Tasmania, for example, reference was made to a recent incident where a New Zealand company had imported workers to employ in its stores. A substantial group that potentially spans jurisdictions at both international and national level is backpackers (mostly from Europe and North America) who typically spend around a year traveling Australia and undertaking short-term/casual jobs like fruit picking, tourism/hospitality jobs, as couriers or as clerical workers/receptionists. Even by 1994 there were 217,200 backpackers in Australia, and while only around 50,000 obtained a work permit available the overwhelming majority undertake paid employment to help finance their stay. A recent Australian government inquiry found that 42.8% were employed in labouring jobs (mainly in fruit-picking, factory hands, kitchen-hands, store-persons, cleaners and builders’ labourers), almost 25% were employed in retailing/sales and another 20% in clerical work (Commonwealth of Australia Joint Standing Committee on Migration, 1997:24). This is a significant source of short-term labour and, as submissions from farmer’s and tourism operators and industry groups made clear, it had become particularly important to some industries. It should be noted that a number of the jobs in which backpackers are concentrated have a relatively high incidence of occupational injury and disease. With the partial exception of the factory work, employment regulation and union presence is also relatively weak in all these areas and available evidence indicates that backpackers have limited knowledge of their obligations and entitlements (Commonwealth of Australia Joint Standing Committee on Migration, 1997:117). During the inquiry a number of submissions noted the tendency of backpackers to be exploited or to work below award rates on a cash-in-the-hand basis which avoided tax and because they had no access to social security benefits (Commonwealth of Australia Joint Standing Committee on Migration, 1996:S382, 405-410,414-7,449). The inquiry did not particularly pursue these issues or the question of the workers’ compensation entitlements of backpackers. That serious work-related injuries can and do occur to backpackers is highlighted by the fact that a backpacker was amongst those leased workers injured at Warmans International pump manufacturing plant in Sydney resulting in WorkCover NSW obtaining convictions against both Warmans and two labour hire firms 176 --
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deemed to have breached the NSW Occupational Health and Safety Act in 1997. While it can be presumed that backpackers injured while working, at least those with work permits, are entitled to workers’ compensation there are number of important issues warranting consideration, including: How to ensure they have reasonable knowledge of their entitlements (especially as these workers move between jurisdictions)? How to address the situations where injured backpackers lack a work permit (including ensuring consistency across jurisdictions)? How to address situations where a backpacker has been injured at one job and the injury is then aggravated at a job in another jurisdiction? What is happen in the case diseases arising as a result of exposure to hazardous substances after a gestation period to mean they have left Australia? The employment of illegal immigrants, who tend to be concentrated in contingent jobs, provides an additional level of complexity. In the United States the access of illegal workers to workers’ compensation when injured has been the subject of litigation in a number of state jurisdictions (see for example Dowling v Sol V Slotnik and Diane Reverand, 3062 CRB-4-955 and 3277 CRB-4-96-2 5 February 1997, Connecticut Workers’ Compensation Review Board). In one recent case the North Carolina Court of Appeals held that an illegal immigrant injured while working in construction was entitled to workers’ compensation, arguing that: ‘that the wear and tear of the workman, as well as the machinery, shall be charged to the industry’ (Ruiz v Belk Masonry Co., No.01-98 NC Ct. App. Feb 19 2002).
During the course of interviews for this project regulatory agencies saw the main issue as being the limited awareness of entitlements (and given family networks may not even see themselves as working) or a reluctance to make claims (due to fear of discovery) amongst illegal immigrants rather than their formal entitlements (for employer views see Chapter 6). Rob Guthrie, (cited in Thomas, 2002: 8) a workers’ compensation law specialist who has studied the issue, supported this interpretation. He argued such workers were entitled to access so long as the work itself was not illegal and that were good policy reasons for this because, as the employer was likely to be uninsured, they would have to pay the claim directly and thereby effectively incurring an additional penalty. However, he noted the real problem he was a reluctance to claim for fear of exposure and dismissal (cited in Thomas, 2002: 8-9). An analogous situation was seen to arise in relation workers engaged under illegal cash-in-hand payment systems (such as some body hire in the building industry), including persons in receipt of social security or unemployment benefits. In addition to the issue of illegal immigrants, transient or mobile workers (including some from overseas) there is also an inter-jurisdictional aspect to outsourcing and the use of leased workers by federal government agencies. As was noted by ComCare representative interviewed for the project, where, as has increasingly occurred, federal government agencies outsource activities (for example, security guards in federal Department of Health and Aged Care buildings are not employees of a large security firm) this means the workers undertaking those tasks are no longer federal government employees and thereby covered by its compensation agency (ComCare). Rather, they fall under the jurisdiction of the workers’ compensation agency in the state or territory where they are working. Of course, where the outsourcing involves self-employed workers (as in the case of small partnership consultancies 177 --
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or food/beverage providers) the shift may entail moving workers beyond mandatory workers’ compensation coverage altogether. As noted in relation to preventative legislation in Chapter 4, in addition to the impact of outsourcing there is also an issue where multiple employer worksites involve employers covered under different jurisdictions (most typically where Commonwealth employers share a worksite state/territory government or private employers). In this situation these workers will under different workers’ compensation regimes. The movement of workers out of ComCare’s jurisdiction as a result of outsourcing/leased work entails (except where self-employed workers undertake the tasks) a shift of financial responsibilities to the state or territory jurisdiction. The implications of the shift could be have financial and other administrative implications if it entails groups of workers in generally higher risk or claim categories viz a viz workers’ compensation (or even groups of high risk claimants in terms of ComCare’s overall portfolio, which prior to this shift didn’t match the occupational/industry coverage of other jurisdictions). As far as could be determined no assessment of this transfer has been made by either ComCare or state/territory agencies. Of course, at one level this could simply be viewed as an offset of the shift of long-term injured workers from predominantly state/territory workers’ compensation regimes to the federal social security system (see Stewart and Doyle, 1988:8 and discussion below). It needs to be reiterated that inter-jurisdictional compatibility is a very significant issue in its own right and involves complex exchanges. The point of this section is simply to identify where the interaction of inter-jurisdictional issues and some flexible employment arrangements warrants recognition, especially where problems in relation to the administration of workers’ compensation and worker entitlements arise. 5.2.6 Ensuring Insurance Cover, Fraud and Premium-rating Problems In interviews officers from virtually every worker compensation agency (with the notable exception of ComCare) indicated serious concerns in relation to under-insurance/noninsurance and premium rating associated with changing work arrangements. In relation to non-insurance and under-insurance the prevailing view was that while both were serious problems the latter was by far the more significant issue. Worker’s compensation agencies and private insurers use a variety of methods of classifying employers (according to industry and work activities undertaken) to determine premiums. In Australia, agencies predominantly use an industry-based premium rating system. That is, agencies classify premium rates for specific industry categories or subcategories on the basis of historical claims behaviour (higher for high claim industries like construction than lower claim industry classifications like administrative services). An employer’s premium is determined on the basis of their industry classification and total payroll (to take account of employment size), often with bonus or penalty adjustments where the organisation’s past claims behaviour falls outside certain bounds. In jurisdictions such as Queensland, where an employer’s activity spans a number of industries (say construction, cleaning and transport) then they will pay the relevant industry classification (WIC) for each component of their operations. For large and diverse labour leasing firms this meant paying the WIC for each industry where they sent workers – a by no means simple task. As in other jurisdictions, QComp undertakes a compliance audit program using its own inspectors to detect evasion/manipulation of premiums (although the agency could not estimate the significance of 178 --
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misattribution of work for leased labour). However, as noted below ensuring compliance has proved problematic. Employment status of workers has not been used by agencies to determine premiums and agencies in most jurisdictions spoken to do (such as Queensland) not include this a requirement to provide this information in their claims forms. Hence most are unable to analyse their claims data on this basis. While not including employment status in the determination of premiums is the norm amongst workers’ compensation authorities in other countries, private insurers in USA have become concerned at the differential costs in claims involving temporary workers and a number have also refused to provide workers’ compensation cover where labour is leased into particular workplaces/industries. In Australia no private insurer we are aware of has followed this path but private insurers do charge differential motor accident insurance premiums on owner/drivers and employee drivers in the long haul road transport industry (Quinlan, 2001). As noted in an earlier section, in the USA breakdowns of claims by employment status in a number of state jurisdictions (Washington and Minnesota) have revealed significant differences in claims behaviour/costs between permanent and temporary workers (Foley 1998; Butler, Park and Zaidman, 1998; and Butler and Park, 2001). Over the past decade there has been mounting concern that the growth of small business and changing employment arrangements has affected both premium collection and rating. Labour hire or labour leasing has been a particular cause for concern. The South Australian Labour Hire Task Force Report (WorkCover Corporation of South Australia, 2000: 3) found that: The increasing use of ‘employment services’ (ie labour hire) and its diversity has: •
tested the appropriateness of the existing classification and policy/guidelines which appear as not specific enough;
•
seen the policy/guidelines not being as responsive to changes in labour market activity resulting in some cases to an inappropriate application of policy/guidelines.
The growth of labour supplied under leasing/labour-hire arrangements by specialist agencies (also known as labour hire firms) has resulted in the outright evasion of workers’ compensation coverage by these firms as well as exploitation of ambiguities and manipulation of premium-ratings. These practices include the deliberate misclassification of work (eg labelling plant operation as plant hire), under-declaration of workforce and wages bills, ‘rolling over’ companies with poor records, hiding workers undertaking hazardous tasks in another group (like clerical workers), failure to cover deemed employees or cash-in-hand payments and other illegal practices. Workers’ compensation authorities in Australia (and elsewhere for that matter) have been aware of these problems for some years (see for example WCB of Queensland, 1994:30-1). Interviews conducted with government agency representatives in virtually every jurisdiction for this project acknowledged this as a serious problem. As a manager of one jurisdiction remarked: And we’ve come through a fairly colourful period of premium arrangements with labour hire. We set up a reference group where we’ve been consulting over the last three or four years in relation to the increasing… focus on the labour hire industry and its ballooned from that. We adjusted our premium process in relation to labour hire because of exactly the reasons you’re discussing, the discrepancies, and in January
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this year took up a three-tiered approach to what we’ve termed employment services, the labour hire industry.
It was suggested that particular labour hire firms could indicate an occupational profile for the workers on their lists that did not match the actual placements (and thereby resulted in a reduced workers’ compensation premium) and that the problem had also become accentuated in relation to particular industries. Misclassification could occur at both point of premiumrating and claims submission. The ACT, for example, which uses ANZSIC code to classify premiums/claims, found this was extremely problematic because the labour hire component was primarily ‘hidden’ under the ANZSIC classifications of ‘personal and other services’ or, with regard to construction under Totalcare as ‘government administration. This required the agency to undertake detailed analysis to determine the extent and try to rectify misclassification. As noted in Part 2 of the report, agencies are increasingly responding to this problem by developing a specific industry classification/specific premium-rating/s for labour hire. While claims manipulation and cost shifting are general problems the particular features of schemes in particular jurisdiction may affect the extent and impact of these activities. For example, in South Australia that, as result of low thresholds, there is a far higher level of selfinsurance (around 35% of the state) than in other Australian jurisdictions (for details of selfinsurer operations see Shaw, no date). Moreover, in this state claims management has been outsourced to Claim Agents. According to on senior manager in South Australia, given the extent of self-insurance the potential for cost shifting by them via labour hire and subcontracting was a particular concern: The issue of things like labour hire and other alternate forms of employment are extremely sensitive because for two reasons. As the insurer of last resort for selfinsurers, we have to be very mindful of how many people are hurting but also the majority of the labour hire industry at this stage is not self-insured so there could be a fair bit of cost-shifting. So the prevention measures self-insurers take with regard to their contractors and labour hire take are of crucial importance to us and for that reason we spend a lot of time scrutinizing prevention measures that self insurers take…There seems to be a rather lemming like desire by some of the larger labour hire organisations to themselves become self-insurers.
This concern was a crucial factor in South Australia introducing a set of premium rates specific to the labour hire industry (see Chapter 11). The insurance problems were seen to extend beyond workers’ compensation with reference being made to one or two incidents where self-insured employers who made extensive use of labour hire were unable to procure public liability insurance. It was noted that public liability was still one of the few areas in the South Australian scheme where common law operated. Where a self-insurer host injured a labour hire worker they were not protected by the workers’ compensation in-scheme ban on common law. In other words, labour hire workers could sue the host as a ‘third party’ because it was not their employer (for whom common law suits were precluded). Labour hire workers had started to pursue this option resulting in considerable concern on the part of public liability insurers. Agency staff noted that a flow-on effect of this has been that some selfinsurers had reduced their usage of leased workers. Another limit on labour leasing mentioned was the threshold for self-insurance of 200 employees (ie if a firm near this mark made too much use of labour leasing it fall below the threshold).
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The problems discussed above have been around for a number of years and have caused growing concern amongst unions. In the late 1990s union protests over these practices in New South Wales (for evidence of this see Labor Council of NSW, 1999 and correspondence, Secretary CFMEU to General Manager and Assistant General Manager WorkCover 17 May 1999) led the Workers’ Compensation Advisory Council to establish a working party to consider remedial action. Similar problems have been identified in the USA. This includes misclassifying workers (see AFL-CIO Work in Progress, 28 June 1999) and disguising the high-risk tasks (like asbestos removal) temporary workers are undertaking (see Florida AG Office of Statewide Prosecution News Release 23 September 1997). In the most extreme case it has been alleged that payroll-laundering firms have been established who claim the employees of other firms as their own in order to fraudulently minimise workers’ compensation and tax liability (Nakamura, 1995). A number of US state legislatures have amended their legislation to strengthen the onus on temporary help/labour hire agencies to take out workers’ compensation cover on behalf of the employees they supply (see Berreth, 1997:44,46) but it appears that neither this, nor enforcement measures, have been entirely effective. It is important to acknowledge that the attempted manipulation of premiums (by employers putting as many of their workers as possible in low risk/low premium rating categories) is not a new problem and nor is it confined to agency labour. However, labour leasing provides more opportunity for such practices to be disguised. Further the manipulation or understatement of premiums is itself part of a broader issue of ensuring employers meet their workers’ compensation commitments including countering outright evasion. In this regard it can be noted that the growth of small business, contractors, labour hire firms and precarious employment creates additional administrative problems in terms of enforcing comprehensive compulsory insurance cover amongst employers. Small business and contractors have long represented a problematic group in terms taking out workers’ compensation insurance cover (Hopkins, 1994a: 81 and Phelan, 1997:6) and it is to be expected the scale of such problems will grow in tandem with the expansion of small business and contract arrangements. At the same time, the increase in temporary and clandestine employment also creates opportunities for even large firms to understate their workforce and payroll (the usual basis for calculating workers’ compensation premiums). Problems are liable to be most pronounced in industries like construction where precarious employment is the norm (for some fragmentary evidence on this see Turner, 1998). The overall scale of these problems is unknown and may vary widely under between countries with different regulatory arrangement. In the USA and Australia over the past five years publicized prosecutions suggest growing compliance concerns amongst workers’ compensation agencies (see WorkerCover NSW Press Release 5 February, 1997 and Florida DLES, (1998) Press Releases 2 July and 10 August 1998 and Florida AG Office of Statewide Prosecution News Release 28 October 1997). In NSW the Green Paper on workers’ compensation compliance (WorkCover 2001d: 8-9) analysed claim numbers and payments in the years 1995-96 to 1999-2000. The number of managed fund claims fell from 129,623 in 1995-96 to 120,864 in 1999-2000 but total payments increased from $1,030 million to $2,012 million. During the same period the number of uninsured liability and indemnity scheme claims (ie those arising where there were uninsured employers) fell from 769 (with a total cost $7.9 million) in 1995-96 to 403 claims (costing $8.1 million) in 1999-2000. The Green Paper (WorkCover, 2001d: 8) observed:
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The incidence of non-insurance is confined to the small business sector with the agriculture and construction industries being disproportionately represented. Available data suggests that non-insurance does not represent a significant financial risk to the WorkCover Scheme. The number of claims lodged against the Uninsured Liability and Indemnity Scheme (“ULIS”) in 1999/00 accounted for 0.003% of the total annual number of claims lodged under the WorkCover Scheme and 0.004% of total annual claims payments. There is provision for the recovery of payments made under the ULIS from the injured worker’s uninsured employer. Only a small proportion of payments are successfully recovered, however, due to either an incapacity to pay, the liquidation of the company of the death or disappearance of the employer. Prosecution of uninsured employers generally results in fines that are lower than the legal costs borne by WorkCover in initiating such action.
Although the number and total cost of claims appears these figures only count situations where a claim was lodged and paid under the ULIS. Missing are those uninsured employers who had no claims either because there were no injuries, workers were unaware of their entitlements or because employers persuaded the worker not to claim or to accept some other form of cover (eg Medicare). Evidence presented in this report indicates these alternative options could far outweigh the number of claims where the ULIS comes into play. Another factor of concern is the very low recovery rate from uninsured employers (averaging well under 20% of the total cost of ULIS claims for the period 1995-96 to 1999-2000 (WorkCover, 2001d: 9). Of course, beyond outright evasion of workers’ compensation insurance there is also the problem of under-insurance. While acknowledging difficulties in calculating the extent of under-insurance the Green Paper (WorkCover NSW, 2001d: 9) considered that underinsurance (unlike non-insurance) did constitute a significant financial risk to the WorkCover Scheme. Noting that the level of non-insurance varied between industries the construction industry was again singled out for special mention as a ‘poor performer’. Other problem industries (in terms of non-insurance and under-insurance) identified by WorkCover NSW’s data mining (see Chapter 11) but not mentioned in the Green paper were contract cleaning and clothing manufacture (especially outwork). The Green Paper (WorkCover, 2001d: 9) identified a number of means of securing a lower than required premium payment, namely: • • • • • • • • •
under estimation of wages at the beginning of a policy period; false statement of business activity to gain a lower tariff rating; failure to declare the acquisition of existing businesses to avoid the transfer of claims experience; failure to declare related companies, which are classified under lower tariff rates; liquidation of a company and establishment of a new company to avoid premium debt; failure to supply wage declarations and wage estimates resulting in automatic renewal of policies at lower premium levels; exclusion of deemed workers from wage declarations on the basis they are “contractors” (this is, in part, possible because of the uncertainty surrounding who is a ‘deemed worker’); under-declaration of wages (including cash payments to workers); establishment of separate companies for the purpose of avoiding or reducing the amount of premium payable.
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A government commissioned report in employer compliance (Le Couteur and Warren, 2002) confirmed the assessment that non-compliance was a serious issue, noting that there were legal strategies (such as company splitting) to minimize the impact of past claims on future premiums. It should be noted that while small business are commonly viewed as the chief offenders in relation to compliance with workers’ compensation premiums in the area of under-insurance there is actually more scope for manipulation by medium to large firms. Indeed, data mining by WorkCover NSW (Ermil Sipp personal interview) revealed that the middle-sized segment of companies was the most serious area in terms of under-payment. Medium sized companies also have more scope for manipulating their claims records in terms using normal sick-leave provisions and may also encourage workers to use Medicare (evidence of this as well as outright evasion was presented to the long haul trucking inquiry. Quinlan 2001). This is also consistent with a number of the strategies (like company splitting) identified in the Le Couteur and Warren (2002) report. Interviews conducted in the course of the project indicated that virtually every jurisdiction saw the failure of some employers to take out workers’ compensation cover and underinsurance as extremely important issues and a number had undertaken targeted audits or inspections in response to these concerns. A small target inspection of 100 employers in Tasmania identified five who had no workers’ compensation policy. Officers in this jurisdiction were unaware of whether there was any trend in relation to the extent of such problems although they hoped to discover this in the next round of targeted inspections. In November 2000 WorkCover NSW conducted a blitz of about 540 businesses in Western Sydney, Illawarra and the Central Coast. The blitz revealed about 5% of employers who were not insured and a further 4% who appeared to have not fully declared the level of wages of employees. Another 12% had had their policy ‘auto-renewed’ by insurers, raising concerns as to whether it was the correct level of insurance (WorkCover News February – April 2001,44: 6). In early 2001 South Australia ran a project on employer compliance of all types directed at the light industrial area of Adelaide that revealed non-compliance in the range of 25% (covering issues such as location, number of employees/under-insurance and nonregistrations). The project, which entailed sending in people to door knock the entire area and check their details against WorkCover records, was a specific response to concerns with work arrangements that gave increases scope to premium avoidance or under-insurance, such as the increased scope for understating the number of employees afforded by growing use of temporary workers. The audit disclosed a high level of non-compliance in relation to remuneration levels (in the order of 30%) due to the understatement by employers of their workforce. Premiums may also be affected, either accidentally or deliberately, by the level of reporting of claims to workers’ compensation authorities. Most agencies saw under-reporting as not insignificant although evidence of it was largely anecdotal and could range from matters as simple as treating a minor injury on-site or via a local general practitioner or more extensive in-house treatment of workers by employers with extensive facilities for this through to the active disguising or discouragement of claims for serious injuries and diseases (using Medicare, shift-rosters, sick leave or other leave entitlements and even social security). Under-reporting may be a factor in the lower claim rates of small business although given the anecdotal nature of the evidence it is impossible to make any firm observations here, and staff in several agencies made the point they were aware of quite large companies that they believed to be engaged in under-reporting. However, the issue of reporting and premium 183 --
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rating in relation to small firms does warrant examination. For example in the course of this project it was learned that one employer (a kindergarten) had following fully reporting a claim (and experiencing an increase in its insurance premium) chose to forego making a claim in relation to a subsequent incident, paying for the time lost directly. Such anecdotal evidence needs to be treated with caution but does suggest issues in need of closer examination. Identifying common characteristics in premium evasion and manipulation is obviously critical. In addition to the problems posed by labour leasing other factors being investigated include firm size and industry. A number of agencies indicated that failure to take out workers’ compensation cover was especially prevalent in relation to small business. In NSW more extensive targeted auditing and data analysis has identified the transport, construction and clothing industry as particularly problematic in relation to the payment of workers’ compensation premiums. These are all industries marked by a large number of small employers as well as extensive use of self-employment and subcontracting arrangements (and industries the Australian Taxation Office has also felt the need to target due to compliance problems). In two of these industries (road transport and home-based clothing manufacture) identifying and monitoring/auditing workplaces present particular difficulties and in construction too, employers move their workplaces on a regular basis and the number of employees can change on a daily basis (or be disguised). Most other agencies made specific reference to construction as a major source of concern in terms of ensuring employers took out workers’ compensation cover (and cover for all the workers that had legal obligations towards) and several mentioned clothing outwork and road transport (including the problems posed by owner/drivers in the long haul component and leased drivers in short haul). The widespread avoidance or understatement of workers’ compensation premiums in these three industries is associated with other forms of regulatory evasion and the manipulation of legal categories to minimize labour costs (including wage payments) and taxation payments. For example, a report commissioned by the NSW government on employer compliance with both workers’ compensation and payroll tax (Le Couteur and Warren, 2002: 55) observed: Certain industries experience lower levels of compliance in respect of workers compensation and pay-roll tax. The Terms of Reference requested this review to give particular attention to the building industry. The approach taken in this review has been to develop rules that apply to all sectors that potentially pose problems of compliance for workers compensation and pay-roll tax. These sectors are typically characterized by a high level of contract workers, short term work and a transient workforce which leads to a more challenging compliance environment. The requirement of the Terms of Reference has been addressed by recommending a three step process for identifying employees where the second step addresses those sectors that potentially pose compliance problems through including for example, unincorporated contractors principally providing services as workers.
Further, in its submission to the Royal Commission into the Building and Construction Industry the Australian Taxation Office (2002) argued a high level of non-compliance with taxation obligations marked this industry (requiring well over 200 ATO field staff), amounting to 20 to 40% of income in some areas. The submission identified a number of devices used to evade tax requirements including high levels of cash payment (and entailing undeclared payments to contractors, to workers receiving social security and to weekday workers for weekend work), false invoicing and the use of bogus labour hire firms as well as 184 --
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phoenix arrangements (involving the deliberate liquidation of trading entities). The submission (Australian Taxation Office, 2002:1) also noted: Over recent decades there has been an increasing tendency to engage labour under service or results-based contracts rather than employment contracts. This is consistent with labour market trends more generally. However, there has been an ongoing need to ensure that contractor arrangements are genuine and that tax and superannuation obligations are properly met.
The ATO had pursued more than 750 cases against bogus labour hire firms and phoenix arrangements alone, and ignoring substantial fines and other penalties, its actions with the National Crime Authority have yielded an estimated $260 million in additional revenue. It hardly needs to be added that undeclared cash payments, bogus labour hire arrangements and phoenix arrangements can all entail a minimization if not outright evasion of workers’ compensation premiums. These substantial externalities seldom part of the policy debate on the move to flexible employment arrangements. Some agency staff expressed the view that, despite the general duty provisions in OHS legislation, there has been a fracturing of OHS responsibilities associated with changing employment relationships that was flowing onto the workers’ compensation arena. Problems arising from the mismatch of definitions of worker under OHS, industrial relations and workers’ compensation legislation have been raised at various points in this report. Consistent with this, in its submission to the NSW Labour Hire Task Force (2001:59) WorkCover NSW argued that host employers often believed that because they engaged only subcontractors they were not obliged to secure an insurance policy. Increased evasion of compulsory insurance requirements and other forms of externalisation pose potentially significant problems for the administration of premium-ratings. Problems may be most acute where bonus/penalty-rating systems are used. These schemes are inapplicable to the growing number of small businesses that are less able to predict injury risks (Industry Commission, 1994:61-3). Further, outsourcing and more flexible work arrangements afford large employers opportunities to offload risky activities or under-report injuries, as well as an increased incentive to contest or ‘massage’ claims. These problems have received little consideration despite the growing use of incentive premium rating across a number of countries, including Australia. Finally, as in the case of determining eligibility, combating evasion or understatement of insurance premiums places additional logistical demands on workers’ compensation agencies (and additional administrative costs on the system which reduce the proportion of total revenue paid to claimants). As will be seen in Part 2, use of sophisticated computer tracking can represent a resource efficient means of identifying and targeting non-compliance. Nevertheless, on the ground fieldwork is also required and in some industries this will be a demanding task. For example, in the late 1990s it was estimated that to address noncompliance in one industry (taxis) in a small jurisdiction would require the services of two full-time regulatory officers on a long term if not permanent basis. Extrapolating from this using even the most conservative assumptions would indicate that workers’ compensation agencies would need to dedicate considerable resources to enforcement and other additional administrative demands associated with contingent work arrangements.
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In sum, changing work arrangements are posing a significant challenge for workers’ compensation agency in terms of the evasion/manipulation of mandatory insurance cover requirements and premium rating. In other words, the growth of these arrangements has been seen to make ensuring compliance considerably more difficult. The notable exception is ComCare. ComCare avoids this problem partly because of the limited number of employers it deals with but more importantly because its cover is tied to employees of federal government employers. Other workers like leased labour and contractor employers, including potentially more ambiguous categories of worker, are not its responsibility but are the responsibility of state and territory jurisdictions (to cover or to at least determine eligibility for cover). 5.2.7 Access and Equity in Administering Claims Other administrative problems, including several relating to determining legitimate claims and equity, warrant mentioning. Evidence already presented indicates that precariously employed workers are less likely to be knowledgeable of their rights to compensation and more reluctant to make a claim, lest it jeopardise future employment and earnings. In countries like Australia and the USA (see Hirsch et al, 1997) unions perform an important but often unrecognised role, providing information on compensation entitlements, discouraging employer victimisation, and arranging expert evidence and representation in disputed cases (not to mention political lobbying over coverage and benefits). However, in Australia and the USA, if not elsewhere, contingent workers are concentrated in weakly unionised sectors and there are often greater logistical problems providing assistance even where these workers are union members. Quite apart from issues of deliberate evasion by employers and under-utilisation, the growth of precarious employment will make it more difficult to determine some categories of claims. Where part-time workers hold multiple jobs simultaneously (increasingly the case. See Lettau, 1995), where they work from home or where they hold a succession of jobs, even relatively uncomplicated trauma-based claims can be problematic (Reinhard and Jorens, 1999:14). In the course of interviews conducted for this project, workers’ compensation agency staff in most though not every jurisdiction acknowledged that multiple-job holding presented a problem although opinion varied as to how serious it was. From the agency perspective there was the problem of linking any claim to the specific employer responsible (presuming no complexities resulting where degenerative injuries were caused by work with several employers or there were exacerbating effects). There was also the question of factors that might induce a worker to claim against an employer whose workplace was not the principal cause of the injury but for whom a workers’ compensation claim was likely to prove easier and more rewarding (ie normally the job entailing more regular work and pay). Of course one effect of such claim ‘transfers’ would be on the accuracy of workers’ compensation claims data. The notable exception was South Australia, where agency representatives expressed the view that multiple-jobholding was recognized within the legislation of that state and had not proved to be a problem, although determining the redemption could become ‘clouded’ when more than one employer was involved. When asked about the overlay of fatigue-related problems referred to by number of other jurisdictions they stated that such a case had never come before them. With regard to exposure to hazardous substances, problems for contingent workers with complex job histories will be manifestly greater than for traumatic injury given the difficulties workers’ compensation systems already have in addressing occupational disease (van Warden et al, 1997; Kerr et al 1996. See also recent US initiatives in relation to workers employed by 186 --
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contractors in nuclear weapon production). Given the proliferation of potentially hazardous substances in industrialised societies, the potential significance of this issue should not be under-estimated. Indeed, even job changes where the worker remains in the same industry, the hazardous substance is well-known and the worker’s disease/illness can be clearly ascribed to exposure to that substance at work – all by no means typical of work-related disease - become problematic in the sense of identifying the specific employer responsible for the exposure. Indeed, this scenario was recently played out in the United Kingdom. In late 2001 a Court of Appeal ruled that workers suffering mesothelioma due to exposure to asbestos and who worked for more than one employer could not claim compensation as they were unable to prove which company is at fault (ie the source of the ‘fatal fibre’). This decision was overturned in the House of Lords (see Chapter 10) but it would premature to see this as putting an end to the issue as there were several special features about this case. Unlike most other diseases, the only known cause of mesothelioma (an invariably fatal cancer of the lung lining) is exposure to asbestos. In more typical situations where associations are more ambiguous (due to multiple potential causes and exposure points as well as the potential for combinant effects of exposure to multiple hazardous substances) the problems that arise from job changes are magnified. Even the delayed onset of a work-related disease where workers are changing jobs more regularly may present a problem (again see Chapter 10 for details). Another problem relates to equity in claims administration. Roberts and Young (1997) have argued that notions of procedural fairness are important to the operation of workers’ compensation. For workers, such notions are affected by their perceived opportunity to influence outcomes, consistency in decision-making and the degree to which inexperience or uncertainty makes the process confusing or intimidating. Procedural fairness is more difficult to achieve in relation to contingent workers because, quite apart from bureaucratic insensitivity, there is an increased potential for discriminatory practices. Workers on shortterm contracts are in a more vulnerable position in terms of having their claims disputed or having future employment prospects affected by a costly claim due to employers making increasing use of compensation history as a screening device (Morrison et al, 1995:6). There is a dearth of research on this issue. However, there is evidence that some groups of workers concentrated in contingent jobs, notably women, Aborigines, immigrants and non-union workers, are more likely to have claims contested, rejected or receive a lower average pay-out (See Alcorso, 1989:58-62; Morrison et al, 1993; Hemerik and Cena, 1993; and Hirsch et al, 1997). For example, in a 1995 survey of 257 Indigenous Australians (Aborigines and Torres Strait Islanders), virtually all of who occupied precarious jobs, found that over 60% of those injured had received no form of injury benefit (Mayhew and Vickerman, 1996). The following responses were typical: ‘The employer’s attitude was that it was my problem and I believe this was because I was employed on contract work’ (indigenous worker no.68).‘Lack of union support or information regarding workers’ rights and entitlements. Lack of Aboriginal and Torres Strait Islander support network. Leads to feeling of being outcast and alone’ (indigenous worker no. 130); and ‘I did not realise that I could get support for my injury because no one had ever talked about it at work’ (indigenous worker no.180).
Although indigenous workers may represent an extreme case it is more than likely that these problems will become more extensive in tandem with the growth of the contingent workforce. Changes to entitlements and coverage (formal and informal) may even magnify these effects. Similar problems relating to immigrants and other vulnerable groups have been identified in countries such as the USA (see Dembe, 2001: 28-29). 187 --
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Another serious issue of equity in terms of claims administration is whether eligible workers get to make a claim in the first place. This chapter has already discussed major information gaps and other impediments in relation to some categories of contingent workers making claims (and providing survey evidence to substantiate this). It is not intended to make extensive points here but a brief reference to the case of clothing outworkers is worth mentioning to highlight these problems. Predominantly composed of recently arrived immigrant women working at the bottom of an elaborate multi-tiered subcontracting chain, clothing outworkers are, where deemed workers, entitled to make workers’ compensation claims in a number of if not most jurisdictions. However, their ability to do so in practice has been severely circumscribed almost to the point of complete exclusion by a mixture of ignorance, intimidation/fear of job loss, the deliberate manipulation of their employment status to blur if not exclude this entitlement. Our own research (Mayhew and Quinlan, 1999) indicated that claims were virtually unknown by workers’ we surveyed in New South Wales and Victoria. Interviews conducted with regulators for the purpose of this project reinforced this interpretation. Regulators described the industry as one marked by concealment. For example, workers compensation staff in South Australia stated they were aware of claims being made by outworkers in that state but equally had no doubt they were exceptional. Specific NSW initiatives to address this problem are discussed later in this report. Clothing outworkers may be viewed as an extreme case. However, in the course of interviews regulatory officers referred to other groups where accessing entitlements was seen to be difficult and supporting the ABS and other survey evidence discussed at the beginning of this chapter. For example, one regulatory officer referred to the problems with regard to healthcare workers: …given my background in that industry, they're not so much not aware of their rights to claim or their rights to workers' compensation. They're certainly very afraid of claiming "because I wont get any more work" and that's a real strong culture.
When asked to nominate other industries another officer replied: Manufacturing for sure, particularly where there's bonuses attached to production, piecework manufacturing. There's still a view held that "I did something stupid so I'm not entitled to claim" and if they know they're permanent, some part-timers don’t even realise the fact that that they're part-time doesn’t mean they can't claim. You've actually got an issue of general education I think when it comes to permanent parttimers.
5.2.8 Access To/Use of Rehabilitation and Return to Work Over recent years there has been a growing recognition internationally that the growth of contingent work also can present difficulties for the provision of return-to-work and rehabilitation services, an area given increased attention in many countries during the 1980s (see for example Plumb and Cowell 1998:268). Self-employed, temporary, home-based or leased workers and those in small business may find it more difficult to utilise these services (perhaps contributing to the lower compensation costs of small business (Time for Business, 1996:xviii). Indeed, there is a small but growing body of international evidence on this, such as recent study of injured homecare workers in Sweden (Dellve et al, 2002:55-64) that found only one third received occupational rehabilitation. Even in large organisations employment security is important to the rehabilitation process. Researching workers’ compensation in Australia, Kevin Purse (1998b) has argued that employment security provisions in relation to compensation claimants not only protect worker rights but also control scheme costs by 188 --
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encouraging a more proactive approach to return to work/rehabilitation. The growth of contingent work arrangements limits the application of these provisions and can even be used to question their retention. During the course of interviews undertaken for this project workers’ compensation agency staff in virtually every jurisdiction acknowledged the growth of contingent work arrangements had raised concerns in relation to the effectiveness of return to work processes. Agency staff stated that the contingent work arrangements were conducive to an attitude amongst employers that labour was purchased as and when it was needed with no long term social obligations and they also saw no reason to employ anything less than ‘pristine’ (ie not previously injured) workers. It was noted that contingent workers were equally cognizant that any claim for compensation might damage their future prospects in that industry. In short, the growth of labour hire, temporary employment and the like had made the task of achieving a return to work more difficult. Some agency managers/policy officers candidly admitted that there was a serious disjunction between existing structures and practices (that presumed an ongoing employment relationship) and changes to the workforce. Others pointed to what they saw as both strengths and weaknesses in their jurisdiction’s scheme in terms of addressing this. For example, a senior manager for South Australia expressed the view: On one side we are fortunate, on another side we are unfortunate. The unfortunate side for South Australia is that we have a long term scheme so traditionally there’s a high likelihood that if you’ve got a long term injury or you can’t go back to work with the same employment, or there’s difficulty getting back to work, there’s a high likelihood you’re actually staying (in the scheme) for a long time. And so we always struggle and always focused on more and different initiatives to actually get better return to work or outcomes because our legislation is pretty generous in that respect. The way we’re lucky is that our legislation also has a pretty solid emphasis on the employer finding return-to-work. So there’s a legislative expectation that, where possible, employers do find (work) and we have the ability to fine (them) if they’re not prepared to take the worker back, but it has to be reasonable.
It was noted that over the last few years the agency had been relying on decisions that effectively meant a company with a certain level of remuneration could expect an supplementary levy if it refused to return a worker to some post in the organisation. However, as readily conceded this only applied to larger firms, leaving the situation with regard to small business essentially unresolved. In yet other jurisdictions agency managers emphasized that they sought to implement their standard procedures irrespective of the employment status of the worker concerned. Nevertheless, even they (and a range of other parties) raised specific concerns about difficulties meeting the new challenges. Agency staff in all jurisdictions made the point that labour hire was especially problematic with regard to return to work. Encapsulating these views the South Australian Labour Hire Task Force Report (WorkCover Corporation of South Australia, 2000:4) stated: Both the Corporation and the Labour Hire Industry have expressed concern regarding poor return to work outcomes for labour hire workers. This has been directly related to the nature of the labour hire industry, which limits the Labour Hire Employer’s ability to provide alternative return to work opportunities.
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Scheme statistics have indicated that claims with a return to work goal with a different employer are more expensive and have poorer outcomes than claims with a return to work goal with the same employer. As this is a characteristic of the labour hire industry experience, the working party has recommended strategies which focus on “job detached workers’.
As a regulator in another jurisdiction observed even at the administrative level things became more complex because their rehabilitation coordinators had to deal with three parties (the injured worker, the labour hire firm and the host employer), each with their own set of issues and interests, rather than dealing with two parties (ie employer and worker) as in the conventional employment situation. The complexity is even more profound when the durability of return-to-work arrangements is considered. Representatives of workers’ compensation agencies in several jurisdictions (such as Queensland) noted that labour hire/leasing firms had expressed the view they did not have the capacity to offer rehabilitation or alternative return to work programs because they do not have a permanent worksite. Agency representatives found it difficult to accept this view, arguing that labour hire firms should use their list of host employers as sites for rehabilitation and that the schemes of at least some jurisdictions had incentives for this, including a graduated return to work under benefits at no risk to the employer in terms of second injuries or aggravation. Union efforts to combat these problems, included pressing governments to make labour hire firms responsible for the rehabilitation of workers they lease out (Labor Council of NSW, 1997:9). For their part, labour hire firm representatives interviewed pointed to the reluctance of clients to take on workers undergoing rehabilitation (irrespective of incentives), preferring ablebodied workers capable of performing a set task immediately. It was suggested that while labour hire firms were able, on occasion, to build a relationship with a particular employer permitting some rehabilitation attempts to ‘push’ injured workers on clients more generally would place them at a competitive advantage viz a viz operators more concerned to meet the client’s requirements. Several workers’ compensation agency staff acknowledged this problem. One remarked: There are some labour hire companies that have a responsibility for the worker. They (the worker) get injured on the job and the host doesn’t want them. And they can’t even give them out for free to another host and there is evidence that those people sometimes end up working for charities as a donation almost.
In a similar vein, an officer from another jurisdiction stated: Amongst the larger self-insurers we’ve had incidents where labour hire people have been injured at a self-insurer’s premises and when they’ve been treated and ready for graduated return to work the self-insurer says “no we don’t want a cripple, we want a whole-bodied person..” And I’ve gone out to those self-insurers and said “you’ve got social obligations here that I am not going to let you escape from.”
As with a number of other areas, the particular jurisdictional coverage of ComCare raised a number of unique issues that had been recognized by the agency. As one officer remarked: The issue for workers’ compensation that’s often come to us is not so much even in the benefits structure because a lot of what we’ve dealt with, for instance where you outsourced HR or where you’ve brought in contract employees from labour hire firms,
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recruitment firms…have been in say the ACT where most of their work is with the Commonwealth even though ACT WorkCover cover them is return to work because your returning to work across a different insurer from that of the employer for which you might wish to return them to work ,that is the Commonwealth (ie ComCare). So that’s one issue where we have identified potential issues there.
Workers’ compensation agency representatives readily acknowledged that it was also more difficult to achieve a return to work or to get rehabilitation programs for directly hired (ie non-leased) temporary workers. While it might be expected that these problems would be most severe where the temporary workers were employed on an intermittent or’ one-off’ basis by small to medium-sized private employers at least one agency indicated that getting a return to work had been ‘hard’ even with regard to casual teachers employed on a semi-regular or even regular basis by large state or religious education bodies. In other words, the problem was seen to exist even in what might be viewed as the most ideal situation. This is not to say the situation was not worse in other situations. However, a number of agencies conceded that their knowledge of these problems was limited. For example, one agency indicated that it became aware of these problems ‘second hand’ through their labour regulation unit after it discovered workers had been denied industrial entitlements (such as leave entitlements) when they were dismissed following a workers’ compensation claim, or when they had their compensation claim denied by a private insurer. For their part, a number of employers interviewed pointed to instances where they had (directly) hired a temporary worker who following an injury became a long-term financial responsibility under workers’ compensation, with several alleging that, on occasion, the extended employment resulting from the claim was even used to mount an unfair dismissal claim. Workers’ compensation agency staff in a number of jurisdictions agreed that this problem existed although it is fair to say they saw problems of temporary workers accessing worker’s compensation and rehabilitation as a far more extensive problem. For their part, unions argued that temporary workers are less likely to be aware of their entitlements, more reluctant to make a claim for fear of jeopardizing future employment prospects, and more likely to have their claim challenged. There is evidence to support some of the union claims (see above) and, as already noted, government agency representatives also indicated a belief that temporary workers were less likely to make a compensation claim. There is also no reason to doubt the veracity of employer complaints although the real issue in terms of policy responses is the relative size of both sets problems and a recognition that the move to more flexible work arrangements has introduced some less than optimal incentives for both workers and employers in relation to compensation/rehabilitation. Another widely acknowledged problem area in relation to the provision of return-to-work was with regard to small business. Staff in virtually every jurisdiction indicated that a return to work was difficult to achieve with small business where a worker suffered an incapacity requiring a change of tasks or even occupation because these firms simply lacked the resources and flexibility to adapt their operations or find a suitable position. Another way of putting this is that the demand for post-rehabilitation jobs exceeded supply of appropriate positions. A number of agencies felt the lengthier claim arising from this resulted in an additional cost burden on the employer might act as an incentive for them to amend their practices. At the same time it was recognized such cost incentives only operated when they were recognized and were also predicated on the presumption a claim would be lodged and be accepted (which 191 --
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a number acknowledged was less likely in the case of temporary workers). Ultimately, there is little if any evidence that the additional compensation costs of failing to provide effective return-to-work regimes has altered the behaviour of the majority of employers using temporary workers. This effect presumes temporary workers are as liable to make a claim when injured as permanent workers – something that there is reason to doubt. For small employers, the cost incentives are likely to prove irrelevant unless they have ways of redeploying workers. At a more general level, a number of the agencies interviewed expressed reservations about their records in relation to return to work status or outcome of a claim, making it more difficult for them to assess the effectiveness of particular incentives or disincentives in this area. The above debates highlights in no small measure the dilemmas and ‘hidden’ problems that a move to a more transferable and disposable workforce entails. The notion of flexibility also too often means dispensability without reference to the broader social obligations both explicit and implicit in more permanent and ‘rigid’ employment arrangements. Short-term ‘mutual’ obligations leave the burden on the state to fill the inevitable gaps. Further, the measures discussed do not address self-employed workers, home-based workers, workers in small business or in workplaces being downsized. As a number of agencies readily conceded, return to work is a major challenge for them even when issues of contingent employment are not involved. As with general duty provisions in OHS legislation, it was indicated that problematic employer knowledge of and compliance with their legislative responsibilities to provide work to injured workers was not uncommon. For example, one agency cited the case of a debriefing session with an employer where the former sought to uncover the degree of ‘tolerance’ the agency adopted in terms of enforcement. Hence, return to work for contingent workers may be seen as the most challenging of an already difficult problem. It is therefore hard to see how governments can easily or comprehensively reconcile an emphasis on return to work/rehabilitation in the context of an increasingly insecure workforce. Nonetheless, some innovative measures that attempt to do this (however, partially) are discussed in Chapter 11. 5.2.9 Workers’ Compensation Agency Responses and Cost-Shifting/Social Security Problems Overall, workers’ compensation agencies have been slow to recognise let alone address these problems. Further, any efforts need to be balanced against efficiency/cost-cutting reforms in a number of countries that have reduced entitlements (via claim thresholds, time limits, injury/disease recognition, benefits etc), limit job-security protection, or increase cost shifting from business and unhealthy forms of system competition (Walters, 1996:304; Weissman, 1997:22-6; Witmer, 1997; Purse, 1997,1998a&b; and eironline March 1998,). These changes appear to reverse a long-term trend to make compensation systems more comprehensive and generous. In Sweden, for example, changes introduced in 1992-3 required employers to pay the first 14 days in relation to employee sickness and tightened the definition of work-related disease (this also had flow-on effects on OHS statistics). Apart from direct restrictions on claims, there is evidence (see Hirsch, 1997) that the generosity of benefits (or the degree to which workers must ‘share’ costs) affects the level of claims as well as the use of medical care (see Durban, 1997). The adverse effects of government policies just mentioned may be reinforced by changes to employer and private insurer practices such as the increased use of managed-care models pioneered in the USA. Managed-care has been seen to promote more integrated and effective OHS programs (see Nikolaj and Boon, 1998) but incentives to reduce costs do not automatically translate into injury and disease reduction because there are other ways of 192 --
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reducing costs. Himmelstein and Rest (1996:23) argue that the application of managed care practices to workers’ compensation has important policy-implications because, unlike other areas of health care, doctors are involved in adjudicating compensability and the return to work. Pressures to reduce costs create potential conflict of interests that could affect decisions on eligibility, benefits and the timing of return to work. Dembe (1998:200) points to fears amongst workers, unions and public health advocates that the introduction of managed care is part of a ‘broader employer-driven campaign to erode benefits, tighten eligibility criteria and weaken employee’s control over health care and compensation issues.’ In other words, managed care may be an instrument by which employers externalise compensation costs and reduce worker discretion over one aspect of their employment conditions (for a more general critique of managed care see Herzlinger, 1997). Dembe (1998) argues these effects may be mitigated via government oversight, involving workers in scheme design and provider selection and requiring accountability in contract provisions. However, the organisational controls he identifies are voluntary and could not be introduced by union pressure alone. There is little evidence that appropriate regulatory controls are being devised and effectively implementing such controls is liable to be expensive. Again, practices like managed care are liable to disadvantage contingent workers disproportionately because they are in a weaker position to make claims or dispute unfavourable rulings. Irrespective of any strategic decision to drive down compensation costs via managed care, contingent workers may also suffer where firms employing large numbers like labour hire agencies simply adopt a more aggressive approach to claims made by this component of their workforce (Labar, 1997). Finally, the growth of precarious employment is liable to exacerbate hidden industrysubsidisation or cost shifting in relation to occupational injury and illness already found in many industrialised societies (Purse, 1998a). Those costs not met by employers flow on – often in a gender-biased fashion – to the public health and social security systems, the taxpayer and the families of injured workers. In the USA a 1991 study found that only 60% of those reimbursed for workplace injury received workers’ compensation (NIOSH, 1996:9). In Australia the Industry Commission (1995:159-73) found there was a large net shifting of costs from employers and the workers’ compensation system of most jurisdictions onto the community (via Medicare, the social security system, the families of injured workers etc). The report (1995:392-3) estimated employers bore around 30% of total costs of occupational illness (mainly workers’ compensation premiums), injured workers and their families bore around 30%, and taxpayers around 40% - a breakdown similar to other industrialised countries such as such as Norway. In the case of serious injury, the estimated cost burden on workers and the community was even greater (Industry Commission, 1995:102). Similarly, a study cross-matching workers’ compensation, hospital treatment and welfare recipient records in British Columbia (Hertzman et al 1999) revealed that between 1991 and 1997 23% of workers’ compensation clients became clients of the welfare system and were the third largest group of claimants after single mothers and the unemployed. A study on Australian in the 1980s came up with an almost identical figure of 23.6% (Stewart and Doyle, 1988:8) and staff at a number of workers’ compensation agencies interviewed for this project readily acknowledged the ongoing importance of the transfer of long-term workers’ compensation claimants to social security. The major exception was South Australia where agency staff referred to the Industry Commission’s finding that it was the only jurisdiction where a net shifting of costs to the Commonwealth did not occur. Despite the vigorous debate about its cost burden on employers, workers’ compensation represents only a fraction of the economic costs of occupational injury and disease (NIOSH, 1996:9).
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Another potential form of cost shifting has received little attention, namely the capacity of injured workers in road transport to make claims under compulsory third-party automotive insurance rather than through workers’ compensation. In the long haul trucking industry the trend away from employee to self-employed drivers has effectively reduced the coverage of workers’ compensation (Quinlan, 2001). Whether this has brought more pressure to bear on compulsory third party (CTP) insurance is unclear since the unlike workers’ compensation this is a fault-based system. In general, the option would only be available where injuries occurred as a result of multiple-vehicle crash and the truck driver could show the other driver was at fault. The Motor Accidents Authority of NSW was of the view that there had been no cost transfer although it also noted that as workers’ compensation and CTP rules varied widely between different Australian jurisdictions forum-shopping and cost-shifting could occur. The problem may affect other areas of road transport. In Tasmania, for example, during interviews regulatory staff made reference to a concern on the part of the Motor Accidents Insurance Board (which administers the compulsory third party auto insurance scheme) about the number the growing number of claims from taxi drivers that resulted from them not having cover under workers’ compensation. As in trucking, investigations in the late 1990s revealed a growth of subcontracting (multiple sub-letting of a taxi to maximize its road time) and associated litigation as to whether drivers were employees for the purpose of labour standards (re payment of money, unfair dismissal. See for example, Grandovec v Burdon, 1998), taxation (Australian Tax Office v numerous taxi companies, Federal Court of Australia Case No.840) or workers’ compensation (Couch v Bannerman, 1998). The latter case had arisen despite a provision (s3[2]) in the Workers’ Rehabilitation and Compensation Act 1985 that specifically deemed taxi drivers working under a contract of bailment as being employed by the taxi owner for the purpose of the Act. Anecdotal evidence from industry operators as well as a survey conducted by the Taxi Industry Association of Tasmania indicated that between 20 and 30% of taxis were not covered by workers’ compensation insurance (and subletting of work, including to persons in receipt of social security payments, complicates the eligibility/claims behaviour of even those taxis with coverage). It should be noted in passing that, unlike NSW and a number of other jurisdictions, taxi drivers are not included in the deeming provisions of workers’ compensation legislation in Queensland, something that was seen to lead to a number of problems relating to coverage and data collection by a recent government inquiry. The Queensland Department of Industrial Relations and Queensland Transport Interdepartmental Review Committee (2001: 7) recommended the issue of worker cover be examined to ensure drivers had cover commensurate to that provided by WorkCover. It should be noted that the possibility of cost shifting claims from workers’ compensation to compulsory third party (CTP) motor accident insurance is not confined to road transport workers but can include other categories of workers. Elsewhere in the report reference is made to a Victorian case where a worker for a labour leasing firm that had configured itself as a trust secured a settlement for a vehicle incident via third party rather workers’ compensation even though it was a work-related incident. The Motor Accidents Authority of NSW might also be interested to learn that a Retail Industry Reference Group (2001a: 13) Return to Work Kit for Employers provides the following advice in relation to workers injured while traveling to or from or during work: Encourage the worker to make a claim with the CTP insurer. Your workers compensation insurer may be able to “recover” claim costs from the CTP insurer if the other driver was at fault.
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Cost shifting results from several factors including formal exclusions/restrictions (in terms of categories of workers, claim type, benefits and payment levels), limited recognition of occupational disease, uncertainty about claims procedures and under-utilisation due to employment insecurity/fear of victimisation amongst particular groups of workers. Formally excluded categories include contingent workers like independent contractors - many in dangerous industries like construction, trucking and agriculture - who often fail to take out adequate private insurance (see Egger, 1997:8; WCB of BC 1997:17; Bill 99 Statutes of Ontario, 1997 s11; and Mayhew, 1999). In at least some industrialised countries the long term injured eventually move off workers’ compensation benefits onto social security although women may be denied this residual support because they are employed part-time or are not deemed the primary breadwinner (Stewart and Doyle, 1988). The already mentioned underutilisation of workers’ compensation by, especially amongst vulnerable groups like indigenous workers and immigrants, also results in an increased burden on social security (Stewart, 1991:27-9 and 1994). In combination, cuts to workers’ compensation entitlements and the growth of contingent work will cause a further cost shifting away from employers to workers. This, in turn, will create a series of labour and product market distortions. Although the impact of compensation costs on employer behaviour has been the subject of considerable ongoing debate (see for example Boden, 1995 and Durban, 1997) it is difficult to see how increased cost shifting will enhance macroeconomic efficiency and injury prevention. Of course, the ability of workers’ to transfer from workers’ compensation to disability pensions or other forms of social security will depend on regulatory arrangements specific to each country. For example, while workers’ compensation and social security are quite separately administered welfare regimes in countries like the USA, Australia and Canada in a number of EU countries workers’ compensation has been integrated into the national social security system (see Reinhard and Jorens, 1999). This integration would seem to eliminate economic incentives driving cross-subsidisation where separate systems operate. However, it is important to note this countervailing effect may only be partial, at best, because in almost all of these countries payment levels for work-related injury exceed those of other categories of claimant. A recent report on temporary agency work in the EU (Storrie, 2002: 3) identified social security as the perhaps the most important issue it failed to address. In most advanced industrialised countries the publicly funded health care system picks up a substantial number of work-related injuries and diseases that fall through gaps in workers’ compensation. Despite claims that cost shifting also occurs in the opposite direction (ie from Medicare to workers’ compensation) available evidence for Australia indicates that the former far outweighs the latter (see Industry Commission, 1994:160-5). This pattern probably applies to other industrialised countries although the extent will depend on institutional arrangements. The situation is more complex in the USA as the only advanced industrialised country without a comprehensive public health insurance system. Injured workers in the USA do not have ready access to publicly funded health care, making this type of cost shifting more difficult. In the absence of a comprehensive public health insurance system employers have incorporated health cover into employment conditions with these schemes usually being administered by a health management organisation (HMO). There have been suggestions that one consequence of this structure was to encourage a significant shifting of health care costs to the workers’ compensation system (see Ducatman, 1986). However, later studies have questioned this contention (see Ducatman, 1991; and Zwerling et al, 1991). 195 --
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Further, the policy question here is not simply which regime meets the demands but whether either meets the needs of injured workers? Research has pointed to circumstances where workers are left without either form of cover (see Ramsey and Rosenstock, 1994). This appears to be a significant problem for contingent workers. Reliance on voluntary health insurance in the USA has resulted in significant gaps in coverage that are especially pronounced in relation to low-income workers, immigrants (including illegal immigrants), part-timers, those in small business and other contingent workers (Chernew et al, 1997; Bureau of Labor Statistics, 1997; and Rhine and Ng, 1998). For example, a study of Carrasquillo et al (2000) found that immigrants were must less likely to received employersponsored health cover (44% had no health cover whatsoever) and their concentration in low paid (often insecure) jobs, including labourers and agricultural workers (and for some illegal status) was a critical factor in this. Those immigrants holding part-time jobs were even less likely to have cover than their full-time counterparts (Carrasquillo et al 2000:920). Further, Hirschberg (2002:107-124) has recently argued that small business (which employed 49 million workers in 1991) represents the biggest single gap in the provision of employersponsored health insurance in the USA. Small business has resisted legislative efforts to mandate health insurance, arguing this would threaten its continue its role as the major source of job growth (interestingly, Hirschberg specifically refutes the claim that small business creates most jobs – a claim also repeatedly made in Australia. Hirschberg, 2002:107). The growth of the contingent workforce has undermined an already partial form of protection, especially in a context where employers increasingly require an employee contribution (the growing contingent workforce has also affected access to employer-based pension benefits). Using US government statistics, Nollen (1996:573) found that, in comparison to full-time workers, a significantly lower proportion of temporary workers had formal entitlements to paid vacation, paid holidays, life insurance and health insurance (see also Bureau of Labor Statistics, 1997, Table 9). The gap was even wider when the proportion actually receiving such benefits was calculated (to say nothing of differences in the quality of benefits. See also Chernew et al, 1997). More recent research confirms this picture of contingent workers having less access to health insurance and other benefits (see Glasgow et al 2002) as well as identifying new and disturbing trends. A study (Rowland and Garfield, 2002) based on the 2001 Current Population Survey found that only 40% of low-income workers (with a disproportionate number of contingent workers) had employer-funded health insurance and 39% had no cover whatsoever (11% had Medicaid and 10% had some other form of health cover). For workers overall the figures were 74% employer-funded insurance and 16% uninsured while for high income earners 88% had employer-funded health cover and only 7% were uninsured. During the 1990s the tight labour market appears to have helped arrest the growth of uninsured workers linked to contingent work because some employers had to offer health insurance cover to attract and retain workers. However, the recent recession and rise in unemployment is likely to reverse this, with recently employed workers coming off welfare being particularly likely to experience job loss (Rowland and Garfield, 2002). Rowland and Garfield (2002) calculated that for every percentage point increase in the unemployment rate the number of uninsured US workers grew by 1.2 million. They argued that other changes were likely to reduce both the level of cover or the cost burden on workers who retained their jobs. This included the employers cutting back on employee hours (which might make them ineligible as part time workers), restricting (or even totally abolishing) coverage for their workforce or passing on a larger share of costs to their workers (especially in the context of rising healthcare insurance premiums). 196 --
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The absence of any sort of health cover is liable to have profound long-term health effects. A survey by the Centre for Disease Control (1998) found that persons without health care coverage were more likely to experience poor health and were at greater risk of chronic disease. While Australia has a universal health insurance system the problems being experienced in the USA are worth identifying for two reasons. First, the US example highlights the importance of universal health insurance as a safety net for vulnerable workers who suffer injury or illness arising from their work. Further, even in Australia it cannot be presumed that all seriously injured workers denied access to workers’ compensation and lacking private health insurance (either work-related or general) will utilize Medicare. Our own research provides evidence of this especially in relation to clothing outworkers – the vast majority of whom are recently arrived immigrants, some illegal (Mayhew and Quinlan, 1999) where a not insignificant number resorted to some other form of treatment (including Chinese herbal medicine in the case of outworkers) or (as in the case of other homeworkers and some building and transport workers) obtain no treatment whatsoever. For some, failure to seek treatment will result a gradual deterioration into chronic injury (Mayhew and Quinlan, 1997). Second, the US experience provides an indication of what might occur if there was move to make Medicare more of residual scheme viz a viz private health insurance. In Australia few if any employers provide private health insurance to their employees and low paid workers, many of them holding contingent jobs, would be amongst those least able to afford private health cover. During the course of interviews with regulators in one jurisdiction reference was made to provisions for personal accident insurance in enterprise bargaining agreements covering the construction industry. This was seen to have some effect on claim shifting but logistical constraints on the project prevented this practice and its effects from being explored in any detail. An alternative to workers’ compensation for those with long-term injuries is the social security system. In a number of countries, including the USA, Netherlands, Australia and Sweden, there has been a substantial growth in the number of working age people in receipt of disability pensions/benefits or sickness allowances (ILO, 1998b). The contribution of labour market restructuring to this growth (by widening gaps in workers’ compensation coverage, undermining return-to-work schemes and discouraging the engagement of disabled workers) is unknown. However, fragmentary evidence is emerging. For example, a recent Swedish study of homecare workers on disability pensions due to musculoskeletal disorders (Dellve, et al, 2002) found that the majority considered their disorder to be caused by work but only one third had the disorder approved as occupational. Further, predictions of this connection were made more than a decade ago (Stewart and Doyle, 1988:19-25) by the only large Australian study we are aware of to consider workers’ compensation/social security links. The issue warrants serious investigation. There are already grounds for suspecting precarious employment is weakening workers’ compensation/rehabilitation regimes as a mechanism for internalising the costs of occupational injuries and disease (already significantly underreported) to employers and as a relatively comprehensive social justice safety net for injured workers and their families. 5.3 Conclusion The findings in relation to coverage, claims behaviour and entitlements raise a number of significant policy issues. First, how should workers’ compensation agencies and government 197 --
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policymakers respond to the decline in coverage due to the growth of precarious employment? Second, how should agencies respond to the particularly problematic knowledge of entitlements amongst some groups of contingent workers. The evidence of our earlier surveys as well as information collected in the course of this project suggest that there is a strong case for targeting information at groups like young temporary workers in fast food and retailing or recent NESB immigrants, especially where an absence of unions means that workers have few alternative sources of information. Employers should also be encouraged to provide information with possible incentives including making this a requirement of their OHSMS. Third, there is also a question as to the assistance provided to contingent workers wanting to make a claim. At present, there is little evidence that workers’ compensation agencies are giving attention to this issue though the solution may well include remedies beyond what these bodies can provide (see, for instance, the discussion of Canadian initiatives in a later chapter). Agencies in most jurisdictions (aside from NSW) neither collect nor report breakdowns of claims behaviour by employment status. For some categories, such as self-employed subcontractors, there is arguably insufficient coverage to warrant such breakdowns. However, for groups like temporary workers, who are covered, there is justification for at least examining the issue since available US evidence indicates significant disparities in the incidence and cost of claims between permanent and contingent workers. When the possibility of collecting such data was raised agencies in several jurisdictions pointed to the limitations in the amount of information that could be obtained from claimants and employers (ie in terms of form overload/reliable responses). This is a valid point but the experience of Washington state and Minnesota in the USA indicates that it is by no means insurmountable and if the differences in claims experience are similar to those uncovered in these states then a strong case can be made for obtaining such breakdowns (or at least undertaking a limited duration project to assess this). There is a broader issue about the reliability of current coding and recording practices in Australia that may reinforce the case for a reconsideration of current recording and reporting practices. During interviews staff in at least half the jurisdictions visited referred to what they saw as serious problems in relation to the coding and recording of claims data. Allan Clayton from Monash University, who has particular expertise in the area, supported this interpretation. In addition to this there are the substantial number of work-related injuries and diseases that do not result in a workers’ compensation claims and are, therefore, not reported at all. This chapter presented evidence both attesting to the importance of this problem and that employment status/flexible work arrangements are a significant and growing contributor to this problem. In virtually every jurisdiction visited agency staff indicated an awareness of these two sets of problems and also expressed skepticism as to value of the National Data Set as an acceptable if partial indicator of patterns of workplace injury and disease. What is rather disturbing in this regard is the ongoing reliance of workers’ compensation data (including the National Data Set) for comparative performance monitoring (See Workplace Relations Ministers’ Council, 1997) and with barely a mention of these problems. Examining should a necessary first step to better adapting data sets to record information on contingent workers although not a reason for abandoning the latter. Rather, workers’ compensation data (hopefully enhanced to better meet the problems just mentioned) needs to be used in conjunction with other data sources, such as hospital admission/coronial data and systematic periodic large workforce surveys like that conducted by the EFILWC in the European Union.
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In terms of worker achieving their entitlements there are also grounds for exploring the experience of temporary workers and other potentially vulnerable groups like mobile workers, recent immigrants, backpackers and the like. Several ABS surveys discussed in this chapter along with research studies provide evidence at least sufficient to indicate that this represents a potentially serious gap in the existing system viz a viz worker entitlements. As final point it should be noted that as with prevention (see Chapter 4), a number of industries or areas of activity were repeatedly identified by regulators, inquiries and other evidence as especially problematic in relation to workers’ compensation, namely construction, clothing outwork, contracting cleaning, areas of road transport (taxis and long haul trucking) and labour hire. That the same industries should be the source of serious problems of compliance in both prevention and workers’ compensation indicates the needed for specific attention or targeted strategies, as has already been initiated or proposed in relation to several.
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Chapter 6 The OHS and Worker’s Compensation Issues Associated with Changing Work Arrangement: Employer, Worker/Union and OHS Professional Perspectives 6.1 Introduction The object of this project was not simply to obtain information from regulatory agencies but also to speak to employer and worker representatives about their perceptions of the issues raised by changing work arrangements as well as initiatives undertaken with regard to this. This chapter examines the first aspect while later chapters consider remedial measures. As already noted, the project team attended most IRGs to obtain feedback from employers and unions. In addition interviews were conducted with representatives of employer and industry organisations, individual employers and leasing agencies, union peak councils and individual unions (logistical constraints precluded interviews with individual workers). A number of individuals from these organisations also provided documentary information and we also made use of other source material. Beyond these groups there is some evidence that changing work arrangements can affect the activities of OHS professional providing occupational health services. No formal interviews were conducted with OHS professionals during the course of the project but information (including discussions OHS professionals) collected over several years has been incorporated into this chapter. It is worth noting that other professional groups and industry associations have also expressed concerns that the growing use of contingent workers is affecting the safety and quality of work/professional practices. For example, an article in Chemical Health and Safety, organ of the American Chemical Society (see Harding, 1997) warned employers not to skimp on training when introducing temporary (including leased) laboratory workers. For convenience this chapter has been divided into three major sections. The first deals with employers, labour leasing agencies and the like; the second with workers and unions; and the third section looks at the issues from the perspective of OHS professionals. 6.2 Employer and labour-leasing agency perspectives Interviews with employer/industry representatives and visits to Industry Reference Groups were valuable in eliciting employer perspectives on the range of issues being addressed in this report. As with unions, the interviews with employers cannot be regarded as more than a pilot exercise and therefore the observations need to be treated with some caution. They are certainly symptomatic of the views of a number of (generally large) employers and important industry associations but whether they are representative is unknown. Visits to IRGs confirmed that contingent work arrangements are to be found in most industries. Interviews with representatives of a number of employer and industry associations reinforced the impression that use of these arrangements was extensive and had grown over the past decade. At the same time, employment practices varied between and within different industries. Even within IRGs with a relatively narrow set of activities subsectors marked by significant differences could be identified. For example, mining and quarrying could be 200 --
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differentiated into small and large open cut mines, small and large underground mines, metalliferous and non-metalliferous mines, temporary and ‘permanent’ quarries and gem fields. The use of contingent workers might also vary in terms of the stage of development of a mine project (such as a major expansion of the mine, opening of a new mill, shifting from open cut to underground mining etc). Significant variations in employment arrangements (including the use of employees, contractors and self-employed workers) can be identified in relation to these categories. For example, the use of directly hired temporary workers is relatively rare in the mining industry with most reliance being place on contractors and leased workers. Irrespective of these permutations, use of contingent workers is substantial if variable. When asked for the approximate figures for the mines for which they were currently responsible members of the OHS Committee of the NSW Minerals Council cited figures ranging from 30% contractors/leased workers at a particular mine to 67% contractors/leased workers (or double the number of employees) at another mine. Subcontracting and other flexible work arrangements can present challenges for employers in terms of managing OHS. Employers themselves (in IRG meetings and other interviews conducted in the course of the project) raised these issues repeatedly. In some industries, the combination of contractors, temporary and leased workers were seen to create a significant challenge in terms of coordinated OHS management. As noted in chapter 4, employers and contractors spoken to were not unaware of the confusion of legal responsibilities that can arise as a consequence of complex flexible work arrangements such as subcontracting. They were also conscious of the need to send the right messages to industry. A number expressed the view that to improve employer confidence in the system OHS regulators should avoid ‘hits’ for minor offences under prescriptive standards and parties because these were easier to secure. Rather, they believed agencies should carefully target their enforcement activities at the party most responsible and in relation serious systemic offences. Looking at employer and industry attitudes to a number of specific types of work arrangements the following observations can be made. 6.2.1 Outsourcing/Subcontracting Employer representatives interviewed in the course of the project raised a number of problems that they had encountered in relation to outsourcing. A hospital representative referred to the outsourcing of maintenance. The contract gave the contractor exclusive control over the maintenance and movement of equipment – something that was later found to inhibit the ability of the hospital to manage safety on site. In the Utilities IRG it was noted that the mixture of corporatisation, merger/devolution and outsourcing meant that construction and maintenance subcontractors could now work outside an electricity organisation’s traditional boundaries and interstate, requiring more careful and professional supervision using appropriate monitoring tools (perhaps a modified version of Subbypack – see Chapter 7). Other employer representatives referred to the lack of knowledge of their rights and responsibilities under OHS or related legislation on the part of subcontractors. As noted in an earlier chapter, one problem that can be posed by outsourcing is the creation of multi-employer work sites. Multi-employer work sites can pose particular problems where there is no principal contractor or host employer who has an overarching legislative responsibility for OHS but also the commensurate power to ensure that other employers 201 --
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(notably its subcontractors) meet the standards/procedures it requires to safeguard the OHS of all workers on site. However, within at least some government workplaces there is a far more problematic situation. Interviews with ComCare staff confirmed a scenario identified some years earlier where the chief officer of a naval establishment had an overriding responsibility for OHS of all personnel but could only ‘request’ the cooperation of several other government agencies who operated on the site. This may be a comparatively rare situation but it is certainly one that needs to be examined. 6.2.2 Home-based Work, Telework and Telecall Centres Home-based work raises a number of issues for employers. Where the home-based workers are self-employed subcontractors there is a question as to exactly what are the employer’s legislative responsibilities for OHS (and to a lesser extent, workers’ compensation). Where the home-based worker is an employee it is not so much an issue of whether there are legal responsibilities but precisely where these begin and end and what the employer needs to do in order to meet them. A number of large employers interviewed were clearly aware of the need to ensure there was adequate physical layout and equipment (and several mentioned the need for risk assessment and monitoring) for workers employed in the home on a full-time or substantial basis (eg 2-3 days per week). The situation was, however, less clear in relation to their responsibilities for organizing a safe system of work or where staff worked from home on a more limited or sporadic basis. While controlling risks of injury or occupational violence can be challenging in conventional work settings these problems are often magnified when work is carried out in isolation or in the home of clients. For example, our own study of home-based clothing workers found that they confronted a far greater risk of occupational violence (usually from middle-men who administered the work) than women undertaking the same tasks in a factory setting. The fact that home-based workers were predominantly recently arrived immigrants from non-English speaking countries (mainly in south east Asia) compounded their vulnerability. However, these problems even extend to articulate and well-educated groups of workers. A prime example is the burgeoning homecare industry. As already noted a growing body of international research (see Appendix) indicates that homecare workers such as nurses face an elevated risk of injury and occupational violence (at the hands of strangers [where work involved visiting dangerous areas] and family members as well as patients). Some of this research identifies protocols for managing such risks that essentially place the onus of judgement for avoidance behaviour on the worker. During the course of this project we were told of instances where management had not undertaken adequate risk assessment and where protocols were inadequate (in one case a recommendation to limit exposure in extremely high risk situations from supervisors had been rejected by senior management although the National Health Service in the UK has adopted this as part of its protocol). Risk assessment would need to identify issues such as risks of visiting the particular area at prescribed times, the family members normally at home at the time along with the patient and any predisposition to violence on their part). Better addressing these issues is currently under consideration by the NSW Department of Health Taskforce on Occupational Violence. The urgent need for such action has been highlighted by some serious incidents (and subsequent litigation). Such problems are by no means unique to Australia. In Norway, a recent incident involved a young and mentally disturbed male patient who assaulted a female nurse, leaving her with serious injuries including permanent brain damage that will require lifelong assistance. In this case the area health agency was well aware of the potential for violence of 202 --
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this patient but had failed to implement the appropriate protocols and other safeguards. Even with a few extreme cases like this the direct economic costs alone are substantial not to mention the cost to staff morale, the suffering of victims and their families and the likelihood of expensive litigation. As in Australia the cumulative risk of assault and harassment has been seen as contributing to the shortage of nurses. In short, in at least some situations there is an urgent need for management to better address the risks associated with moving work tasks to a home setting. With regard to telecall centres a several employer association representatives indicated the area warranted examination although little was known about the OHS risks at this point of time. As one observed in relation to specialist centres (as distinct from shortduration/campaign-specific or rented space telemarketing operations): They (telecall centres) are interesting situations because in the (names a number of locations) you have these places where you’ve got 60, 100 maybe 200 sometimes people sitting in little corrals on telephones and they really are a breeding ground for some problems if you’re not on top of the situation very quickly. But its still a relatively new area and problems haven’t started to emerge yet…Mind you, the unions have a lot to say about even these specialist telecall centres and kindly call them sweatshops and other things. (But unlike many short term telemarketing operations) they’re purpose built.
Generally, the employer representatives that were spoken to indicated that they knew little in relation to telework (one said he had heard of a few problems anecdotally). It should be noted that interviews indicated regulators and unions shared this lack of knowledge of telework. 6.2.3 Labour Hire/Labour Leasing During discussions held with Industry Reference Groups (IRG) in NSW employer representatives raised a number of problems in relation to labour leasing. For example, at the Health and Community Services IRG reference was made to difficulties in knowing the precise skill mix (and not just in relation to OHS) of staff received and potential problems that could arise when leased staff were transferred from their original task to another after arrival. There was a discussion as what level of risk assessment labour hire agencies should undertake prior to placement and how this should be done. It was noted that not all labour hire agencies appeared to have taken out workers’ compensation, with some acting more as a ‘procurement’ agency rather than a labour leasing firm. A number of employers from a range of industries expressed the view that in their experience, leased workers were more problematic in terms of OHS than temporary workers they directly hired. This leads to the question as to why employers then continue to choose this arrangement? Possible answers include that some firms do change strategies, feel restrained by competitive pressures or convenience while it may also devolve to the groups of managers who decide to make use of leased workers being distinct from (or uninfluenced by) those (generally OHS managers) who must deal with the consequences. In general there was little variation in employer association views across different jurisdictions. One exception was the Tasmanian Chamber of Commerce and Industry, whose representative argued that labour hire had not been especially problematic there were fewer operators in Tasmania than the mainland. According to the spokesperson, these operators were mostly large, offered specialized categories of labour (there were fewer of the general 203 --
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labour hire firms, perhaps reflecting the size, labour force stability and industry mix of Tasmania) and there was therefore less intense competition to encourage dangerous forms of corner cutting on OHS. For their part, representatives of the labour leasing industry were apt to argue that, while many host employers adopted a responsible attitude, some showed little interest or concern for the supervision of leased workers. The logistical difficulty of undertaking risk assessment for every site where workers are dispatched in order to meet their legal obligations – a problem referred to elsewhere in this report – was raised: There are clients in remote areas in Western Australia, clients up in the northwest who say we want someone. It is not economic for me to fly someone up there, check out the health and safety, come back and report say ‘yes its okay to send somebody up’ and then three weeks later then go and check it again. I’m reliant on the host employer to have adequate occupational health and safety provisions and our contractual relationship being one where there’s dual trust that they’re doing the right thing. I am not able to contract out of my obligations but I am also not able to monitor all these different sites for all these different workers. It’s a physical impossibility.
It is also fair to say the industry feels the current legal obligations placed on it are too onerous and that labour hire companies are in a weak situation when they detect problems. An argument we run as an industry, and we would do it at our company as well, is that occupational health and safety is a joint responsibility. We as the direct employer are responsible for induction, teaching them (workers) basic occupational health and safety routines – how to lift things, how to do this, how to do that – but we can’t be responsible for the maintenance of machinery, where people happen to drop pallets in the warehouse, all those other sorts of things. We can walk into a client and say ‘you don’t have any safety guards on that machinery.’ Our options are twofold. Either to sit there and say ‘we’re not doing any work until you put safety guards on that or call out workers out. With so much competition in the marketplace, sure we can pull our workers out but there are plenty of others queued up behind us that will put their workers in there just to get the turnover.
As noted elsewhere in the report the industry has lobbied for a change that would effectively diminish the current legal responsibilities of labour hire firms in relation to OHS but feels it has been effectively ‘out-gunned’ by employer association and unions, neither of whom are seen to be sympathetic to its claim. While some regulators and others saw the use of hold harmless contracts as an attempt by some labour hire firms to gain a competitive edge the industry as a whole, and especially its large operators, are open hostile to them. Those spoken to from the industry saw hold harmless contracts as more as an imposition by host employers and their legal advisers. As one industry member observed: We’ve got three or four clients (who use them). Its not so much the competitive edge, it’s the pressure from the host employer or client who says ‘I will only do business with a company that has a hold harmless contract’ and particularly those companies seem to be the large global American companies who have global policies, who have
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in-house legal teams and who go through a due diligence process with their insurers every year…some guy sits back in Milwaukee, and (in relation to the general duties in Australian OHS legislation) have no idea, have no idea.
Other parties could see the dilemma that labour hire firms and group training companies could face. For example, one (trade) contractor observed: Group Training Companies and labour hire companies face a huge supervision problem. They employ a range of people including Apprentices and despite having OHS management systems in place and documented, they are to the greater extent at the mercy of the host employer to ensure the safety of the workplace. …even when Group Training companies do provide the appropriate training and equipment, the very nature of the employment of their people means that conventional supervisory arrangements may not be sufficient. This is particularly so when the attitude of the host employer is “she’ll be right”. So properly trained and equipped people – especially young people – with the right information, can find themselves in conflict with the (more experienced) people with whom they are working who quite literally say “Don’t worry about all that safety stuff, just get on with the job”.
The real issue here is whether a labour leasing arrangement can always lead to a situation where OHS is effectively managed. In one industry, healthcare, there is some argument that the shortage of nurses has resulted in a preference amongst some to work for an agency rather than be directly hired so as to give them more flexibility in their work arrangements. 6.2.4 Casual, Temporary and Itinerant Workers As noted in an earlier chapter, temporary workers can present additional difficulties in terms of managing OHS in terms of the lack of experience and familiarity with the workplace (exacerbate where labour turnover is high), lack of training, need for additional supervision and the disorganisation that may result in task allocation and communication. For each industry this may take on quite specific characteristics, such a lack of familiarity with patient or client behaviour amongst temporary health or aged care providers, the need to learn site specific protocols about cleaning (such as who deals with a urine spill), the need to learn transport, maintenance and storage routines. There is a growing recognition amongst employers that temporary workers’ lack of experience and job specific knowledge/induction may constitute an OHS risk. Employer representatives repeatedly raised these issues during visits to IRGs and also reinforced the impression that casual employment was significant in industries where this had not previously been the case. For example, reference was made to the large-scale use of temporary workers in the health sector. It was suggested this made induction difficult, especially where induction programs were scheduled on certain days and there was a need to get temporary staff urgently. One result was that supervisors could not be sure adequate induction had occurred. It was also difficult to ensure temporary staff had the necessary skills (for example, had the nurse been trained to use manual handling equipment).
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At the same time, a number of employer association representatives correctly pointed out that the use of temporary or seasonal workers is a longstanding phenomenon in some industries (like meatworks, food processing, fruit picking and the like). In some of these industries casual workers return to seasonal tasks (even with same employer) year after year and in communities with a close-knit and stable population there is not only a body of experience but also powerful informal information networks. An example where these practices have occurred over many years is hop picking in Tasmania. In these circumstances it is plausible that many of the problems just identified do not apply or are less important (although as far as I am aware this has not been tested by research). As one observed. They (transient workers) are an issue. Seasonal work in fruit growing or the rural sector can be a problem but what they tend to do is that they have the same people every year and I can tell you this from first hand experience (names industry) and even the biggest one tend to draw the same people again and again.
The extent of these practices more generally (and whether they are changing over time and in particular industries or vary significantly between different regions and jurisdictions) is unknown. The same organisations also acknowledged that the use of contract and casual workers had spread into industries and areas where such practices had not been common in the past and some, such as tourism, marked by high levels of labour turnover and geographic relocation. One area identified by an employer association spokesperson was nursing homes and aged care. One area that might be an issue is nursing homes. Caring for the aged is a big growth industry here and of course a lot of people who are performing the role of attendants, that is not trained nursing staff but attendants, and some may even be temporary workers or casual workers, there may be issues of occupational health and safety there.
In some industries where temporary employment is widespread a growing number of employers, though still a minority, have introduced improved induction processes to try and address these problems. Yet it may not be feasible for this to be done entirely in an up-front during pre-entry induction and post-entry short training phase because there is probably a limit to how much new information a worker can absorb in a day or two. In other words, the training period may need to be elongated. The costs of ongoing training, as well as the perceived cost burden of training temporary workers in high turnover situations, are disincentives to employers devoting resources to training their temporary workers adequately. An example cited in Chapter 8 highlights that such an investment is both manageable and effective. Moreover, to accept these arguments is to concede that the use of temporary workers entails an explicit sacrificing of OHS standards. In several industries, employers recognized the problems posed but felt that they had no choice but to use a significant proportion of temporary workers due to fluctuations in output levels, prices or demand. At the same time the costs of induction were seen to pose a dilemma. For example, a meat processing industry representative indicated that it might cost $1,000 to induct a worker when the cost of a Q fever vaccination was included and yet significant number of workers might decide against abattoir work within a short time of starting leaving them with the dilemma of vaccinating all workers before starting or ‘taking the risk for two weeks.’ As noted elsewhere, there was also the problem of double vaccinations where workers moved between abattoirs. 206 --
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As noted in Chapter 5 some large employers also identified a problem in relation to workers’ compensation claims by temporary workers. A number argued that, since these workers lacked a job to return to, there was an incentive for them to elongate the claim period and even use this as a basis for claiming unfair dismissal. Others pointed to a difficulty in finding suitable alternative duties to an injured temporary worker. Following up the workers’ compensation theme, several employers (in industries like healthcare and community services) expressed frustration at workers’ compensation claims by workers eventually found to be working illegally in Australia. 6.2.5 Part-time work and Multiple Jobholding During visits to IRGs (including health and community services, mining, manufacturing, transport and storage) a number of employer representatives made reference to multiple jobholding as either a significant or worrying phenomenon in their industry. One example cited during visits to IRGs was the aged care industry where it was claimed 34% of aged care workers had other paid jobs. In a number of industries (such as mining) employers expressed understandable concern that workers undertaking more than one paid job could suffer from fatigue that endangered themselves, other workers as well as undermining attempts to manage OHS risks. For example, one OHS manager from the mining industry believed multiple jobholding was a serious issue in the Hunter Valley with workers trying to run a farm and work in a mine. Another manager from the same industry in Western Australia referred to problems with workers returning exhausted from extended shift breaks that had caused the company to abandon this particular roster system. A similar point was made about the preference of some workers in mining for permanent night shift so they could manage their business during the day. As with regulators, the practice was not seen to be especially prevalent by managers but of concern because of the potential consequences of even a small number of workers undertaking multiple jobs, especially in industries such as mining, transport or logging. 6.2.6 Downsizing/restructuring and job insecurity One seldom anticipated effect of reduced staffing levels might be to increase the number of persons working in isolation – a change that requires a reconsideration of measures to address the risk of injury or, in some workplaces, occupational violence. For example, what safety measures are appropriate when a miner’s workstation near a conveyor belt is more than 400 metres away from any other worker? Issues of workplace design can become more critical when workers work alone, as in the case of small rooms or alcoves that may increase the risk of assault of medical staff by patients or others in a hospital. The issue of isolated workers was raised in a number of IRGs, with examples being cited including the mainly contract workers reading or installing electronic meters in the electricity supply industry. Some employer association representatives also saw downsizing as an issue, both in terms of being an incentive to lodge workers’ compensation claims and also because of the risks generated when the process itself was not properly managed. Enormous downsizing, enormous amount, and it is an issue. And whenever it occurs your workers compensation claims increase because particularly in government and
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statutory authorities because they’re (workers) totally aware of their situation, what they can do and what they can’t do. And within weeks of the downsizing they will lodge a claim that will be long term…Its put additional pressure structurally and they (the employer) haven’t thought it through and modified their systems to take account of the fact that there were going to be fewer people doing the work and it has been a problem…Even in the state public sector, you’ll get a chance to look at their statistics, people were falling over like ninepins at one point of time with stress because they were making themselves a bit skinny and that was the natural reaction.
6.2.7 Small Business A number of employer representatives spoken to in the course of this project identified small business as a particular problem area in relation to OHS, and several indicated that they felt regulators failed to target their enforcement activities accordingly. The representative of one employer association stated: Mind you, small business are the ones that present the problems in occupational health and safety and the problem is the bureaucrats only have so many resources to check compliance and enforcement and they just look at the big (employers)…And when you go to them look them in the face and tell them ‘small business is where all the accidents happen and why do you put your inspectors with the big guys all the time?’ they really struggle with an answer…There’s a psychological and cultural aspect to the whole thing…inspectors like to feel they can do something of substance and that they’re having an impact and obviously they don’t feel they’re having an impact dealing with a business that employs two or three or five people.
As no small businesses or their representatives were interviewed, and small business does not tend to belong to most employer associations, this opinion might be seen as biased. However, the perception that there are serious OHS problems in small business warranting attention does accord with evidence presented elsewhere in the report. That’s at least some employers see the lack of agency resources as inhibiting enforcement activity in relation to small business is also noteworthy. Again, there can be little doubt small business is less likely to be visited by an inspector despite the more recent efforts of some agencies. However, this generalisation does not apply to the risk of serious charges being laid (with say a potential gaol term) against an individual following a serious incident, where in practice the owner/manager of a small business is at much higher risk than the CEO of a large firm. Several small business representatives did provide information to the project on a confidential basis indicating problems in relation to hazard exposures or the use of chemicals that they attributed to the disruption caused by rapid turnover of staff and the subletting of work within the employer’s premises. This information generally pertained to small business in the service sector. 6.2.8 Volunteers and Other Special Category Workers In general the employers and employer associations spoken to did not raise any issues in relation to volunteers (not surprising given the interview selection) although the matter was raised by at employer representatives on at least one IRG. As indicated in the section on labour hire, a number of employer representatives did express concern in relation to group training companies. These concerns included the minimal level of 208 --
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induction provided to trainees/apprentices during workplace experience visits. At the same time, it was seen to be a ‘mixed’ picture with some training companies devoting extensive efforts to these issues through their training officers who developed close relationships with host employers. 6.3 Challenges for Workers and Unions During the course of interviews for this project union representatives raised a wide array concerns in connection to changing employment relationships. Areas of particular concern were outsourcing/subcontracting, home-based work, telecall centres, labour hire and temporary work. A repeated complaint was that the introduction of subcontractors, labour hire firms and other 'third' parties was leading to both accidental and deliberate attempts to shift responsibility for compliance with OHS legislation. Echoing the concerns of a number of regulators (see the last chapter), union representatives repeatedly argued that contrary to the vertical and horizontal chains of responsibility established under the general duty provisions of OHS legislation there was a tendency for employers to see outsourcing or labour as diminishing if not removing their legal responsibilities. Multi-tiered subcontracting in industries like construction was seen as especially problem because the complexity was conducive to confusion, inconsistencies in terms of overlapping responsibilities/overall control and calculated forms of responsibility shifting. In general, union representatives believed regulatory agencies had not done enough to combat this trend but of even greater concern were efforts by the labour hire industry to lobby governments to amend legislation to reflect their preferred position (discussed elsewhere in this report). A union representative in one jurisdiction alleged this lobbying by employers to modify the legislative duties was not confined to the labour hire industry. I would just like to say that this business of contracting out of obligations may well not be what the law currently says but the (names two employer organisations) are currently lobbying all of the state jurisdictions about changing those laws.
Within the confines of the project it was impossible to further investigate this claim. Outsourcing/subcontracting, home-based work, telecall centres, labour hire and the use of casual/temporary workers was also seen as facilitating a return to more individualised or worker-centred perspectives of responsibility for injury and OHS. Unions argued that workers concerned about their job security as well as subcontractors, labour hire and temporary workers were extremely susceptible to subtle and not so subtle pressures to internalise responsibility and not raise OHS issues. In virtually every interview with union representatives reference was made to the reluctance of workers in insecure forms of employment to raise OHS concerns. At the same time, one union representative indicated that her own union had been complicit in the process of internalization/individualization. The union placed an advertisement in one of its publications on the importance of the labour hire workers using personal protective equipment (as distinct from advocating the hierarchy of control measures). Unions also pointed to unexpected effects of outsourcing and other flexible work arrangements. For example, in one large service sector organisation a dispute arose over the removal of OHS information from a notice board. When the HSR complained, management told him this was done because a contractor was about to charge them (the principal firm) rent for the use of the board (documents attesting to this incident were supplied). Another example 209 --
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relates to the uncertainty of HSRs with regard to their rights to represent leased workers or contract workers (see the discussion of representation issues in chapter 4). A NOHSC funded ACTU (2001a: 14) survey of 255 health and safety representatives (30% response rate) echoed many of these concerns. Leading OHS issues of concern to HSRs included work overload (49% of those surveyed), organisational change/restructuring (46%), inadequate staffing (46%) and long working hours (46%). Other issues included skipped rest breaks (43%), violence from customers/clients (44%), and the presence of contractors/labour hire (31%). The most common concerns expressed in relation to contractors/labour hire were their alleged propensity to 'cut corners' on safety, their lack of safety awareness and unwillingness to raise safety issues for fear this might damage their future work prospects (ACTU, 2001a: 10). On the positive side, the survey confirmed that consultative arrangements were present and actually used in the vast majority of workplaces where HSRs were present (though the survey did not ask questions about the involvement of casuals, contractors or labour hire workers in this). The reference to HSRs raises another issue of concern, namely a weakening of worker participatory mechanisms due to the growth of contingent work arrangements. As noted in chapter 4 this is a significant issue in terms of the effectiveness of preventative legislation and has attracted the attention of at least one regulatory agency. In the course of interviews unions too expressed concern about how the growth of contracting, labour hire and temporary workers was undermining participatory mechanisms, especially with regard to HSRs. Union representatives were asked to nominate specific instances and a number were provided. For example, a Victorian union representative referred to the collapse of the HSR structure within the labour hire segment of the Victorian power generation industry and also alleged other workers raising OHS issues had suffered victimisation. In their view, the move (associated with privatization) from a single employer with large workplaces to multiple employers, some working from small workplaces, had devastated a previously well-established structure of representation. She pointed to a number of practical difficulties in relation to this and other areas associated with the introduction of new companies or the letting of new contracts. That can entail rapid workforce changes. Referring to one such case she stated: Massive increase in the workforce, no structures, no communication – someone gets electrocuted. They didn’t die but they went off to hospital (and explaining the absence of HSRs) the Act gives you 14 days. You’ve got casuals, you’ve got the pressure of getting a job, your doing a 12 to 14 hour day…The peak activity (for the contract) was two weeks, the job lasted for six weeks.
The same official argued that the absence of HSR representation, as in the case just referred to, had led to instances where matters that might have been resolved amicably escalated to the point where industrial action was taken. In terms of addressing this problem the option of roving safety representatives along the lines of the Swedish regional safety representative system discussed elsewhere in this report was being given consideration. The union had made an application to the Victorian government in connection with this. In a similar vein, other union representatives referred to the need for representative structures that incorporated contractors where they constitute a significant part of the workforce. Again, the official nominated large workplaces (a newspaper plant and a factory) where the substantial use of contractors had effectively meant a substantial component of the workforce was not represented on site safety committees and also lacked the assistance of a HSR. This included groups like security guards who faced quite specific risks not shared by other 210 --
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workers. Union representations to have this matter addressed were rebuffed by management on the grounds that the workers were not employees of the company. The union was also critical of the position adopted by the OHS agency in this jurisdiction (not NSW), which was not seen as assisting to resolve the problem. It was suggested that inspectors should be assessing participatory mechanisms by asking questions in relation to the composition of the workforce (labour hire, temporary workers etc). 6.3.1 Problems in identification for the purpose of preventative action and representation in workers’ compensation proceedings Over time, workers who, as contractors, leased or temporary employees move or rotate through a variety of jobs and working situations have the potential to be exposed to a wider array of physical, chemical and organizational hazards (including lack of familiarity/experience) than workers in more permanent employment arrangements. They are less likely to be aware of hazard exposures or to be able associate a health problem with a particular job or task. This presents problems for workers both in avoiding risks and in dealing with any injury or disease that does arise from their work activities. An increasing number of such workers also make it more difficult for unions to ensure adequate preventative measures are in place or to represent them in workers’ compensation proceedings. The most extreme case is with regard to workers who are employed illegally (like some types of 'body hire'), whose engagement is not declared for the purpose of workers' compensation and other statutory entitlements, and illegal immigrants. These workers are even more reluctant to identify themselves to unions or government authorities and therefore even more vulnerable to the imposition of unsafe working conditions. 6.3.2 Changes industrial relations institutions and regulation The challenges posed by contingent work to unions in the OHS sphere have been exacerbated to some degree by associated or parallel changes in industrial relations regulation and institutional arrangements. Under the compulsory arbitration there were a series of provisions, which afforded at least partial protection to contingent workers in ways that could affect OHS. They included the establishment of minimum award rates of wages and wage recovery mechanisms, virtually exclusive union representation of workers before industrial tribunals, and relatively unfettered right of access to the workplace to duly appointed union officials. In addition, there were provisions in particular awards and agreements that specified the ratio of casual to permanent workers or part-time to full-time workers, contracting out of work, staffing levels, call-back times shiftworkers/casuals, minimum payment periods for casuals and other matters affecting contingent work arrangements. While by no means pervasive these provisions affected a large number of workers. Finally, in several jurisdictions legislative provisions that protected some categories of contractors and home-based workers (most notably clothing outworkers) and allowed tribunals to void contracts found to be harsh and unreasonable (such as truck purchase/work agreements entered into by owner/drivers). It is not proposed to explore the nature of the connections between these features and OHS here (for a discussion see Bohle and Quinlan, 2000:445-66) though a number will be elaborated on in other parts of the this report. Attention here will simply focus on a number of changes in the industrial relations regulatory framework and environment that have weakened the protections these arrangements afforded. Over the past 20 years a number of significant changes have been made to industrial relations legislation in Australia. In broad terms these have entailed a move to enterprise bargaining (with consequent less reliance on awards and 211 --
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intervention by industrial tribunals), the introduction of non-union negotiation/agreements (including in some jurisdictions provision for individual contracts), restrictions on reinstatement provisions, and a weakening on union rights of entry/rights to represent workers (including membership preference clauses). These changes have been pursued most vigorously at the federal level where awards have been simplified to 20 minimum conditions (OHS is not one of these) and this has effectively precluded the setting of casual/permanent ratios and most other specific provisions just mentioned in awards. The federal system has also introduced individual contracts known as Australian Workplace Agreements and in at least one industry (ie trucking. See Quinlan 2001) there is evidence of a conflict between the provisions in these agreements and OHS. Restrictions on union membership in relation to self-employed workers also affect the capacity of unions to incorporate them in the minimum rates established in awards. In NSW the scope of change has been much more modest, leaving awards largely in tact (although union rights of entry have not been fully restored to where they were prior to legislative changes made more than decade ago). The overall effect of these changes has been to diminish union negotiated controls on the use and working conditions of contingent workers, though as implied, this effect has been more profound in some jurisdictions (such as the federal jurisdiction) than others (such as NSW). Unions may have been able to use these devices to limit the OHS effects of the shift to contingent work arrangements. Quite apart from direct regulatory effects, the growth of contingent work arrangements has created strategic problems for trade unions and weakened their ability to protect the employment conditions of workers, especially casuals (Campbell, 1996:571-99). By and large, few self-employed subcontractors belong to unions even in industries where they work interchangeably with employees (such as construction and trucking – in the latter union membership amongst owner/drivers is estimated to be around 20%. See Quinlan, 2001). Moreover, as in many other countries, unionisation rates amongst casual workers in Australia are significantly lower than those found amongst workers with permanent jobs. As can be seen in Table 6.1, in 1994 permanent workers were more than twice as likely to belong to unions as casual/temporary workers. As union density has declined this gap has been maintained. Figures for 2000 (ABS, 2001: 25), when overall union density was 27.4%, indicated that 33.5% of permanent employees were union members, 24.6% of those on fixed term contracts (with leave entitlements), 11.6% of self-identified casuals and 8,2% of employees without leave entitlements who did not identify as casuals. In sum, lower union membership levels amongst contingent workers (and frequent job changes amongst some groups like temporary and leased workers) make it very difficult for unions to represent their interests in terms of wages, hours, OHS and workers’ compensation entitlements. The growth of such arrangements has also contributed to an overall decline in union density over the past 20 years and this, in turn, has had a more general effect on union bargaining power (including their ability to negotiate on OHS). It is worth noting that collective agreements that in some way regulate the use of contingent workers is by no means unique to Australia. Nor are legislative challenges to such provisions. In British Columbia, for example, a Bill (Legislative Assembly of British Columbia Bill 29-2002) has been recently introduced that would void a series of provisions in collective agreements in the healthcare sector pertaining to employment security (notice periods, training assistance and seniority preference in transfers) and limiting contracting out (outsourcing). The unions have launched a challenge to this Bill (The Health Services and 212 --
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Support-Facilities Subsector Bargaining Association and others v. The Province of British Columbia, 2002). Table 6.1 Australia: Unionization Rates: Permanent and Casual Employees by Sex (%). August 1994 Full time Part-time permanent permanent
Full-time casual
Part-time casual
All employees
Men
43.2
35.5
15.7
14.1
37.9
Women
38.5
39.8
9.9
15.3
31.3
Persons
41.6
39.1
14.0
14.9
35.0
Source: ABS Trade Union Members Australia, August 1994. Product no. 6325.0.40.001 compiled by Campbell, 1996.
In sum, the growth of contingent work arrangements were often viewed by unions as a means of bypassing or evading existing minimum employment standards, while the changes to regulatory regimes weakened their ability to retain standards. They saw this as being exacerbated by the winding back of industrial relations enforcement activity in some if not most jurisdictions to a complaints-based rather than proactive breach detecting or targeted enforcement regime. A number of union representatives argued that the maintenance of minimum employment standards was essential to safeguarding the OHS of workers. The remainder of this subsection will discuss union perceptions in relation to particular work arrangements. 6.3.3 Outsourcing/Subcontracting Unions were almost universal is seeing outsourcing as posing potentially serious OHS risks, pointing to under-bidding on contracts, corner-cutting on safety to reduce costs or complete tasks more rapidly, problems of training and communication and facture understanding amongst the parties of their legal responsibilities. As examples of many of these issues has been cited elsewhere in the report little point would be served by further elaboration and illustration here. It is only worth mentioning a few additional issues raised. First, union representatives repeatedly made the point that contractors were unlikely to raise OHS issues because they did not want to take time off to do this, were too preoccupied with getting the job done to recognise the risk, or feared raising such matters might jeopardize future employment prospects. Second, several suggested that outsourcing could lead to a loss of corporate memory – an effect more typically connected to downsizing – because it can result in middle-level management being made redundant and thereby losing vital informal knowledge about the connection between work practices and safety. This was seen to be the case where contractors were used to undertake core production activities or routine maintenance because the outsourcing resulted in a reorganization of functions and structures within the firm. Related to this, outsourcing of such activities could result in dispensing more graduated learning processes whereby workers moved to more demanding positions on the basis of experience. 213 --
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Examples cited included the use of accelerated training programs for contractors in mining who, unlike more experienced miners, were unable to ‘read’ sounds in the roof as an early warning sign of trouble (notably rock falls). Third, several union representatives pointed to the implement effective health/hazard control measures (as distinct to those relating to safety) with regard to subcontractors. Typical examples cited included the failure to include the handling of hazardous materials as part of the contractor management process (if one was in place), to monitor/audit the handling and storage of hazard substances by contractors or to include them in any exposure monitoring even where contractors were at the site for some time and this practice was routine for inhouse workers. Citing several instances, a union representative stated: Welding is a classic in that you will have a workplace that only has contract maintenance work for one or two of them. Their contract arrangement is that they provide their own tools, there’s no welding extraction systems provided at all and never will be because they’re contractors. They get the workspace to come in and do their work but they provide their own tools. That’s the classic in small workplaces. In bigger workplaces in terms of general maintenance issues, a lot of it is sprains and strains, and particularly with older workers…and a lot them have (lost their job) …and then been rehired by the contractor the next week…But those are groups of workers who are often older and tired, and their bodies are more wrecked, and they then have trouble about where they apply for workers comp.
Referring to a petrochemical plant in another state, the same official stated: The permanent maintenance people, there are about 28 of them…the contractor’s maintenance staff, they were doing all the asbestos work…None of that was done by the permanents and of the three health and safety reps that were active on site, the only one that showed any guts lasted exactly four days. He is the only person made redundant, the only one who doesn’t have a job. That sort of experience goes around all the time. People hear it. So what do you do? You don’t raise the issue because you don’t want to end up without a job. There’s been six hundred blokes on that job. Information will be around (names city) like wildfire.
6.3.4 Home-based Work, Telework and Telecall Centres The TCFUA provided considerable verbal and written material to this project with regard to the OHS and workers compensation problems associated with clothing outwork (including submissions to a number of government inquiries). In essence, the union argued that the isolation of the predominantly non-Anglophone immigrant outworkers (predominantly females from south-east Asia but often working as family groups with children) and multitiered subcontracting chains resulted in widespread avoidance of minimum wage/hours, OHS and workers’ compensation entitlements. Consistent with the concerns raised by a number of regulators (see Chapter 4) home-based health, disability and aged care was identified by union representatives as another problem area. Telecall centres were seen as a serious OHS issue by unions in every jurisdiction where union representatives were interviewed (NSW, Victoria, Tasmania and Western Australia). In addition to ‘acoustic shock’, abusive customers, supervisory pressure and stressful forms of performance appraisal, problematic issues that were raised included the very low level of 214 --
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payments (sometimes below legal minimum rates) paid by some smaller and regional operators. Union representatives also indicated that they believed OHS management problems were more likely where operators had multiple clients, because of the uncertainty, pressure and disorganisation associated with short term business and employment contracts (often allegedly less than six months). Like a number of regulators (see Chapter 4) union representatives referred to problems (for them and OHS inspectors) in locating/accessing and monitoring the many ephemeral or transient telecall centres, including small limited-duration telemarketing or short-term contract centers (as distinct from major players or users like Telstra/Stellar). However, there was less concern about this type of centre in Tasmania as, like employers, unions believed most centres in this state were purpose-built and not of a transient nature (at the same time they did not claim to have much knowledge regarding small operators). 6.3.5 Labour Hire/labour leasing As mentioned above this has been an area of particular concern for unions. The Australian Workers' Union (AWU) made available a range of materials on labour hire, including its submission to the Labour Hire Task Force (AWU, 2000). In its submission, the AWU argued that use of labour hire was more pronounced in some industries, like produce harvesting (cotton chipping and harvesting, pruning and fruit picking), leisure and recreation than others such as food processing and manufacturing. It also argued an array of different terms were used to describe labour hire (labour hire, body hire, agency workers, temps, top-up team and peak period people), including a number that were specific to a particular industry. Problems raised by the AWU included the use of illegal immigrants (and other 'illegal' arrangements including tax evasion and workers also in receipt of social security payments), the use of labour hire as a form of probationary employment. It argued these arrangements meant workers were very reluctant to raise OHS, workers' compensation or other employment issues. The union offered to provide information on individual cases illustrating these problems but logistical constraints made more interviews impossible to undertake within the short time frame of the project. To try and address these issues, and those relating to casual workers, the union has sought to develop and a series of protocols or conditions governing their employment, which it has then sought to obtain the agreement of individual employers. Representatives from the Victorian meat employees union (AMIEU) referred to the use of labour hire workers in small boning rooms with inferior OHS standards that would not have been accepted by permanent employees (even within the same abattoir) and the difficulties HSRs encountered in addressing these issues (documents relating to a particular case were supplied). The Newcastle and Northern branch of the same union argued that there was an urgent need for improved and industry specific induction and training of labour hire workers. It was claimed that labour hire and contractors were often given inadequate supervision because the host assumed they were familiar with the work while the agency supplying the labour presumed it was the host’s responsibility. The union also argued that labour hire workers were reluctant to raise OHS issues for fear that they would be removed from the workplace. In Victoria union representatives also argued that some meat processors had replaced their workforce with labour hire and in so doing achieved indirect cost savings due to the lower workers’ compensation premium rating for labour hire workers (see discussion of this issue elsewhere in the report). They conceded they were unaware of how extensive this practice was.
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Consistent with the last point, union representatives interviewed repeatedly expressed the view that the desire of leased workers to obtain further work with that host and possibly a permanent position caused them to work faster (and unsustainably so in some instances) and cut corners in relation to OHS. It was also suggested that in some industries warehousing host employers had deliberately exploited the aspirations of leased workers so that they could be used as ‘rate-busters’. It should be noted representatives of the labour hire industry that were interviewed rejected these contentions and argued the attraction of labour hire lay primarily elsewhere. One manager stated: The unions will consistently raise this one (that) workers are bullied into submission. That’s not true. In the unskilled area there is a ready supply of labour. Sure we’ll hang on to a reliable worker and we’ll ask the unreliable ones to move on. So from that point of view there is a culture of compliance. But there’s also pressure coming back from awards and so on, and this again is a South Australian ruling, if the person is there for more than 12 months in the one job then they must be offered a full-time job. That’s well and good and that’s understandable but that’s not what our clients want. Our clients use us because they want a flexible workforce. They’re fruit pickers and the fruits only picked four months of the year or if they’re warehouses like (names company) then they do have peaks and troughs and going into Christmas you want a lot of workers. They pull in those temporary people and then once Christmas is over they let them go because they don’t need them anymore. They don’t have to go through the hassles of employing, they don’t have to go through all the issues with the unions and it’s a nice clean relationship as far as they are concerned…The only area where some bullying may occur is in highly technical areas where there’s a very limited pool of candidates and that’s where you try to grab a candidate and hang on to him (sic) because you know he is able to service your clients to their needs. The incentive is to try and engender the loyalty of the person. If you can’t engender their loyalty then you use whatever other tactics are available to keep them in because they’re a valuable commodity.
Unions also expressed the view that labour leasing was conducive to a general erosion of working conditions, including OHS, via the manipulatory avoidance if not outright evasion of regulatory standards. It is worth noting that a recent report on temporary agency workers prepared for the European Foundation for the Improvement of Living and Working Conditions (Storrie, 2002: 52-3) drew on interviews with inspectors, unions and other sources to reach an essentially similar conclusion. Summarising the findings of national reports prepared for this overview report, Storrie (2002: 53) states: In France the national report states that ‘everyone knows…and the Labour Inspectorate is aware’ that is easy to circumvent the limitations on assignment duration. The UK national report refers to trade union sources that claim ‘…clear evidence of considerable abuse and malpractice.’ It cites avoidance of statutory holiday pay and non-payment of social security contributions as examples. The German report mentions abuse in the regulation of working time, holiday pay and sick pay, and refers in particular to some agencies bypassing their obligation to pay wages during ‘unproductive periods’ by providing such wage substitution on the basis of only 35 hours per week when workers may have been working longer hours. A postal campaign by Austrian trade unions to inform temporary agency workers of their employment rights has led to a large number of court cases, mainly concerning the payment of wages when not hired out.
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6.3.6 Casual, Temporary and Itinerant Workers Along with outsourcing and labour hire, the engagement of casual or temporary workers was the work arrangement that aroused the most widespread concern amongst unions interviewed or who provided material for this project. The OHS implications of home-based work and telecall centres were a source of considerable concern to a particular group of unions who either covered these workers or were affected by their activities (as in cases where telecall centres involved an outsourcing of work). Casual/temporary and fixed-term contract jobs, on the other hand, were seen as an important issue by most unions. Further, even with regard to telecall centres some of the concerns expressed related to the large proportion of centre staff engaged on a casual or short-term contract basis. Problems identified included inexperience, inadequate induction/training, failure to provide PPE and the allocation to jobs with insufficient consideration to breaks or task variety. Another issue raised was the absence of health or hazard exposure surveillance measures with regard to casual workers even where these were a standard practice for permanent workers in that workplace. Unions in several jurisdictions argued that even within the public sector temporary employment was being used as potential pathway to permanent employment and this resulted in such workers going ‘flat out’ (not taking breaks etc) in the hope of securing an ongoing engagement. Problems in relation to inexperience and a failure to report injuries or illness were also raised with regard to temporary workers in government employment. Another variant of the use of temporary employment as a form of probation identified by unions in Tasmania was the periodic use of young ‘trial’ workers, especially in the hospitality sector and small business. The higher level of unemployment in this state was seen to facilitate such practices. A union official from Victoria stated that in her experience casual workers were allocated to the worst jobs in a workplace, including those with the highest risk of sprains and strains (such as order picking) – a view echoed by other union interviewees. Seasonal workers in areas like fruit picking was another area of concern on the basis of their inexperience, vulnerability and the difficulty of tracking transient workers. When asked about workers who return regularly to a particular job or employer union responses varied. In Tasmania, for example, unions acknowledged there was an element of this but argued that even where this occurred each incoming ‘cohort’ of seasonal workers also included a group of first time entrants or persons who were new to this work. Further, union representatives suggested that because a practice was longstanding did not mean it was especially safe. Similarly, a union representative from Victoria stated: My anecdotal evidence in terms of food (processing), the seasonal industry, is that they expect to be injured but they’re off work til next November. They don’t work between April and November. They expect that they will be able to get better. Some of them do and then they go back…You will expect that you will have buggered arms or wrists or shoulders…You work hard, you work long…and you see it and your employer sees it as a four month job….If they get workers’ comp they’re very pleased but they don’t expect workers’ comp.
Reference was also made to industries where insecure employment had been typical for many years (such as contract cleaning) and where problems of inadequate training etc that were now beginning to receive attention (as these types of work arrangement spread) had long been 217 --
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ignored. In other words, some of the problems linked to changing work arrangements were not new but could found in particular industries 20 or 30 years ago. Unlike some employers, few unions saw much difference between the risks posed by directly hired temporary workers (whether casual or fixed term) and those introduced under outsourcing or labour hire arrangements. A union representative in Western Australia stated: Casual can be fixed contract jobs and fixed contract jobs not surprisingly enough have an effect on safety and an example of this is the mining industry where a crowd like (names mining company) will bring in contractors with a two year contract but its reviewed at six months. So they put people below ground and they put very little resources into training because they don’t know if they’re going to have a contract at the end.
This view of slack induction requirements by mining employers is markedly different from the views presented by mining employers (see above and Chapter 8). The same official suggested that while slack induction practices had been by no means atypical there had been an improvement in recent years, partly in response to an inquiry into mining fatalities (Western Australian Prevention of Mining Fatalities Taskforce, 1997). As in most other areas discussed within this report, union representatives tended to focus on safety issues and reference to health or disease risks was relatively uncommon. The same point can be made in relation to interviews with regulators and employer representatives. At the same time, several unions did make explicit reference to health risks associated with temporary workers (and contractors to), most notably the poor handling of hazardous substances due to inadequate training, supervision or (in the case of contractors) a desire to cut corners and save time. One example cited by Tasmanian union representatives was in relation to the handling of hazardous chemicals in the plantation forestry industry by contract workers. 6.3.7 Part-time work and Multiple Jobholding In the course of interviews very few union representatives expressed concerns in relation to permanent part-time work or multiple jobholding. 6.3.8 Downsizing/restructuring and job insecurity Job insecurity was seen as a touchstone issue by a number of union representatives interviewed for the project because it was seen to be a critical element in most if not all the work arrangements discussed in this report. The biggest one is job insecurity. I think that overlays everything else. That’s the crux of the issue in terms of all the other problems. I mean, if people feel insecure about their jobs they’re not likely to advocate on their own behalf.
6.3.9 Small Business In general, union representatives interviewed for the project raised few issues in connection in relation to small business. This undoubtedly reflected, in part, their limited presence in such workplaces. There were several exceptions, however. One important exception was that the use and OHS practices of small subcontractors did form part of the concern expressed in 218 --
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relation to outsourcing, discussed above. These small subcontractors were seen as being in an analogous position to employees with one union official remarking: Those sorts of small micro subcontractors are no different from employees. They’ve got the same resources as employees, they’ve got the same lack of control as employees and they’re open to the same gross exploitation as employees. So that’s one of those examples of transferring risk to the individual…For a state bureaucracy (the principal contractor) to say this is what you’ve got to do (ie prepare an OHS management system) ignores the reality of…the workplace. It’s all very well to do that with (names two large companies) but if they’re doing a contract in a chain of six (steps) down the line, the poor bastards, its no different from the process worker, its no different from the casual hired by (names another company).
Another area of small business to be raised by unions was OHS problems in agriculture/rural activities, including family farms. A union representative from Western Australia, referred to a number of serious incidents in that state (including two children/youths sucked into a wheat silo after being sent to push wheat down by their father) as highlighting a failure of OHS regulators to impress the message that the family farm was a workplace. In the incident just referred to, which was well publicized, the union representative alleged the silo had been modified to allow the children access but that pressure from the farming lobby had effectively ‘nobbled’ attempts to prosecute in this area. It should be noted that where family members are killed in incidents at small businesses government agencies in some, if not all, Australian jurisdictions have an understandable reluctance to prosecute (given the emotional trauma already imposed). At the same time, another union official from the same state believed prosecution was essential to send a message that compliance with the law applied to all and the courts were in better position to mitigate the penalty imposed, taking into account the facts specific to each case. A final point raised by unions worth mentioning was in relation to hazard exposures. As noted elsewhere in this report with some notable exceptions those interviewed irrespective of whether they were regulatory staff, employer or union representatives – tend to concentrate on safety issues rather than health risks. However, one exception raised by a union representative was that in the (predominantly small) motor repair, accessories and panel beating shops it had been noted that frequent job changes by mechanics and panel beaters made it very difficult to track exposure to spray painting chemicals and other hazardous substances. In their view, regulators had not addressed this problem. As noted elsewhere in the report, similar issues were raised in relation to other areas of small business by a number of employer representatives. 6.3.10 Volunteers and Other Special Category Workers Several special categories of workers to cause particular OHS concerns amongst a number of unions, such as the construction division of the CFMEU and the AWU, were illegal immigrants, those introduced on short-term visas or backpackers. All three groups were seen as often being employed in poorly organised or dangerous work settings (such as fruit picking or ‘backyard demolition’) and being ignorant of their rights or reluctant to raise OHS issues. Since this issue has been discussed extensively elsewhere in the report nothing further will be added on this except to say that those unions to express concern indicated they believed the use of such workers (especially illegal immigrants and non-Anglophone workers on shortterm visas) had increased significantly in recent years. 219 --
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6.4 Challenges for OHS and other Professionals The presence of contingent workers can create problems for OHS professionals in a number of ways. First, organisational change processes may directly affect OHS services in an organisation where the OHS unit is reduced or splintered, or in other ways reorganised in tandem with downsizing, devolution or other forms of restructuring by the employer concerned. In some cases all or part of the OHS function (including rehabilitation) may be outsourced (comparing service provision between permanent in-house professionals and outside professionals engaged on a fixed term contract warrants research). Second, organisational restructuring/downsizing can affect employee morale and participation in onsite auditing, health promotion and OHS services. Equally, the existence of a large and volatile temporary workforce, including contractors coming on and off-site, or workers employed at home and in other remote locations will also make it more difficult for OHS medical practitioners and nurses to carry out key tasks. These include undertaking preplacement medical examinations and surveillance, risk assessment of all work processes, and maintaining adequate injury, incident etc records – including those required under legislation (Gyi et al, 1998; Morris, 1999:477). The problems arise not simply from workforce volatility associated with precarious employment but also an increase in reporting problems – an issue raised by a number of studies in our review (Morris, 1999; Quinlan and Mayhew, 1999). These problems will also impact on outside OHS service providers as well as other firms and agencies dealing with injured workers (such as insurers and rehabilitation providers). For example, those involved in rehabilitation will need to confront issues of how to help a injured worker employed on a temporary basis where the employer has no real interest in their fate or future prospects. Even where OH services are mandated as in parts of the EU, the coverage of smaller workplaces and firms has been problematic (see Walters, 1997:267-8) and the growth of more disorganised work-settings is almost certain to amplify problems of both coverage and the quality of service provided. At the very least these problems will present new and significant challenges. Some (see Gibson, 1999) suggest OHS professionals will need to develop new skills and competencies if they are to exert an impact and retain their relevance. 6.5 Conclusion Given logistical constraints, it was impossible to undertake a comprehensive survey of the views of employer and union representatives and other interested parties. However, visits to almost every IRG in NSW plus interviews with 40 union and employer representatives and other submitted material did yield considerable information. While, as might be expected, the views of employers and unions were by no means identical both saw changing work arrangements as presenting difficulties or challenges in terms of managing OHS. There was a greater variation amongst employers as to extent of the problems than was the case of unions. There also appear to be clear differences in opinion between host employers and labour hire firms and there is evidence of similar differences between firms located at different points in the supply chain (for example, in long haul road transport. Quinlan, 2001) Employers were more likely to see these problems as manageable although a number saw government agencies as playing a more proactive role in this, by producing guidance material or filling gaps in knowledge. Unions uniformly expressed grave concern at the OHS risks associated with outsourcing, temporary employment, leased labour and other contingent work arrangements. 220 --
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Some of the difficulties of managing OHS raised by those interviewed or submitting materials to this project have also been referred to in a recent report by the European Agency for Safety and Health at Work (Goudswaard, 2002: 34-40). Examples of this including the difficulty of achieving integrated management where there are complex sets of contractual arrangements (as with multi-tiered subcontracting) and logistical constraints/knowledge gaps on the part of small business. The EU report also identifies a number of number problems not identified by unions and employers here including how to retain lifelong learning in the context of rapid organisational change and how to ensure OHS programs keep pace with such change. Future project might usefully explore these issues.
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Part 2: Evaluating Existing Remedies and Developing New Strategies: Prevention In the past decade employers, industry associations, unions, government agencies and OHS professionals have become increasingly aware of the need to address risks posed by contingent work arrangements. We will deal each of these responses in turn. At the outset it should be noted that while treating prevention and workers’ compensation separately for the purposes of this report is logical there are some important areas of overlap. Most obviously, workers’ compensation claims data is a major tool used by prevention agencies to target their interventions. Following the format in Part 1, the issues raised by this are discussed in both Part 2 (especially chapter 7) and Part 3 (especially 11) of this report. Further, in some industries at least the need for a whole of government or multiple agency approach has been recognised or recommended and this is dealt with in Part 4 of this report.
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Chapter 7 Regulatory initiatives, enforcement strategies and sponsored collaboration
7.1 Introduction Governments and their OHS agencies have responded to the risks posed by contingent work in a number of ways, including the issuing of new standards/directives on particular contingent work arrangements (such as the European Union’s initiative on temporary work), the production of guidance material and targeted enforcement programs/prosecutions (as has occurred in relation to subcontracting in the UK and Australia), joint industry initiatives on small business (requiring them to produce safe work plans and the like), and setting of minimum OHS and labour standards for government tenders (as in the USA). While of value, these responses are largely reactive, apply to only some types of contingent work and fail to address the underlying causes of unsafe work practices identified earlier. Some industry specific interventions do avoid the latter problem, an example being the ‘Behind the Label’ strategy for regulating OHS amongst home-based clothing workers recently initiated in some Australian jurisdictions which entails an integrated web of controls and a targeting of retailers as the key influence in the production chain (Johnstone et al, forthcoming). In France the government has adopted a broad ranging but arguably effective approach of minimising the gap in regulatory entitlements between temporary and permanent workers. The remainder of this chapter will examine both broad policy initiatives as well as those directed at specific work relationships. 7.2 General Legislative and Policy Initiatives 7.2.1 General Duties and the Problem of Determining the Status and Responsibilities of Parties As noted in Chapter 4 the wide-ranging general duty and structured (both horizontally and vertically in terms of duties owed by various parties) provisions found in the principal OHS Act of the different jurisdictions in Australia provide a basis for addressing a number of the problems posed by changing work arrangements. Flaws in the provisions applying to several jurisdictions were identified including one that pertains to NSW that can be fairly readily addressed. At the same time, it was noted that other problems arose not so much because of flaws in existing general duty provisions as employer perceptions that outsourcing and labour leasing (and to a lesser extent the employment of temporary workers) diminished their responsibilities in relation to OHS legislation. There is a case for addressing these misconceptions by amending the duty provisions (and associated codes and guidance material), given evidence that even a growing body of prosecutions on subcontracting is having limited (but still essential) educative effect. In this regard it is worth noting recommendations for amending the obligation provisions of the Queensland Workplace Health and Safety Act by the Queensland Building and Construction Industry (Workplace Health and Safety) Task Force (2000). This 223 --
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included requiring the principal contractor to permit a self-employed person to commence work only if they were satisfied that the worker had undergone a general workplace health and safety induction (by citing an induction card). The issue of the understanding and adequacy of specific duties with regard to employees and other workers such as the self-employed and ‘apparently’ self-employed was considered by a HSE project team in the UK as part of a more general review of changing employment arrangements (HSC 2001: 7). The conclusion reached (and endorsed by the HSC) was that the existing legislation adequately covered these workers but that a specific problem existed in relation to the construction industry and that, more generally, a standard statement of clarification should appear on relevant HSC/E publications (HSC, 2001: 7). A HSC (2001: 2) report observed: The issue seems largely one of communication, ie the need to clarify and promulgate to all stakeholders the current legal position regarding health and safety responsibilities for atypical workers. We know, for example, that many of the problems arise, not because there is a lack of protection, but because stakeholders fail to recognise their responsibilities (deliberately or otherwise); and because the employment status of individual workers is often incorrectly determined. This has a knock-on effect as far as issues like health surveillance, accident reporting, and provision of information, training and Personal Protective Equipment (PPE) are concerned. This presents problems in all sectors where agency workers and mobile workers are concerned, and is also an issue for homeworkers. In the construction industry, for example, “apparently or bogus self-employment” is a major topic of concern.
The HSC report concluded that there was not a need to revise the primary legislation but that secondary legislation could be introduced or amended where needed as part of the HSC’s ongoing legislative reforms. Changes to work arrangement have brought into question some key definitions affecting OHS, workers’ compensation and industrial relations legislation, most notably the definition/use of the term worker or employee. These definitions have become the subject of a number of reviews to industrial relations and workers’ compensation legislation (such as the recently completed review of industrial relations legislation in Queensland and the current review of the Queensland Workplace Health and Safety Act). The issue has also received attention in New South Wales, being raised in submissions to the Legislative Council Standing Committee on Law and Justice Inquiry into Workplace Safety (1998) although the Committee made no recommendations in this regard. Thus far, the outcomes of these reviews have been mixed. In Queensland, the outcome of the industrial relations inquiry was basically to stick to the existing common law definition of employment although workers or their representatives may seek to be deemed as employees for the purposes of the Act. Under s24 (3&4) of the Queensland Workplace Health and Safety Act which essentially provides alternative prosecution options so that a prosecution can be launched irrespective of whether the person charged is found to be an employer or self-employed (consideration is being given to include worker). Section 30 of the NSW OHS Act 2000 also provides for alternative verdicts for an offence against sections 8 and 9 (the general duty provisions. I am indebted to Richard Johnstone to alerting me to this). Another approach is the use of deeming provisions in some jurisdictions. The use of deeming provisions in both OHS and workers’ compensation laws to address problems raised by subcontractors is by no means new. 224 --
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In addition to potential deficiencies within existing definitions under OHS legislation there is also the issue of the compatibility or consistency of definitions used by OHS, industrial relations and workers’ compensation statutes. The issue of moving to a more consistent definition has been raised in at least one jurisdiction (Queensland). Questions of determining the status of a party are in some situations, most notably instances of multi-tiered subcontracting, part of another issue – namely the relationship between these parties and who, for the purposes of OHS legislation, has critical control. Multi-tiered subcontracting can obfuscate legislative responsibilities where, for logistical and policy reasons, regulators wish to locate an overarching responsibility with the ‘top of the chain’. It may therefore become essential to be able to identify and demonstrate each link in the chain from the person actually performing the task to the final recipient of the product or service. In some activities, like the manufacture of clothing by home-based workers, identifying each link is by no means a simple task (in a fluid world of changing addresses, middlemen and subcontractors). These issues, and both actual and potential remedies, are discussed elsewhere in this report so it is not intended to elaborate on them here. At this point it is enough to mention that one remedy is the requirement that the parties identify themselves to regulators and other relevant parties (such as unions) and that there are mechanisms for tracking the flow of work along the chain. Another solution proposed by the Queensland Building and Construction Industry (Workplace Health and Safety) Task Force (2000) is establishing a mandatory process whereby the principal contractor must be identified within a defined period of the commencement of a construction project. This proposal deserves consideration, although it is founded on a rather different general duty structure to NSW, and may not be suitable for all industries (such as those where the 'principal' denies any link to the activity as in the clothing trade). Another area of legislative concern has been the use of ‘hold harmless’ contracts in the labour leasing industry. In Chapter 4 it was noted that such contracts could well be struck down as an attempt to defeat legislative intent (especially in relation to the general duty provisions of OHS legislation) and may also prove unenforceable on public interest grounds. Nonetheless, not surprisingly this has not entirely allayed the concerns of the labour hire industry association about the misuse of such contracts until such time as court cases determine their standing. As a result, in at least one jurisdiction (Victoria) the regulatory agency is looking at a legislative change to ban such contracts (as noted in chapter 12 a legislative mechanism for dealing with negligent third parties is available under Victorian workers’ compensation legislation). In Chapter 5 reference was made to a series of inter-jurisdictional issues. With regard to the problems posed by the jurisdictional confusion that might arise from multi-employer worksites, ComCare noted that the agency had initiated an approach in the ACT of visiting such workplaces to explain both ACT WorkCover’s responsibilities as well as their own and what takes precedence. 7.2.2 Codes of Practice, Regulations, Guidance Material and Risk Assessment At one level, it could be suggested that the move from complete dependence on prescriptive standards to a greater emphasis on process standards under post-Robens legislation in Australia has enabled OHS regulators to adjust to the challenges posed by changing work arrangements more rapidly than if legislation had remained largely wedded to prescriptive standards (as in the USA). General duties and codes of practice are more amenable to 225 --
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incorporating recognition of different types of work organisation even if the shift to process standards has also placed extraordinary logistical and transformational demands on regulatory agencies and their staff. A number of jurisdictions have adapted their guidance material to recognise the need to take account of particular work arrangements. However, these modifications have been largely confined to subcontracting, ignoring other issues such as organisational restructuring or the use of temporary workers (though labour hire is also starting to rate a mention). Thus, for example, current versions of SafetyMAP the OHS audit system devised in Victoria (though used by some employers in other jurisdictions) do make explicit reference to subcontractors in terms of evaluating performance and designing an OHS management system. The Construction Section of Workplace Standards Tasmania has recently worked with industry to formulate a code of practice governing induction which when given ministerial approval will establish a standard induction process and mandatory minimum requirements for anyone going on a construction site (including housing as well as commercial buildings) whether they be a directly hired employee, a leased worker or a subcontractor. At a more general level it should be noted that in most jurisdictions the development of codes and other guidance material has been increasingly predicated on the use of systems concepts (including the development of specific audit tools such as SafetyMAP in Victoria. In NSW the major recent development in this regard has been the introduction of a regulation mandating risk assessment by medium to large employers along similar lines to requirements that have operated for some time in the EU. As has been discussed extensively elsewhere (Quinlan and Mayhew, 2000) the growth of small business and contingent work arrangements pose potentially serious problems in terms of the successful implementation of systematic OHS management. Problems include: • • • • • •
a reduction in the number of workers directly employed by large organisations where these approaches are most readily introduced; increasing the number of workers in isolated or inadequately planned work settings and increasing competition/communication problems amongst different groups of workers; making it more difficult to identify and address insidious risks to health such as exposure to hazardous substances; creating enclaves of contingent workers in large organisations whose incorporation into OHS management systems is problematic; weakening economic incentives for employers to adopt these systems; and weakening the level and quality of worker and union input and making it more difficult for them to monitor and vet systems performance
As yet the OHS management systems material produced by most jurisdictions gives little recognition to these factors (SafetyMAP does recognise the use of contractors) and the same applies to many OHSMS packages adopted or developed on a voluntary basis by employers. There is an urgent need for changing work arrangements to be incorporated in OHSMS materials since, as the Longford incident and other evidence cited in this report amply demonstrates, their omission can lead to a catastrophic systems failure. This issue should be addressed both in terms of guidance material and collaborative industry initiatives (for example, sections on induction and training should recognise the use of contractors and leased workers and the need to assess the effects of organisational restructuring). Developing 226 --
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systematic OHSM in small business is a particular challenge. Examples of successful ventures (such as the use of work method statements by small builders in Queensland. For other examples see Eakin et al 2000) are discussed elsewhere in this report but to implement them on comprehensive basis might not be possible even using considerable resources. A number of ways of implementing systems concepts are discussed in the following section on small business. However, it is also argued that interventions focused at small business should be more hazard-focused. In other words, there are advantages in adopting the ‘two track’ enforcement model recommended by Gunningham and Johnstone, 1999) entailing a ‘systems’ focus on larger employers able to implement this model and more hazard specific focus on those employers who are unable or unwilling to follow this path. This would also seem logical given the present exemption of many small firms from the risk assessment regulation. 7.2.3 Workplace Registration, Incident Notification and Other Administrative Issues As noted in Part 1 the problem of identifying and locating workplaces for the purpose of inspection has been magnified by the fragmenting of work tasks via subcontracting (including elaborate supply chains), the growth of small and less-permanent workplaces and the growth of home-based work. The move away from requiring compulsory workplace registration over the past 20 years has exacerbated this problem. Somewhat ironically, OHS agencies are rediscovering the value of these requirements (being devised in an era where there were a number of striking similarities with current trends, most notably a large number of small employers and extensive subcontracting and casual work). In the course of interviews, a staff in a majority of agencies referred to the issue and several (including Queensland and the ACT) indicated they were giving consideration to re-vitalising/reintroducing compulsory workplace registration as part of current legislative reviews in effort to address these issues. Another issue to come out of interviews in several jurisdictions related to another old form of regulatory control, namely the certification of plant and equipment and plant operators. As with workplace registration there had been a move away from such requirements but now a selective re-regulation is occurring in several jurisdictions. For example, following several deaths and a request from the industry Victoria is reintroducing a mandatory ticket of inspection with regard to cranes (though the accreditation process may be outsourced). It is not clear to what extent this re-regulation can be directly tied to subcontracting, more extensive leasing (or labour and equipment) and the like although some interviewees drew a connection and it would fit with earlier references to the disorganising effects of extensive multi-tiered subcontracting and leasing arrangements. With regard to the problem of non-reporting of serious incidents a number of agencies have undertaken remedial measures. For example, ComCare has significantly upgraded its guide to notification and reporting and has widely circulated this to employers (also placing it on its website) as well as running information sessions. The guide (ComCare 2001:3) devotes particular attention to changing work arrangements, noting that conducting an undertaking includes temporary workplaces and where an undertaking ‘is conducted on the employer’s behalf by a contractor or subcontractor’ (bolding in original). Considerable space is devoted to explaining who are employees, contractors and third parties (one page) and illustrative examples of notifiable incidents (four pages) including a number specifically devoted to contingent work arrangements. The later included:
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A contractor from a labour hire firm doing call centre work at a GBE site was admitted to hospital with severe pain and headaches immediately following aural shocks through her headset A contracted guard at a Commonwealth-owned services facility received lacerations during a robbery at the site and was given emergency treatment by a General Practitioner.’ An IT contract employee was incapacitated for two months after a fall in a stair well in the building leased by the employing Commonwealth agency. Sub-contracted mail sorters in a Department were subjected to an armed hold up in which nobody was physically injured (ComCare, 2001:8-10).
The guide also goes to some lengths to explain situations where notification is not required and again a number of examples involving contingent work arrangements are given. These examples are essential because the reporting rules differ with regard to serious injury, serious incapacity and serious incident and these differences could lead to confusion. For example, serious injuries to employers and contractors both need to be reported (except where the contractor’s injury occurred at a workplace controlled by the contractor for the purposes of construction or maintenance). Notification with regard to serious incapacity only applies to Commonwealth employees (not contractors) while the requirement to notify dangerous occurrences extend to ‘any person’ (including contractors) at a worksite controlled by the Commonwealth (ComCare, 2001:8-10). Thus, some apparently similar scenarios involving contractors may or may not need to be reported on the basis of one fact. Further, as acknowledged in the guide in some situations where ComCare does not require notification the Commonwealth agency will still be required to report the incident to the relevant state or territory authority. The guide would seem to have value in assisting employers although efforts to clarify the situations where reporting are required illustrate the complexity of the issue and the potential for confusion. Accordingly, in addition to the guide ComCare has had to spend some degree of effort trying to clarify the reporting requirement. Another critical issue pertaining to information raised in Part 1 of this report was the increasingly problematic nature of workers’ compensation claims data in terms of targeting enforcement activity. Agencies are not unaware of the significant gaps in compensation data – or what one regulator referred to as the dual populations (ie the injured worker group that receives workers’ compensation and the group that does not) – including those arising from changes to work arrangements. Extending her point, the officer just mentioned referred to employees working alongside each other but under entirely different sets of employment and working conditions. Agencies have developed a number of responses to this problem. First, recognising that emergency accident centres at hospitals handle a large number of serious work-related injuries that do result in a workers’ compensation claim, a number of jurisdictions have tried to develop systems for recording work-related injuries in hospitals. Examples include the QISP scheme in Queensland and a current South Australian project that involved placing a registered nurse into the accident and emergency area of hospitals to rework the information system to pick up all work-related injuries. Second, some jurisdictions like South Australia have begun to undertake employer and workforce surveys of industries or areas where a need is seen to develop a better understanding of OHS risks (including poorly reported indices like occupational violence), 228 --
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changing workforce demographics (such as ageing), working arrangements and the like. In the case of South Australia one industry recently surveyed was the aged care industry (see WorkCover Corporation of South Australia, 2001abc&d). The forms for this survey did not differentiate employment status although this could be done in future surveys. Following discussions within the agency there were plans to roll out surveys on other industries and advantages were also seen in conducting follow-up surveys to trace changes in attitudes and behaviour in a particular industry over time (including assessing the impact of particular interventions). As evidence discussed elsewhere in this report indicates, there are strong grounds for a placing such initiatives on a more permanent and comprehensive footing. Third, agencies have also used targeted workplace audit programs (see section on temporary employment below for examples). Nor are OHS agencies entirely inflexible in their inspectoral processes. Rather, they can and do adapt them to meet changing circumstances, even when doing targeted audits for other purposes. As an inspectorate manager in one jurisdiction observed: In terms of the indicators we’re finding that with employers that we are going in to see often the initial indication this is the major hazard…we’re finding they aren’t the major issues. They’ve got some lethal situations that are just sitting there…Manual handling is the predominant reason the for claims costs and sometimes you think “yeh they’re problems but they’ve got some potentially lethal situations there that they are not managing.”
In other words, targeted inspections may become a ‘door to entry’ where factors other than those originally envisaged eventually become the focus of activity. Further, some agencies are beginning to amend their claim forms to obtain necessary information. South Australia, for example, has recently required employers to nominate geographical location, host employer or principal contractors name. Finally, agencies in a number if not most jurisdictions are increasingly making use of a range of other information sources including using targeted audits as an information gathering exercise (examples of this are discussed later in this chapter). Just how effective the above measures are in counter-acting gaps and biases in workers’ compensation claims data is unknown. Even after noting these measures, inspectoral staff conceded they had discovered situations where they were targeting the wrong company. It seems reasonable to suggest that more attention needs to be given to the information used to direct prevention activities. A further administrative issue is the effectiveness of information dissemination strategies, including the communication of risk. Staff in a number of jurisdictions expressed reservations about the reliance on paper and the nature of documents produced as well as whether this sort of information delivery system was likely to be effective in the case of contingent workers. As noted below, agencies have taken steps to address perceived deficiencies in the information format used in relation to small business. Extending this, a staff member in one jurisdiction raised the issue as to whether different forms of risk communication might be required for workers with an essentially short-time frame as well as managers who viewed all or part of their workforce in the same way. Another scenario raised was the small business situation where the owner was working alongside employees but with a greater financial incentive to take risks. The validity of these scenarios is unknown but the idea of tailoring information strategies to particular groups warrants more consideration. 229 --
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Yet another administrative issue raised by Part 1 of this report was the problems posed by business succession and phoenix employers. As far as could be seen this issue has not addressed by any agency. One possible away of addressing this issue would be to target individual owners/managers rather than corporate entities where offences were detected. Finally, two other administrative issues warrant attention. First, the changing work arrangements described in this report constitute an additional layer of complexity that inspectors must address. On the positive side, the move to process standards and the greater recognition given to work organisation factors means the inspectorate is almost certainly far better prepared to meet this challenge than it would have been 10 or 15 years ago. Inspectors have developed skills in terms of understanding complex work processes and what constitutes a safe system of work. While this report was unable to examine inspectoral records this shift is fairly evident in the types of prosecutions that have been launched (a number of which are described later in this chapter). The introduction of mandatory risk assessment in NSW can be seen as a further step in this direction. At the same time, it is not clear how well prepared inspectors to recognise all the significant risks that have been associated with contingent work arrangements. At least one agency produces guidelines for its inspectors in relation to how they should deal with small business but whether other aspects are addressed in inspectoral guidelines and training is unknown. Again, this report was unable to explore this issue but believes it warrants examination so that any deficiencies can be addressed. The ramifications of changing employment arrangements for inspectoral activity, most notably weighting factors for inspections, have received attention in the United Kingdom (see HSC, 2001: 1415). A project to produce resource information on the training aspects of different relationships where duties fall and drafting guidance on passport training schemes was due for completion in mid 2001. However, the object of this project was employers and others rather than inspectorate itself. Second, a consequence of many of the issues in this subsection and other points raised in this chapter is that effectively addressing the problems and challenges posed by changing work arrangements will place a significant strain on WorkCover’s resources, and beyond what could be achieved through operational efficiencies and cost efficient targeting. In short, even with the use of collaborative program development and implementation, less costly production of materials and the like there will need to be additional resources brought to bear. This problem confronts agencies in other countries. In the UK the HSC (2001: 5) noted that a lack of financial, staffing and other resources had delayed progress on a number of projects in this area. 7.2.4 Controls on Major Industrial Hazard Facilities As noted in Chapter 4 only three jurisdictions (Victoria, Queensland and Western Australia) have enacted legislation paralleling the EU Seveso major industrial hazard directive, aimed at minimising risks in large industrial establishments using highly toxic, flammable or explosive materials such as refineries, chemical plants and nuclear facilities. It was also noted that this regulator instrument enabled OHS or other responsible agencies to prohibit changes to work arrangements, including staffing levels, that they believed would seriously compromise safety. At the same time, it has been argued that this directive failed to give sufficient attention to the potential risks posed by multi-tiered subcontracting. In September 2001 an explosion at the AZF chemical factory in Toulouse, France killed 30 people, including 21 workers – 13 of who worked for subcontractors. Problems with contractor safety management 230 --
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were determined to be a critical factor in the incident. Two of the 14 major recommendations made in the final report of the commission of inquiry established by the French National Assembly to investigate the incident were to ban multi-tiered subcontracting on so-called Seveso sites and to strengthen the role of health and safety committees (Loos and Le Deaut, 2002). Picking up on these recommendations, a parliamentary Bill introduced into the National Assembly in February 2002 contained provisions strengthening of worker involvement mechanisms, including closer involvement by worker representatives in the activities of both host and contracting firms (TUTB Newsletter Issue 18 March 2002:24-25). The Toulouse explosion was by no means the first serious incident at a major hazard facility in the EU involving subcontractors, with the TUTB citing examples going back to the 1980s (Vogel, 2002:5). Indeed, similar problems in the USA at this time had led to regulatory intervention. Following a number of serious explosions in the petrochemical industry during the late 1980s, most notably that at the Phillips 66 Pasadena complex in 1989 US Congress instructed OSHA to undertake investigations. These revealed that a trend to outsourcing and using leased workers played a significant role in these incidents. Petrochemical companies had subcontracted routine maintenance to cut costs but these contract workers were unfamiliar with workplace complexities, had received insufficient induction, safety training and supervision, and often failed to comply with established safeguards. These problems were clearly linked to what the study found to be the most striking feature of the petrochemical industry, namely ‘the distance that host managers maintain from contract employees on site’ (cited in Johnstone et al, 2002). This distancing was part of deliberate strategy of host firm’s to minimise their legal liability by minimising the control they exercised over contract workers. This approach took advantage of the prescriptive standards approach of US OHS legislation. To address this OSHA introduced a Process Safety Management of Highly Hazardous Chemicals Standard (1992) that requires employers to evaluate safety performance in selecting contractors, to inform contractors of known hazards and emergency procedures, to implement safe work practices, and to monitor the safety record of contractors. Contractors were required to ensure that their employees were adequately trained, informed of on-site hazards and followed site safety rules. Supporting the Standard was an elaborate compliance and enforcement guide covering matters such as consultation with contractor employees, training/selection and equipment inspection. This report has identified a number of serious or potentially serious incidents at major hazard facilities in Australia where changes in staffing levels or organisation (such as Longford), the use of contractors and short-term workers were at least a contributing factor. Despite the more over-arching general duties found in Australian OHS legislation (compared to say the USA) there would seem to be a real likelihood of catastrophic incident here and the experience of both the USA and Europe would seem to justify serious consideration being given to the introduction of a major hazard facilities regulation in NSW and elsewhere that can address both staffing and subcontracting issues identified in this report. There is evidence that this process is already in train. In the wake of Longford, South Australia has developed regulatory model for major hazard facilities and in July 2000 it staged a national forum attended by representatives of every jurisdiction to try to develop a national approach (Work matters Issue No.26 September 2000). In 2002 (Department of Workplace Service, 2002) an industry consultation paper was issued identifying the main issues and canvassing a series of regulatory options. While in many ways a valuable document, the paper makes no direct reference to the work organisation issues (staffing levels, outsourcing/multi-tiered subcontracting etc) that can have a crucial impact of the effectiveness of OHSM regimes in major hazard facilities. 231 --
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It is to be hoped that the issues concerning restructuring and multi-tiered subcontracting raised in this report are incorporated into any NSW or national development. As an important aside it should be noted that a recent review of 167 serious chemical incidents since 1980 by the United States Safety and Hazard and Investigation Board (Press Release 30 May 2002) identified major deficiencies in existing OHS and EPA regulations in relation to reactive chemicals (for example, the Process Safety Management standard covered only a handful of reactive chemicals listed by the National Fire Protection Association). It is to be hoped that this finding will be considered as part of a review process in Australia. 7.2.5 Addressing Limitations in Existing Participatory Mechanisms In Chapter 4 attention was drawn to the problems that the growth of contingent work arrangements poses for participatory mechanisms in relation to OHS (both those prescribed under OHS legislation and those provided under industrial relations legislation). In terms of amending legislation, simply reducing the minimum workplace size for which a workplace OHS committee need be established is at best a partial solution since it ignores the logistical considerations of how realistic it is to establish a committee in a workplace with say 10 or fewer workers and whether small employers (as distinct from small workplaces within a large employer) have the resources to operate such committees or the likelihood of union representation (often a critical source of support for HSRs and workplace committees). In its report, the Consultative Arrangements Working Party (2001) made no specific recommendations in relation to the serious gaps it identified other than, perhaps, to recommend that further research be undertaken to evaluate the effectiveness of alternative consultative arrangements such as one-to-one and staff meetings, noticeboards, email and tool box meetings. Perhaps a more effective device would be to amend the legislative provisions on participation so that subcontractors, their employees and leased workers who visit the site on a regular basis or who conduct work for the employer for more than a specified period of time must be incorporated in consultation/participative mechanisms. The WorkCover NSW OHS Consultation Code (2001c) offers at least the beginnings of a model to achieve this. At 2.4.2 of the Duty to Consult, Facilitation of Consultation, the Code (2001:12-13) states; The employer (who we will call Employer ‘A’) must facilitate the OHS consultation arrangements of another company (Employer ’B’) where the employees of Employer ‘B’ are working at the place of work of Employer ‘A’ [Reg: 27(1)(h]. Employer ‘B’ might include for example, a contractor or labour hire company. How Employer ’A’ could facilitate the OHS consultation arrangements of Employer ‘B’ will vary. It will depend on the nature of their business and the number of contractors. In the example on page 12, Smith Manufacturing is Employer ’A’ and Brown Labour Hire is Employer ‘B’. The employees of Brown Labour Hire based at Smith Manufacturing elect an OHS Representative from themselves as the OHS consultation mechanism for Brown Labour Hire. To facilitate consultation between the management of Brown Labour Hire and their OHS Representatives, Smith Manufacturing provides a meeting room and assists arranging a suitable meeting time that minimises disruption to production. They also provide OHS Representatives with
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telephone and email access to assist communication with Brown Labour Hire management about OHS concerns. In a place of work that has many subcontractors, such as a construction site, Employer ‘A’ obligation to facilitate the OHS consultation arrangements of Employer ‘B’ might extend to establishing a consultation mechanism that enables communication and consultation about OHS matters between subcontractors and their employees. To determine the most effective way to facilitate the consultation arrangements of Employer ‘B’, Employer ‘A’ should consult with Employer ‘B’ in relation to: • •
The most effective way for ensuring OHS information is communicated to all people working at the place under the control of Employer ‘A’. The most effective way for ensuring that all employees are consulted in relation to risks to their health, safety and welfare as a consequence of work being undertaken by all employees at the place of work.
Principal contractors in the construction industry should be aware they have specific obligations to provide information to employees of subcontractors or their representatives under clause 226 of the OHS Regulation. Employer ‘B’ should advise employer ‘A’ prior to commencing work how consultation with Employer ‘B’s employees is proposed to be undertaken. If an employee has an OHS Committee or OHS Representative, the employer must consult about the relationship between their workgroup(s) and the representatives of a workgroup of another employer [Reg: 22(2)(i)].
As in a number of other jurisdictions, under NSW OHS legislation HSRs and OHS Committees represent a defined workgroup. In establishing these workgroups the Code gives explicit recognition to issues raised by contingent work arrangements, by reproducing clause 23 of the OHS Regulation 2001 (WorkCover NSW 2002b: 48-49). Thus 5.2 of the Code (2001c: 24) states (in part): The OHS Regulation requires that the diversity of the employees and their work must be taken into account when determining the composition of workgroups. In particular, the following must be considered [Reg: 23(2)]: • • • • • • • •
The hours of work of employees, including the representation of employees on shift work; The pattern of work of employees, including the representation of parttime, seasonal or short term employees; The number and groupings of employees; The geographic location where employees work, including the representation of employees in dispersed locations such as transport work or working from home; The different types of work performed by employees and the different levels of responsibility; The attributes of employees, including gender, ethnicity, age and special needs; The nature of OHS hazards; The interaction of the employees with the employees of other employers (including contractors, labour hire etc).
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There can be no doubt the Code provides a guide to addressing a number of critical issues concerning flexible work arrangements. The Code’s requirements in this area need to be brought more firmly to the attention of employers and other interested parties like HSRs and unions. In terms of alternative options there are number of possibilities. One possibility is the establishment of a system of employee regional safety representatives, funded from industry, who could visit small business workplaces and assist workers there. This system has been used with some success in Sweden (for a detailed examination see Frick and Walters, 1998) and in principle it is not so dissimilar to regional check inspectors found within the mining industry in Australia (most notably in the Queensland and NSW coal mining industry). In addition to the Swedish model a similar initiative of roving Worker Safety Advisers to work with small business and their workers was initiated in the UK in March 2002. The scheme is being trialed in the UK in the building industry (in 3 regions), the voluntary sector (again in 3 regions), auto fabricators (1 region) and pubs and clubs (2 regions). The construction advisers have been selected by the building workers union UCATT, paid for by the HSE and trained by TUC tutors (Hazards 78 2002: 6-7). The trial will be formally and independently assessed. A not unrelated possibility is extending the entry rights of union officials so they can act as roving monitors of OHS or at least removing restrictions on right of entry introduced in industrial relations legislative reforms within a number of jurisdictions since the late 1980s. These restrictions included the need to give prior notice and the need for union involved to have members in the workplace not simply potential coverage of those workers. While this is less of an issue in NSW than in most other Australian jurisdictions it is still an issue. It is worth noting that a part of the review of industrial relations laws currently being undertaken in Western Australia unions have proposed an extension of the statutory right of entry provisions so union officers can enter workplaces to ensure workers are being paid their correct entitlements, that working conditions are of an acceptable standard and that OHS laws are being complied with. Another, though related option, would be to increase the number of health and safety representatives by altering the regulatory threshold for their appointment. In this regard it is worth noting the findings of a recent report into safety behaviour in the Irish construction industry. This study found that the factor most strongly associated with safety compliance was the presence or absence of a health and safety representative (McDonald and Hrymak, 2002: 66). The report (McDonald and Hrymak, 2002: 4) goes on to conclude: This study has demonstrated the potentially strong role which safety representatives can play in influencing both behaviour and compliance with safety requirements, and ensuring that both audits and hazard reports are effectively dealt with. All sites should have safety representatives and their role and functions should be reinforced as part of the safety management system.
The report noted that extending such representation would require active union and employer support on sites where there were currently no representatives and management commitment was lower (McDonald and Hrymak, 2002: 5). While health and safety representatives might be mandated for all workplaces in some industries this might difficult to implement on a general basis, and especially where there no union presence given the crucial logistical support for such representatives provided by unions. It is therefore not a substitute for the roving HSR recommendation. Nonetheless, means for increasing the number and effectiveness of HSRs warrant serious consideration. This could form an adjunct or 234 --
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complementary proposal to the introduction of roving HSRs. One possibility here is sharing HSR’s amongst a group of employers - something similar though not identical to the regionally based roving HSR model. In its recent issues paper on OHS and workers’ compensation, the Government of South Australia (2002: 27) canvassed this option: Small business report difficulty in committing stretched resources to cover the role of the HSR. Ways to enable a sharing of HSR resources have been considered. Options might include business groups or employer associations promoting a shared arrangement between willing members. Another option might be through a local arrangement where businesses within a small geographical area come to an agreement to share HSR resources. There have been some successful examples of such arrangements in South Australia, but they have been very limited.
The report was unable to obtain further information on these examples but further investigation seems warranted. A further aspect worthy of consideration is extending the formal capacity of HSRs to represent all workers at a site (including contractors and leased workers) and ensuring HSRs are better aware of their role with regard to non-permanent workers. 7.3 Initiatives in relation to specific work arrangements 7.3.1 Outsourcing/Subcontracting Of all the work arrangements addressed in this report, the OHS risks associated with subcontracting are almost certainly the most widely known and the subject of most agency activity. Subcontracting has been repeatedly linked to safety problems in industries like building for over 100 years. However, the recent growth of subcontracting arrangements both in industries where it already existed (like road transport) as well as its expansion into new areas like healthcare and local government has been associated with wider OHS concerns and has sparked responses from regulatory agencies in both Australia and overseas. The risks associated with contract labour have been raised by government inquiries and reports. For example, a report by the Western Australian Prevention of Mining Fatalities Taskforce (1997) pointed to a close association between a rising level of mine fatalities and the growing use of contract labour in the mining industry. The Taskforce concluded (piii) that ‘provisions to ensure that established occupational safety and health management systems were maintained subsequent to this change were either not made or were not adequate.’ It listed principal employer/contractor interface as the first of eight priority issues that needed to be addressed (p10). The issue of subcontracting had also been identified for attention by agencies as a result of critical incident analysis and targeted auditing. Of all the work arrangements dealt with in this project subcontracting is the only one that is explicitly addressed in the OHS legislation of a number of jurisdictions (such as Victoria and Queensland) via deeming provisions in relation to the obligations of principal contractors (such as s21[3]) of the Victorian Act). Notwithstanding this, aside from several exceptions identified earlier, there can be no doubt that the general duty provisions of OHS legislation of most jurisdictions cover subcontracting arrangements via the duties imposed on employers, with regard to their workers and ‘other persons’ at the workplace (see for example s22 of the Victorian Act) as well as duties imposed on suppliers and other parties. This is not to say that 235 --
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some arrangements such as extensive multi-tiered subcontracting cannot present difficulties for enforcement agencies in practice. Almost all agencies spoken to indicated they were undertaking new initiatives in this area. Senior ComCare officers, for example, indicated contracting and procurement (contracting in services and goods) was a particular issue the agency would be putting attention to over the next 12 months or so. The remainder of this subsection will examine the measures undertaken by agencies in some detail. 7.3.1.1 The Provision of Information, New Codes/Regulations and Collaborative Ventures with Industry Perhaps the most common response to the perceived risks associated with outsourcing/subcontracting has been the production of guidance material advising employers and other parties engaging in subcontract arrangements about the legal responsibilities as well as ways of addressing these responsibilities. From the early 1990s onwards, and more especially the last five years, reference to subcontractors has been increasingly inserted into general advisory documents and agencies have also produced guides specifically targeting contractor management. With regard to dedicated guidance material, in 1995 ComCare (the agency dealing with federal employees) issued a fact sheet on contracting (that largely specified legal obligations) and in 2000 it issued A Practical Guide to Integrating OHS into Effective Contractor Management. These are generic documents providing information to all employers (although in this case they are overwhelmingly federal government agencies, corporations or privatised operations). Most other jurisdictions have not produced generic guides. Rather, they have developed industry-specific guides for industries or sectors of activity where subcontracting was seen to pose a particularly serious OHS risk. Not surprisingly perhaps construction has been the most frequent target of such measures. In Victoria, the OHS problems associated with a state government directive encouraging outsourcing by local government led the Victorian WorkCover Authority to commission and produce a specific guide, Managing Contractor Health and Safety Risks: Guidelines for Local Government (1996) in the mid 1990s. One indication of the shortage of material was that (according to one of staff involved) the agency received numerous requests for this document over a number of years from local government authorities in other Australian jurisdictions and even New Zealand. Indeed, employers in other industries including an airline also requested copies of the document. The officer argued the document had acted as a starting point for employers developing policies and had: …certainly set the scene in Victoria, especially that this is what our expectations was and you cannot ‘write out’ occupational health and safety in contracts…’you still have the responsibility’ was a message that I think was very much picked up.
While a number of other examples could be cited the production of industry specific material has been essentially ad hoc. In no way could it be claimed that guidance material has been produced for all industries where subcontracting is extensively used or even where such use is already known to have serious consequences for OHS. Further, while industry specific material may prove to be more relevant and user-friendly than generic material it is arguable that generic material is better than having no information at all, especially as interviews with 236 --
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Industrial Reference Groups for this project indicated that subcontracting was a matter of concern to employers, unions and insurers in a large number of industries. Aside from the question of the availability or coverage of guidance material there is also a need to consider the quality of such material. Most early material took a ‘law and rules’ approach of pointing out the obligations of various parties (principal contractors, subcontractors etc) under OHS legislation and indicating some rules or procedures that should be implemented to minimise safety risks. The Victorian Managing Contractor Health and Safety Risks: Guidelines for Local Government is case in point. This lengthy guide places a strong emphasis on legal compliance and, like the contractor safety management regimes advocated by a number of lawyers, focuses on the tender/contract process as the primary mechanism for implementing controls on contractor behaviour. This approach can be viewed as a consistent and appropriate response to the circumstances that gave rise to it and the nature of the employers concerned. The guide also contains a number of valuable examples or case studies to illustrate problems. Likewise, ComCare’s (2000) A Practical Guide to Integrating OHS into Effective Contractor Management also places particular emphasis on the tendering/contract process (with sections on contract specification, tender evaluation and contract management). This guide demonstrates the benefits of accumulating knowledge on contractor management as well as the increasing focus on OHS management systems, and the need to integrate the former into this. For example, the guide contains useful suggestions on what are reasonable expectations with regard to small short duration contracts (like repairing a single item of equipment) and the auditing of contractor management systems that borrows from the Victorian WorkCover Authority’s audit tool, SafetyMAP. Details on legislative obligations have been moved to the back of the document. As with the Victorian local government guide, ComCare officers interviewed saw the guide as especially useful in combating the presumption amongst agencies that contracting out services also meant removing that agency’s legal obligations in relation to the OHS effects of these arrangements. In short, these guides contain valuable information and there is evidence that the quality and practicality of the documents is improving over time. Nevertheless, they also contain a number of flaws or weaknesses. First, it can be argued that the guidelines fail to really identify the risk factors associated with subcontracting that typically give rise to OHS problems (see chapter 3). As argued elsewhere in the report, rules and procedures established without any understanding of why these risks arise can prove ineffective. Putting it another way, providing examples of common risk factors associated with this particular type of work arrangement will assist organisations in identifying the problems upon which they should focus their attention and the types of remedies most likely to prove effective. This is the case not simply when dealing with subcontracting but with regard to other issues where work organisation can exert a critical influence (such as labour leasing, home-based work and occupational violence). The need to move beyond rules and consider risk factors has begun to be addressed in more recent documents/information strategies both here and overseas (see the recent NIOSH guide on occupational violence in hospitals) but still remains a common deficiency. Risk factors associated with subcontracting are well known and in some respects a number of employers, industry groups and management information services like CCH have been faster to incorporate this into their advisory material. For example, as mentioned in the next chapter, the Minerals Council websites in several states contain contractor management guidance material that makes specific reference to need to take account of economic incentives for subcontractors to cut corners on OHS. 237 --
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Second, the focus on tender/contract-based mechanisms in the abovementioned guides may be appropriate where government agencies are the primary target (as is the case with both these guides) but maybe an approach of limited value in industries or amongst groups of employers lacking the formal tendering rules and processes that apply to government and their agencies. Even with regard to government agencies other control devices and techniques need to be considered. The guides just referred to largely ignore a wide array of other remedies/tools (see next chapter) that can be used to manage contractors. Agencies are progressively learning to refine their guidance material. One agency interviewed referred to an industry guide it had withdrawn and was currently revising on the basis on concerns with regard to its value. It was noted that some employers and employee representatives had wanted a code on subcontracting to be prepared but the agency staff member involved was not sure this was going to prove a workable option. At the same time, other criticisms remain. Guidance material still overwhelmingly focuses on safety issues. While the use of subcontractors can entail serious health risks (where, for example, subcontractors cut corners in relation to the handling of hazardous substances or where they unknowingly handle or work in proximity to hazardous substance) this aspect is hardly ever raised even in passing (let alone using illustrative case studies). Occasionally this aspect is picked up indirectly (as in the case of guidance material and licensing of asbestos removal) but by and large a substantial gap remains. This gap has only been partly addressed by the inclusion on outsourcing/subcontracting provisions in general OHS guidance material. Inclusion of reference to subcontractors in general OHS guidance material was at first confined to identifying the issue as a relevant consideration and indicating the host employer should have some mechanism for ensuring subcontractors met OHS standards. For example, the Queensland Division of Workplace Health and Safety Audit Program (no date:8) specified there should be evidence the employer “requires suppliers/subcontractors to conform to nominated health and safety standards” at three stages namely, before the contract was signed, prior to the commencement of work and during the progress of work. It also identified the need to ensure compliance with standards. Government departments involved in using substantial number of contractors in hazardous activities like construction have also produced their own guidance material. For example, a Capital Works Investment OHS&R Management Systems Guidelines Capital Project Procurement Manual (New South Wales Government, no date, 2nd edition) produced by the Department of Public Works identified subcontracting and purchasing as a key element, stating that “substandard materials, poorly maintained leased equipment, or substandard work could cause serious accidents (sic).” The manual (p9-10) specifies that contractors must be able to demonstrate not only their own commitment to occupational health and safety and rehabilitation (OHS&R) but also that subcontractors and suppliers have been selection on the basis of their ability to comply with OHS&R requirements, how the ‘interface’ with subcontractors/suppliers is to be managed and how the latter’s compliance with these requirements is to be ensured. The manual also provides some practical suggestions as to how this may be achieved including the use of a panel of preferred subcontractors. A related response was for enforcement agencies to introduce programs covering contractors in specific industries in collaboration with industry partners. In 1998, for example, the New South Wales Government entered into a Memorandum of Understanding (via the WorkCover 238 --
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NSW Construction Industry Reference Group) with 17 major contractors in construction to work together to identify and implement OHS best practice. The contractors and employers committed themselves to work with government to improve the industry’s OHS, and make OHS a priority in their organisations. In the construction industry this process is a catalyst for OHS reform in the industry, by establishing a framework and timetable for change for the major contractors, which will flow on to subcontractors. With suitable funding for expert support (most notably staff at the Department of Safety Science at the University of New South Wales) a number of tools have emerged from the process, including a supervising training resource manual (covering the duty of care, risk management, OHS management systems); a ‘Subbypack’ to held subcontractors manage to OHS; a positive performance ‘Safety Meter’; hazard profiles for key work activities; and the development of a safety in design tool. In general this initiative has been well received by both employers and unions, and an evaluation undertaken by WorkCover NSW reached positive conclusions. The key positive findings of the WorkCover evaluation (WorkCover NSW 2001e: 7) undertaken in 2001 were: o WorkCover OHS management system audits for the period 1998-2000 revealed a 25% improvement in the way signatory contractors manage OHS while audits of a broader range of contractors undertaken by the Department of Public Works showed a 7% improvement in the same period; o Improved OHS management by contractors was reflected in an improvement in the claims experience of the construction industry. In the period 1998-2000 the incidence rate for MOU signatories declined by 32% while the incidence rate for the construction industry as a whole fell by 9%. There was an improvement in the claims experience of subcontractors, which had trended upwards prior to 1998 in line with increased industry activity. The rate of decline in the construction industry incidence rate in NSW was greater than any other state or territory in the three years from 1998. At the same time the report (WorkCover NSW 2001e: 8-9) identified a number of ongoing problems, most notably: o
o
o
o
Some contractors are willing to award tenders to subcontractors with untested or poor safety practices. For these contractors, it was current practice for project management to award contracts to the cheapest tender. The savings were then used to ‘manage safety problems’ as they arose. The perversion of ‘risk management’ was broadly recognised as an industry practice.; Poor programming practices are identified as a contributing factor to unsafe working environments. Subcontractors highlight unrealistic scheduling and interfacing trades as a major barrier to improved safety practices. Yet financial incentives and bonuses encourage projects to finish ahead of schedule; Formal documented systems for managing safety have universally improved in their compliance with legislative and management system requirements. However, documented safe work practices do not always translate to actual safe work practices. The research findings indicate that at present a ‘divide’ exists between paper and actual workplace compliance; Management of subcontractors has improved with the standardisation of documentation acceptable to all major contractors. Documented safety management practices have, on average, improved to an acceptable level. However, compliance by subcontractors to documented safe work controls still remains a key area for increased focus and improvement;
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o
o
o
o
Training amongst subcontractor’s supervisors tasked with OHS&R responsibility was identified as poor. Research indicated improvement in this key area was essential to safe work practices; Poor design is identified by overseas research as a key contributing factor in a high percentage of construction industry incidents. Yet this issue is generally not systematically addressed by clients, the design profession or most principal contractors; The legislative regime does not adequately ensure that OHS is considered at the design and planning stages of a project. Extensive European research has identified that two-thirds of incidents can be traced to poor design and planning; Performance measurement techniques are preoccupied with negative outcome measures such as lost time and injury frequency rates. When used in isolation from lead indicators these measures fail to provide accurate performance appraisal from which improvement strategies can be determined.
It is worth noting that several of the points made are entirely consistent with the repeated references this report has made to economic and reward pressures as a critical risk factor in relation to subcontracting and other contingent work arrangements (see also Mayhew and Quinlan, 1997, 1997a). The point on poor design is especially noteworthy, not only because it highlights a deficiency in the implementation of legislation but also because it raises the prospect that poor design contributes to dangerous forms of work organisation and practices – something that may warrant closer investigation. Other problems relate to the need to effectively audit subcontractor management systems (Mayhew and Quinlan, 1997a) as well as more general requirements in relation to OHS management such as inadequate management training, the risk of ‘paper compliance’ and inadequate performance indicators (see Frick et al, 2000 and Gallagher et al, 2001). The Report (WorkCover NSW 2001e: 9) also recognised the need to apply the MOU process beyond the first tier of lead principal contractors to the second tier of contracting firms if the improvement process was to be sustained. Again, this is consistent with other references in this report into the particular problems posed by multi-tiered subcontracting and the need to develop strategies that follow every link of complex chains of contractual arrangements. In considering the application of the MOU process to other industries the Report concluded they would be of benefit. However, their success would depend of the level of common interest amongst employers (in the construction industry the principal contractors used the same pool of subcontractors); an understanding of industry dynamics (in construction, the principal contractors were able exert a critical influence in the supply chain); the alignment of OHS initiatives and programs (in construction the MOU aligned with the government’s OHSHS auditing program); the availability of adequate research and support to facilitate the project (in construction staff at UNSW developed a number of critical tools) and achieving an adequate balance between government facilitation and industry ownership of the initiative. It should be noted that the Construction Industry Reference Group identified subcontracting as a priority issue from its very establishment and it has undertaken a number of other developments in this area. For example, in 2001 the IRG developed an OHS guide for contractors engaged in railway construction and maintenance as well as developing information sessions to promote this (WorkCover NSW 2001g: 3). The NSW construction industry MOU initiative has helped to inspire similar developments in other industries. For example, the IRG covering utilities has issued a discussion paper on managing contractors (Industry Reference Group 13 – Utilities, 2001) that canvasses a 240 --
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number of options including a requirement for establishing contractors to have an OHSMS as part of utilities contracts and the establishment/auditing of an industry-based accreditation scheme. As with much guidance material already discussed, the discussion paper adopts a legal contractual approach that fails to consider all remedies or to tie proposed remedies to an examination of the relevant risk factors. At the same time, a particular strength of the approach is its industry focus (including industry involvement), which means the interventions are informed by an understanding of specific features of the industry. The Industry Reference Group structure (and equivalent bodies in Queensland) provide a critical conduit for such developments though given the limitations just identified there should also be scope for some generic input. A similar though more broadly focussed process to the NSW construction industry initiative (ie taking in housing and other construction activities) occurred in Queensland, using the special general duty provisions relating to principal contractors in the construction industry. The initiative followed a change to the Workplace Health and Safety Regulation, (effective 1 January 1997) that required all principal contractors and subcontractors to develop a ‘workplace health and safety plan’ prior to starting work on a building or construction site whenever the project cost exceeded $40,000. The tripartite Building Workplace Health and Safety Industry Committee (the equivalent of Industry Reference Groups in NSW) supported their introduction. The risk assessment requirement is most strongly outlined in advisory standards, underpinned by requirements detailed in the Workplace Health and Safety Act 1995 (s.22). Failure to comply with the requirement for completion of a health and safety plan is an offence. Model health and safety plans focus on risks inherent in specific building industry work processes, and are tailored to each of the major sub-sectors (civil, commercial and housing), and for different occupational groups, for example, bricklayers. Model plans were developed in conjunction with the Division of Workplace Health and Safety, involving the translation of voluminous and complex laws and standards into simple but focused guides for risk assessment and control. The plans assist builders to address hazards and risks on their sites, to assess risks associated with individual tasks, to meet their obligations under a selfregulatory model, and to improve injury and illness outcomes. Further, the plans have to be discussed with, and provided to, others on site. The work plans are essentially formalised risk assessment sheets that have to be completed and signed off by individual contractors and subcontractors before work tasks commence. The first formal evaluation of the health and safety plans requirement was conducted in 1997 amongst small-scale builders in the housing sector (see Mayhew et al. 1997c). The study evaluated whether the health and safety plans had been implemented uniformly across the small-scale housing sector, if their use had an effect on OHS prevention, and if there were variations in uptake according to economic conditions or location. The study found the workplace health and safety plans requirement was better accepted: (a) where the relevant industry association actively supported them; (b) when the industry association developed standardised contracts with the work plans requirement integrated; (c) where building contractors had frequent contact with the local OHS jurisdictional office – and even particular Inspectors; (d) when customers included work plan clauses in their contracts; and (e) in nonmetropolitan areas where the industry association held regular ‘road shows’ (Mayhew et al, 1997c:160). On the other hand, plan requirements was poorly accepted when: (a) small-scale builders did not belong to an industry association; (b) builders refused to believe that the requirement applied to small sites; (c) when economic and time pressures were so acute that requirements were knowingly breached to win tenders and ensure survival of the enterprise; (d) when ignorance of the requirement was claimed; (e) where benefits were so obscure to 241 --
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builders that only nominal acquiescence, rather than commitment, resulted; (f) when contractors worked solely on very small jobs or maintenance work which was excluded from the requirement; (g) where builders were genuinely unaware of them (for example in isolated areas); and (h) where the OHS Inspectorate focused their efforts on enforcement strategies (Mayhew et al, 1997:160-161). Overall, the first evaluation study identified that increased implementation of the health and safety plans, improved levels of knowledge about the OHS law, more frequent inclusion of OHS clauses in contracts, heightened awareness of hazard and risk reduction strategies, and use of checklists were inter-related. Where one of these variables was at an improved level, the others were also usually more frequent. The converse also applied. The inclusion of OHS clauses in contracts was found to be of core importance and was increasingly common over time – and builders complied, if only to get the work. Inspectorate activities conducted in conjunction with an employer building association were crucial precursors of improved compliance. Of significant importance, increased use of health and safety plans was found to be correlated with the reduction of injury. (However correlation is not necessarily the same as causation.) The independent variable identified was the intensive combined interventions by the OHS Inspectorate and the industry association working together in a collegial manner assisting individual small-scale builders (Mayhew et al,1997:179). After the health and safety plans requirement had been in place for two full years, Richard Johnstone undertook a more in-depth evaluation. He concentrated attention on the opinions and experiences of Inspectors, obligation holders from larger construction firms, and policy makers. A detailed summary of the development and implementation of the work plans requirement can be found in Johnstone (1999a: 33-38; 100-110). Significantly, Johnstone (1999a:x) found that inspectors working in this industry sector did not uniformly support selfregulation. Many also identified inadequacies in their training to implement and assess completed health and safety plans, and a lack of consistency in inspection strategies. As a result many Inspectors had difficulty in ascertaining compliance, particularly if an obligation holder had prepared an inferior work plan (Johnstone, 1999:xi). Smaller operators tended to have the lowest levels of awareness and implementation of the health and safety plans requirement (Johnstone, 1999a:x, 5). Indeed, many would have preferred a more prescriptive approach. Many obligation holders only complied because principal contractors enforced the requirement, or because of contract clauses. Nonetheless, as Johnstone (1999) identifies, work plans document the risk assessment process, and therefore provide evidence as to whether (or not) the parties have complied with their obligations under the general duties, the regulations, and the advisory standards. The criticism that is probably most crucial is that many obligation holders adopted a ‘tick and flick’ approach to completing health and safety plans, without cognitive involvement (Johnstone, 1999a:x, 70). That is, some obligation holders did not mentally involve themselves in formal risk assessments and merely completed the work plans by ticking boxes in a lip-service or ‘donkey vote’ fashion, rather than considering the issues. In the words of Johnstone (1999a:xi), this: ‘…frustrates the purpose of the work plan requirement, and compounds the problems of implementing the self-regulatory model in the construction industry’. Further, it should be noted that while health and safety plans facilitate a risk assessment process and provide some evidence that an obligation holder has taken steps to minimise OHS risks, they: ‘… do not in any way provide a principal contractor, selfemployed person or an employer with an argument that by doing a thorough WHS work plan, the obligation holder has complied with all obligations under the WHSA and WHSR’ 242 --
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(Johnstone, 1999a: 178). That is, parties still have to ensure compliance with each regulation etc – doing a work plan does not ipso fact mean that the general duties and regulations are complied with. The quality of the documented risk assessment process and evidence of control measures implemented is therefore of crucial importance. Nevertheless, Johnstone (1999a: xi, 111) concluded the health and safety plans requirement was effective in improving awareness of OHS, and that there was a potential correlation with a fall in workers’ compensation claims, particularly from those on larger sites where such insurance cover was more common. ‘…where the work plans are being used properly, with vigorous implementation and enforcement by WHS officers, they appear to be reducing workplace injuries’ (Johnstone, 1999a:112). More recently, an inquiry into the construction industry in Queensland found the plans were a good first step but recommended that they should be taken to the next level in terms of plan requirements and content (Queensland Building and Construction Industry [Workplace Health and Safety] Taskforce, 2000). Regulations to achieve this were introduced in 2002. The regulation places more demands via the work plan on the principle contractor while simplifying compliance for subcontractors by confining their responsibility to preparing work method statements for managing hazards in relation to those tasks they bring on site (tasks that for many, as in the case of a bricklayer, will be essentially the same at each site where they work). The work methods statements of various subcontractors must form part of the overall safe work plan administered by the principal contractor (the requirement, in turn, is confined to high risk construction activities). This reflects a growing awareness amongst regulators of directing their enforcement efforts to the top of the ‘food chain’ (essentially the same approach informs the NSW MOU/Subbypack initiative). There is also a learning process whereby, as knowledge improves, attention can be directed at the most serious hazards and possibly trimming out less essential matters that might otherwise deflect attention or encourage ‘tick and flick’ behaviour in relation to long and undifferentiated (in terms of risk) hazard checklists. Agency staff in Queensland indicated that this progressive improvement process had already occurred in relation to the work plan/work methods statements. The real strength of the Queensland approach is that it addresses more fracturing and disorganised areas of the building industry such as house building while the NSW initiative is, at this point, tied to major construction firms. On the other hand, at this point Queensland has not given consideration to extending the work plan approach to other industries whereas in NSW significant initiatives in relation to the management of subcontractors (using a MOU and other devices) are being developed by a number of Industry Reference Groups (such as that covering hospitality). It is also worth noting that a central recommendation of the NSW Inquiry into safety in long haul trucking (Quinlan, 2001) was the introduction of a safedriving plan, analogous in many respects to the work plan being used in the Queensland construction industry (and discussed in more detail below). Given the scope of this industry, this recommendation along with others, is being considered by a number of jurisdictions outside of NSW. Overall, evidence from the building industry in both NSW and Queensland indicates that both mandatory requirements/performance measures in terms of subcontractor OHS or the requirement for safe work plans can be at least partially effective in addressing some of the problems raised by extensive use of subcontractors. As yet, these initiatives only involve a handful of industries where subcontracting arrangements are 243 --
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pervasive (predominantly construction). A particular strength of these approaches – both in the eyes of those involved and in terms of assessments of them – has been the active involvement of industry and unions in their design and implementation. At the same time, these measures can be and indeed are readily incorporated within the existing legislative framework (notably the general duty provisions and associated regulations such as those dealing with risk assessment in NSW). They also complement the growing emphasis on risk assessment and control that has been adopted by most if not all OHS regulators in Australia (reflecting a similar if earlier trend in the EU) and that is arguably an articulation of general duty requirements (and specific regulation in the case of NSW). Hence, they can be the subject of enforcement activity by the relevant agency. In other words, this approach combines the benefits of collaboration and enforceability. This provides the potential for a powerful and dynamic remedy where requirements are raised and more precisely targeted (as has already occurred with the work plan in Queensland) and audit/enforcement activity is used to reinforce the message (targeting, for example, the most serious areas of non-compliance). The strength of an industry-wide approach such as has developed in the building industry is that it is liable to secure the involvement and support of key players because they are more likely to see benefits in the venture. Individual employers are also less likely to fear being undercut by less scrupulous operators because an industry specific approach, especially when accompanied by a degree of regulatory mandating and enforcement. Proposals consistent with this are being considered in other industries. For example, in the NSW Department of Mineral Resources has been given consideration to the introduction of a general induction passport system (covering both coal and metalliferous mining) for contractors that might be extended to all mineworkers. As noted in the next chapter, the industry itself has been experimenting with generic passports but a scoping study undertaken by the Department (NSW Department of Mineral Resources, 2001) indicated there was significant support for a more universal scheme. The report (2001:2) found that: …a combination of a card system, incorporating photographs, registration or license, printed credentials and bar-code, together with a simple database which recorded basic details of the Contractor and the training successfully completed, could be implemented for the passport system…The registry needs to be managed centrally for data entry and enquiry, but could allow either centralised or decentralised issue of the Passport card following registration of the inductee's training…In order to flourish, the Generic Induction Passport would have to be managed by a single entity, and the NSW Mining ITAB has expressed in principle agreement to hosting the passport system provided it was implemented universally and there was regular income stream to support these additional functions…For the system to meet all of industry's needs, support for submission of contractor induction details on-line (over the internet) and the ability to lookup registration details where a contractor's card is not available, is required…After registration the training provider would receive a registration authority or number from the central registry which would be printed on the Passport card.
The generic induction would be integrated with company and site specific induction. What should be noted is the universality guaranteed by mandatory model. At the same time, it needs to be noted that this initiative only deals with induction not the general management of OHS. Research of 50 mine-sites undertaken by the CFMEU indicated that in general contractors placed fewer controls on shifts and hours of work than those applied by the principal operator 244 --
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to the core workforce. If confirmed, this finding would suggest that other issues may need to be addressed/ Industry specific collaborative ventures between regulators and industry groups have been tried in a number of other countries. In the USA for example, OSHA has signed ‘alliances’ with groups of contractors to promote improvements in OHS, including pre-qualification programs that will satisfy those engaging contractors. One response to the high injury incidence amongst Hispanic workers referred to elsewhere in this report has been for OSHA to sign an alliance with the Hispanic Contractors of America. Amongst other things the alliance will entail encouraging bilingual workers taking train-the-trainer classes so they can teach construction OHS courses in Spanish (OSHA Quick Takes 1(2) 1 April 2002). In concluding this subsection it is important to identify a serious omission from most remedies developed to address the problems posed by subcontracting, namely the almost complete preoccupation with safety to the exclusion of health risks. There is no reason to believe the risk factors associated with subcontracting, or other contingent work arrangements for that matter (such as economic/reward pressures leading to corner cutting or disorganisation), will only have adverse safety consequences. Indeed, it is reasonably easy to postulate scenarios entailing adverse health outcomes (such as the mishandling of hazardous substances due to corner cutting, disorganisation/lack of control and poor monitoring, or the outsourcing of high hazard exposure activities). Unfortunately, this aspect of the OHS effects of subcontracting has been almost entirely ignored. An important exception is a detailed qualitative study of subcontracting in the French nuclear power industry undertaken by Thebaud-Mony (2000), based on extensive interviews with subcontract workers and other parties. Thebaud-Mony (2000) found that the 20,000 and 30,000 subcontract workers (appositely called exteriors or external workers) entered into the nuclear industry every year to carry out essential maintenance tasks sustained more than 80% of the annual aggregate irradiation dosage for the entire workforce. Thebaud-Mony (2000) argues that the subcontracting process established a social division of labour and a parallel division of risk. The book documents how the subcontracting of work and risks endangered the health of external workers at the same time as it fragmented knowledge of the linkages between the nuclear industry and health. While the nuclear industry may be seen as an extreme there is no reason to believe that higher levels of exposure to hazardous substances is confined to this industry. Indeed, examples cited in later chapters of this report indicate the attendant health risks associated with subcontracting can be identified in other industries. Given the potential ramifications of this omission there is an urgent need for more research into the extent of such problems and remedies that might be employed to address them. 7.3.1.2 Targeted Prosecutions and Enforcement regimes Another agency response to growing concerns about serious incidents involving contractors was an increasing level of prosecutions. Agencies have generally targeted the major contractor though in some cases both the principal contractor and the subcontractor and even sub-subcontractor were prosecuted for breaches under the general duty provisions. For example, in 2000 George Weston Foods was fined $120,000 for breaches of the New South Wales Occupational Health and Safety Act 1983, after one of its employees entered a shed, fell into an open pit and was fatally injured. The shed was unlit because the subcontractors of 245 --
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contractors engaged by George Weston to do cleaning work had disconnected the internal overhead light in the shed from the power supply outlet. In 1998 the subcontractors were fined a total of $17,000 and the contractors, in 1999, a total of $19,000 for contraventions of the legislation. In another example, a principal contractor, Kayuu Pty Ltd, was fined $65000 for breaches of the New South Wales Act when it failed to co-ordinate the activities of various trade contractors at a building site, resulting in injuries to a worker (WorkCover News, 2000, 22-23). As the George Weston case indicates, the allocation of shared responsibilities or structured duties is reflected in the degree of culpability and penalty imposed on particular parties even where multiple prosecutions occur as a result of the same incident. The onus on the principal contractor to provide an overarching management of OHS on site normally results in them facing the more significant penalty. In May 2002 Sydney Water (and its subsidiary Australian Water Technologies), the contractor Leddone Constructions and a self-employed project manager a total of $262,500, $180,000 and $16,000 respectively following an incident where a fitter drowned and others narrowly escaped after a pipe they were inspecting suddenly filled with water at the Mount Kiera Reservoir (Occupational Health News Issue 513 1 May 2002 and WorkCover Authority of NSW [Inspector Clark] v Raymond Jabboury (No.2) [2002]). In the same year Transfield, a contractor (Worley Pty Ltd) and a labour hire firm (Manbead) were fined $110,000, $70,000 and $55,000 respectively after an incident where a leasedlabourer sustained burns and shock when a crowbar he was using struck a high voltage electric cable (WorkCover Authority of NSW [Inspector Milligan] v Transfield Pty Ltd. [2002]; WorkCover Authority of NSW [Inspector Milligan] v Worley Pty Ltd. [2002]; and WorkCover Authority of NSW [Inspector Milligan] v Manbead Pty Ltd. [2002]). In some circumstances the allocation of responsibility is deemed as more evenly shared. In 1995 similar fines were imposed on Concrete Construction Group Pty Ltd and its subcontractor Pilkingtons when the Victorian WorkCover Authority successfully prosecuted them after an employee of the latter suffered a fatal fall when engaged in glazing work with no scaffolding, harness or other fall protection (see The Queen v Concrete Construction Group Pty Ltd [1995]. For a similar outcome in a Queensland case see CCH OHS Alert March 2001: 4). The issue of co-ordination has arisen in other cases, one example being a Victorian prosecution in which the principal contractor, AB and MA Chick Pty Ltd, was engaged by the army to construct a vehicle workshop. The principal contractor subcontracted concreting work to Dynamic Engineering Construction Company Pty Ltd, which in turn engaged Graham Hallett and his partner Christopher Ross as the concrete pumping operators. A self-employed worker was electrocuted after the principal contractor had failed to arrange for the power to be turned off during the operation, and had failed to attend to other safety matters. The magistrate commented that the principal contractor should have arranged a meeting of all concerned parties to co-ordinate activities, and, being in overall control of the activities, had substantial responsibility to ensure that the incident did not happen. Dynamic Engineering had failed to check the qualifications and training of key operators, and had failed to ensure other safety matters. Hallett, though absent at the time of the incident, should have taken adequate measures, such as ensuring an observer was on site. Ross, the operator of the boom pump that had caused the incident, had inadequately earthed the truck, and had not been trained. Each party was convicted and fined for contravening the employer or self-employed person’s duty to non-employees discussed above. Other jurisdictions have been keen to emphasise the shared responsibility of various parties and the need for co-ordination in subcontracting arrangements through prosecutions of 246 --
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multiple parties for breaches arising from the same incident that are then suitable publicised. For example, the Queensland Division of Workplace Health and Safety secured convictions against Rolls Royce (Australia) Pty Ltd and a contractor working following an explosion that injured several workers during the installation of a boiler at the Amcor Packaging Mill at Petrie in December 1999. Amcor was also convicted. The Magistrate found all three had failed to ensure a safe system of work by maintaining an exclusion zone. He noted that while the contractor had raised concerns about the presence of workers close to the boiler these concerns had not been communicated to Amcor. In this case Amcor and Rolls Royce received a similar fine (the fine to the contractor to Rolls was lower. Safety Zone Feb/March 2002:15). While the facts of each case will determine relative culpability regulatory agencies will need to take care that charges and penalties take cognizance of which party had an overarching responsibility for OHS if they are to maintain an effective and resource efficient enforcement strategy. Aside from the issue of coordination/shared responsibility, agencies have been keen to target principal contractors because these parties are generally in best position to alter work practices, given their resources and ability to set constraints on the behaviour of subcontractors. Although the general duty provisions establish the basis for such targeting in terms of enforcement the application of this approach to particular areas has only occurred over time. For example, in September 1999 WorkSafe Victoria charged Topic Builders Pty Ltd with having breached s21 (1),(2)(a) & (2)(e) of the Occupational Health and Safety Axt 1985 by having unsafe scaffolding at a domestic building site under their control. When the case was heard before the Dandenong Magistrates' Court on 21 November 2000 (and the company fined $5,000 plus $6,500 costs) the magistrate (WorkSafe Victoria, 2001: 30) was reported to have noted: …that within the building industry, it had long been the practice that subcontractors were left with sole responsibility for the erection of scaffold. He explained that this was the first prosecution against a head contractor for failure to exercise adequate control over bricklayers' activities since the legislation was introduced in 1985. He said that if the legislation had been enforced "to the letter" since 1985, the responsibilities it impressed would be better known. The magistrate said as the defendant was a guinea pig, he was prepared to ameliorate the penalty significantly and to accede to the defendant's request to be released without conviction. He stressed that the next defendant in similar circumstances could not expect to receive the same leniency.
On the positive side, there is evidence that the identification and careful targeting of key parties in contractual arrangements can achieve a significant change in work practices even in the face of longstanding traditions. A good example is the area of roof tiling where WorkCover NSW targeting tile suppliers who engaged subcontractors to fix roof tiles rather than the subcontractors appears to have brought about a critical shift in work practices, notably the installation of fall arrest systems (see WorkCover Authority of NSW (Inspector Hughes) v Boral Montoro Pty Ltd, [1998] and Thompson, 1999). Over the past five years there can be little doubt that publicised prosecutions of parties in subcontracting relationships has caused a growing level of concern within industry, particularly as until recently relatively few large firms appear to have had an elaborate or effective contractor management system in place. For many, prosecutions demonstrating their liability under general duty provisions came as a revelation. Those who promoted outsourcing, including large management consulting firms and management/industry 247 --
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outsourcing conferences, seldom identified potential OHS problems let alone ways of addressing them (though a contractor management industry quickly mushroomed as the risks became apparent). Enforcement action against principal contractors and contractors has also been taken using administrative sanctions, particularly improvement notices (a notice requiring a contravention to be remedied within a specified time), prohibition notices (requiring an activity presenting an immediate risk to any person to cease pending the removal of the risk, and infringement notices (on-the-spot fines). For example, late in 1999 a principal contractor in New South Wales had a total of $9000 of on-the-spot fines imposed upon it after an inspection which revealed hazards such as missing handrails, protruding steel bars, scaffolding contravening the relevant Australian Standard, inadequate lighting in stairwells, and failure to ensure adequate supervision of employees (CCH Managing Contractors, 1999: 3). In addition, a number of contractors have been prosecuted for under the ‘mainstream’ criminal law for manslaughter, following fatalities resulting from the contractor’s gross negligence. For example, in Victoria in 1994 a small family company, Denbo Pty Ltd, operating as a earth moving contractor, was convicted of manslaughter after an employee died of head injuries after a truck with defective breaks went out of control down a steep track. In 1999 the sole director of a company in Queensland was gaoled for manslaughter after a subcontractor died while driving a scraper with faulty brakes. In 2000 the Victorian OHS inspectorate (now known as WorkSafe Victoria) adopted a strategy of ‘zero tolerance’ in the construction industry to try to prevent repeated noncompliance from site to site. The inspectorate will issue notices for each breach detected. Where the inspectorate detects non-compliance with improvement or prohibition notices, or where it finds repeat contraventions on the same or another site, it will conduct an immediate investigation for the purposes of prosecution. The inspectorate has begun to use tools like spreadsheets track notices issued to contractors and subcontractors, so that it can keep better records of contraventions by contractors and subcontractors from site to site. In late 2001 WorkSafe Victoria also conducted a blitz (in conjunction with Victoria Police) on garbage depot safety, including the trucks used by waste disposal contractors (engaged by municipal councils and other parties) with inspectors uncovering a number of substandard vehicles (with over 14% of those inspected being deemed unroadworthy). WorkSafe’s executive director noted that too little had changed since the death of a worker at a depot in 1998 (NSCA’s Safety Bulletin No.89 December 2001). Overall, there was a general recognition amongst regulatory staff from virtually all jurisdictions that, without ignoring shared responsibility (ie the involvement of other parties) and the facts of each case, as a general principle prosecution of organisations at the ‘top of the food chain’ in terms of subcontracting was more likely to represent a cost-effective means of sending a message and encouraging meaningful change. Our cursory examination of prosecutions suggested the practical implementation of this approach is more apparent in some jurisdictions than others. In the case of Tasmania efforts to pursue this approach have been inhibited by limitations to s9(4) of the Workplace Health and Safety Act 1995 referred to in Chapter 5.
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7.3.1.3 Controls on Government Contracts Another, more selective, method to try to secure OHS standards in relation to subcontracting/outsourcing has been by governments prescribing that suppliers meet minimum labour and OHS standards as a pre-requisite for tendering for or retaining government contracts. This device has been used by governments both in Australia and other countries like the USA, although the level of compliance with such requirements is often the subject of some dispute (Johnstone et al 2002). In the United States there have been legislative attempts to ensure that those tendering for government contracts abide by minimum labour standards over a number of years, although, as in other countries (like Ireland), the momentum behind such measures appears to have increased in recent times. Section 35 of the federal Walsh-Healey Act (1936) on Public Contracts required that in relation to any contract made with a federal agency and department worth more than $10,000 the contractor must abide by minimum standards in relation to wages, hours or work and the employment of child labour. Federal (and state and municipal) contract or acquisition regulations may include tender requirements to comply with OSHA standards and some contracts even require a period free of OSHA violations. In 1991 an accident prevention clause was inserted into the Federal Acquisition Regulations, placing a duty on contractors to maintain work environments that safeguarded the public and government personnel. However, according to OSHA (1997) federal and state regulatory requirements to accept the ‘lowest responsible bidder’ has resulted in the awarding of contracts to firms with a poor OHS records or firms that deliberately under-bid and then cut costs by methods such as targeting OHS compliance: Unless the contract scope of work establishes the contractors specific safety obligations rather than simply stating a broad, ambiguous and difficult to enforce requirement to “comply with all applicable safety regulations”, or the definition of “responsible” does not include an acceptable safety record, the public agency may be hamstrung by their own legislative language” (OSHA, 1997).
The OSHA document goes on to cite instances where unsafe contractors have caused costly delays in projects as well as expensive litigation where their actions result in property damage or injuries to third parties. The latter has also aroused concerns amongst municipal governments and state agencies in Australia, with the Victorian government issuing a contractor management manual in response to problems associated with competitive tendering requirements for local government (see below). For its part, OSHA recommended that agencies obtain the past violation history of applicant contractors which may reveal misrepresentations that could be used to debar them. In several states, notably Connecticut and Maine, laws preclude firms being awarded government contracts (for three and two years respectively) where they have convicted of willful or serious safety violations (Johnstone et al 2002). In November 1994 a bill was placed before the New Jersey Legislative Assembly that contained a similar debarment process while also proposing that 10% bid allowance be given to firms with an exemplary OHS record. In December 1995 a Bill to amend the federal Occupational Safety and Health Act (Federal Contractors Safety and Health Enforcement) Act of 1995 proposed that any person or entity ‘with a clear pattern and practice’ of violating OHS legislation be debarred from federal contracts for a period of three years. This Bill received support from a number of professional bodies including the American Industrial Hygienists Association (Johnstone et al 2002). 249 --
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Responding to a congressional request, the United States Government Accounting Office (1996) examined compliance of federal contractors with OHS regulations for the year 1994 (a year the US government spent US$176 billion on outsourcing goods and services). The report confirmed that contracts were being awarded to firms violating OHS regulations with penalties totaling US$10.9 million. It identified 261 federal contractors with contracts worth US$38 billion who had been fined at least US$15,000 for violations identified in 345 worksite inspections (the average violation penalty imposed was US$32,000 and 8% of the firms had been fined in excess of US$100,000). Indeed, federal contractors were responsible for 16% of all significant penalty inspections. Common violations included failure to protect workers from electrical hazards (11% of violations) or provide proper machine guarding (10%). In 88% of the inspections OSHA classified at least one violation as serious (ie posing a risk of death or serious harm to workers). Fatalities (35) and serious injuries requiring hospitalisation (55) occurred at the work sites of 50 contractors. In 69% of inspections OSHA inspectors identified at least one willful violation (ie a violation intentionally and knowingly committed). In 29 (8%) of the inspections contractors were cited for repeat violations. Around 68% of the work sites where violations occurred employed fewer than 500 people, although in some cases the employer concerned was very large (such as the United Parcel Service that employs 285,000 workers). Violators included large contractors, with 5% receiving more than US$500 million in contracts. Over half the violators were engaged in manufacturing with next most significant category being construction. The report concluded that OSHA and contracting agencies should: ‘develop policies and procedures to facilitate the exchange of information that would increase the likelihood that a company’s safety and health record is considered in decisions to award a contract or suspend an existing contractor. The prospect of debarment or suspension can provide impetus for a contractor to undertake remedial measures to improve working conditions. OSHA could also emphasise the importance of contractors’ complying with safety and health requirements by considering whether and how an employer’s status as a federal contractor could be used in setting priorities for targeting inspections’ (United States Government Accounting Office, 1996).
It also recommended OSHA give inspection priority to high hazard workplaces operated by companies receiving federal contracts. It recognised that this would place additional demands on OSHA’s limited inspectoral resources. The last problem affects most other OHS agencies as they try to respond to the implications of the growth in outsourcing, including those driven by policies of placing government activities out to competitive tender. In one of its last acts the Clinton administration issued new rules to take effect from 19 January 2001 strengthening the vetting process so contracting officers will scrutinize companies' records of compliance with labour, environmental, civil rights, consumer, tax and other laws before awarding government contracts. Those found to have a record of routine violations risk being found ‘non-responsible’ and disqualified from the contract under consideration. However, business groups, including the Chamber of Commerce and National Association of Manufacturers, immediately challenged the rules in the federal court. Eleven days into his term, President George W Bush suspended the “responsible contractor rule.’ A prominent recent Australian example of using this device is in relation to the provision of clothing. As the primary target here were home-based workers this particular case will be discussed in a later subsection of this chapter. Leaving this case aside, a number of jurisdictions discussed this requirement. 250 --
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In Queensland, principal contractors and businesses doing work for government are required to maintain or develop a higher standard in terms of their OHS system than is required by law. As in New South Wales, those tendering for government-building projects must have an OHS management system that includes provisions covering contractors/subcontractors and others coming onto the site. Similar though more generalized and less demanding requirements are being introduced into government purchasing guidelines. The Queensland government is also considering giving effect to a code of minimum standards on telecall centres. 7.3.1.4 Mandating Minimum Standards As already noted in some industries at least elaborate subcontracting chains are associated with intense competition that has encouraged the evasion of OHS and other regulatory standards that affect safety (like those pertaining to hours of work and wage rates). In several of these industries consideration has or is currently been given to creating, extending or reconfiguring existing minimum standards regimes so as to make them less susceptible to evasion that compromise safety (often along with other socially deleterious effects). The Inquiry into the NSW long haul trucking industry identified subcontracting and related commercial pressures as posing a significant threat to safety and made four proposals in relation to minimum standards. First, the introduction of a safe driving plan to replace the existing logbook system used in most jurisdictions and to provide, amongst other things, a more effective basis for ensuring compliance with maximum driving hours/fatigue management regimes. This proposal is currently being pursued through the National Road Transport Commission’s fatigue management and Chain of Responsibility reforms (Australasian Transport News 22 March 2002). Second, the more proactive enforcement of minimum award rates for employee drivers in the long haul sector. Third, the establishment of a minimum ‘safety’ rate under OHS law to be paid to owner/drivers. The responsible NSW Minister, John Della Bosca has indicated that this proposal is still a ‘live issue’ but needs to be pursued at the national level (Australasian Transport News 22 March 2002). Fourth, the inquiry recommended compulsory operator licensing to prevent the entry/continued operation of ill-qualified and heavily indebted operators who compromised safety and because the alternative voluntary accreditation schemes had failed to attract persuasive membership levels or enroll those operators arguably most at risk. The NSW government has rejected this recommendation on cost/effectiveness grounds. However, as of July 2002 Western Australia has introduced Compulsory Heavy Vehicle Accreditation for all individuals or organisations operating non general access vehicle combinations over 42.5 tonnes (still thereby excluding the standard size semi-trailer but including B-Doubles and road-trains). Accreditation requires compliance with both maintenance and fatigue management modules verified through an independent third party audit currently based on the NHVAS Maintenance Management standards (TruckSafe is currently negotiating acceptance of its Maintenance Management Module) and WorkSafe WA Code of Conduct for Commercial Drivers (Australasian Transport News 27 March 2002). 7.3.2 Home-based Work, Telework and Telecall Centres 7.3.2.1 The Provision of Information, New Codes/Regulations and Collaborative Ventures with Industry 251 --
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As noted in Chapter 4, regulatory agencies a number of jurisdictions believed the diversity of work-based work arrangements made it very difficult to produce general guidance material on areas like home-based work. Nonetheless, in 1995 New South Wales WorkCover issued a guide on home-based work. The Queensland Division of Workplace Health and Safety (2000) has produced a guide to working from home. Jurisdictions have also produced more specialized information in relation to areas of particular concern. For example, the Queensland Division of Workplace Health and Safety (2001) has produced a guide for employers of health and community service workers engaged in delivering home-based care. Like many other Queensland guides it adopts an approach based on the hierarchy of controls. The guide states that a risk assessment should be conducted before services are provided (a checklist is included to facilitate this inspection) and that workers should be consulted in the hazard identification, assessment and developing practical controls stage. A specific section is devoted to occupational violence that draws attention to the risks of working with clients with diminished psychological or behavioural capacity (see references to assaults in Part 1 of this report), working alone and working in an environment where another person may pose a risk (though there is a case for even more explicit reference to threats posed by persons in the home other than the client). In addition to dealing with biological hazards, hazardous substances and manual handling the guide also addresses psychosocial issues including excessive workloads, ambiguous jobs roles, harassment, work-relationship problems with supervisors/colleagues, critical incidents, emotional attachment to clients and excessive demands from the employer, clients or others (such as family members). In terms of recommended solutions the guide advocates a multipronged approach that includes equipment, work organisation and administrative controls, including the refusal to provide a service unless or until adequate hazard control measures are in place. Overall, the Queensland guide indicates a good understanding of the particular or aggravated hazards associated with providing healthcare and community services in clients’ homes. Its contents and approach to managing risks is consistent with published international research identified elsewhere in this report as well as knowledge obtained from involvement with the NSW Department of Health taskforce on occupational violence. The real issue perhaps is to what extent the guide has been used by employers to formulate programs for managing OHS in home-based care, and how far the resulting risk management protocols etc have been implemented? As with many other guides and other information strategies, there appears to have been little if any independent assessment of their implementation and effectiveness. Initiatives can also be identified in other jurisdictions. The WorkCover Corporation of South Australia funded a research project to investigate the OHS implications of moving aged-care from the residential care setting to the community. This was used to develop industry guidelines to provide training to employers to set up systems to manage OHS in the community in similar ways to those used to manage workers at the employer’s own premises. Agency staff conceded this was a challenging task and often the control measures were ‘lower order’ because the workplace was now a client’s home (introducing questions of what is logistically possible and the rights of clients). They still believed such measures could still prove effective if the employer was diligent about training staff and providing them with the resources they needed to manage the risks to which they were exposed and if there was not significant levels of staff turnover or re-allocation for visits. Another factor seen to limit effectiveness was the common practice of ‘brokering’ in homecare services, bringing with it 252 --
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in the words on one agency staff member ‘all the complications of labour hire.’ This created a dilemma for the agency although it was noted (by another officer from the same agency) that several labour hire firms providing homecare workers in the areas of mental illness and disability (not aged care) set up contracts with individual families to clarify what was appropriate and not appropriate. Most recently, in August 2002 the Victorian government announced it was to fund a package of safety development projects aimed at reducing workplace claims amongst nurses, homecare workers and ambulance staff. Primarily targeting ergonomic risks, projects included the development of a best practice model for the delivery of district nursing services and the development, with industry participation, new OHS guidelines for homecare workers (CCH OHS Alert, 21 August 2002). A number of other countries are developing material for specific categories of home-based or remote workers that have been viewed as high-risk. In the UK the HSE has recently launched a guide for homecare service workers. The guide was partly in response to the high risk of back injury in the health and services sector although it addresses other issues and case studies to highlight the consequences of poor practice and indicate practical ways of addressing these. In Canada, several provinces have adopted regulations governing working alone (see for example British Columbia, Work Safe, 1998. Occupational health and safety regulation: Core Requirements, Working Alone or In Isolation; Improper behaviour; Violence, sections 4.21-4.23 and 4.24-4.31). As already indicated in this report, government agencies have also become increasingly concerned at the OHS issues raised by telecall centres. Along with Queensland, ComCare was one of the first agencies to commence work on producing a guide on telecall centres that was jurisdictionally specific. However, following a national meeting of the various agencies on the challenges posed by labour market change in 2001 this project was transformed into a NOHSC project with an expanded membership of the ACCI, ACTU and one state jurisdiction (Queensland, that had already produced a document). The working party agreed to use the Queensland document as the base tool. The Queensland document adopted a minimum standards approach (considerable effort had been put into identifying hazards but comparatively little work has been done on control processes) and it was hoped to revise it to take more of an OHS management systems approach. The main hazards identified were musculoskeletal injuries (driven by factors such as hot-desking and shift arrangements), acoustic shock/aural ‘shriek’, stress (workload and monitoring factors) and, subsequently, ‘voice care.’ An attempt had been made to match these with control measures. The ComCare led working party has sought to examine what large employers have done which might be worth looking at. Lessons gained from this have included the proper use of headsets and measures to enhance voice care. At the same, given the limited research on OHS effects of telecall centre work regulators involved saw it very much as a ‘learn as you go’ exercise. In January 2002 Queensland issued a 45-page draft call centre health and safety guidelines document for discussion (Queensland Division of Workplace Health and Safety 2002). This document has a number of strengths is terms of addressing problems raised in this report and could serve as a model for other areas. First, the document contains a precise but expansive explanation of what constitutes a call centre. Second, there is a section on statutory obligations that identifies a range of parties and thereby recognises the intersection of telecall centres with other flexible work arrangements (such as labour leasing and subcontracting) as well as the obligations of each of these parties. Third, especially valuable from a NSW 253 --
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perspective is a chapter on managing risk that adopts and risk assessment/risk management approach – something in keeping with the mandatory requirement for risk assessment in this state. Fourth, the discussion of major hazards in the call centre industry (chapters 4-6) is grounded in a multidisciplinary approach that gives recognition to ergonomic, physiological and psychological factors as well as – and this is critical from a management perspective – work organisation factors such as staffing levels, pace and bonuses; the misuse of monitoring, shiftwork; lack of control over work environment/tasks; and poor organisational support/role conflict. Fifth, one limitation with the document is that it only makes a brief reference to consultative arrangements (and then only to indicate the statutory requirements in relation to workplace health and safety committees and HSRs). More was needed here, especially given the pivotal role of worker involvement in risk assessment and risk management identified by experts like Jean Cross (2000) and also to be found in recent NSW documentation. In addition to the production of guidance material government agencies in a number of jurisdictions are exploring other means for improving the OHS performance of telecall centres. In early 2002, in a collaborate venture with the Australian Services Union and employers, the Victorian government established a development fund of $276,000, The fund will cover the cost of a full-time project officer working with nine major employers over two years to develop a best practice OHS model. The model will be trialed at eight call centres before being made available to the industry (Occupational Health News Issue 507 February 2002: 5). In contrast to telecall centres (and consistent with comments made in chapter 4), this project did not identify any regulatory initiatives in relation to telework. It is suggested some investigative research be undertaken to see whether this constitutes a serious omission. Most usefully, this could form part of a broader project into home-based work where knowledge of OHS performance and regulatory compliance remains, with one or two exceptions, seriously deficient (see below). 7.3.2.2 Controls on Government Contracts/Purchasing and Enforcement Activity In recent years the NSW state Labor government has undertaken a number of initiatives in relation to independent contractors and outworkers. In Feburary1998 the NSW Department of Public Works issued a Code of Practice (NSW Government, 1998) on the employment and outwork obligations of textile, clothing and footwear suppliers. The Code covered all government departments and agencies that were estimated to purchase a total of around $40 million worth of clothing and footwear annually. It required agencies to ensure that suppliers met all minimum labour and OHS standards, including relevant state and federal award provisions on outworkers (provisions in the NSW clothing industry award mirror those in the federal award discussed below). Tenderers were required to provide evidence of compliance with applicable industrial awards and a statutory declaration before a tender could be considered. Agencies were required to monitor performance of selected suppliers, to provide a quarterly report on compliance to the State Contracts Board and establish mechanisms to deal with transgressions from the Code. In order to promote awareness of the Code it was printed in a number of languages (reflecting the largely immigrant workforce) and interested parties were obliged to promote its existence to outworkers. The Code also reinforced implementation mechanisms of provisions of awards, most notably the compulsory registration of contractors and outworkers, the keeping of a record of work done by outworkers, and making this information available to the TCFUA. 254 --
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In many respects the Code mirrored a voluntary Code of Practice that the TCFUA had promoted in the private sector (prior to the NSW government introducing the ‘Behind the Label’ strategy), which had been signed by key industry bodies as well as a number of large manufacturers and retailers. The critical difference was that government mandated compliance with its code and gave a body (the State Contracts Board) the specific task of monitoring compliance. More recently, Queensland has adopted a parallel code and similar measures are under consideration in a number of other states. Thus far, the federal government has indicated no interest in this approach. While such state government codes represent a potential improvement over the previous situation, their implementation continues to pose a number of problems. The most significant problem is the failure to effectively enforce compliance with these codes down through the successive layers of subcontracting. These codes can only operate effectively if there exists a mechanism for tracking the flow of work through these successive layers and a practical means of auditing OHS at the actual sites of production. Authorities in NSW are currently considering the establishment of a dual track auditing procedure involving both regulatory agencies (WorkCover NSW and the Department of Industrial Relations) and duly authorised industrial unions. This dual track approach provides two levels of independent auditing and also mitigates the budgetary/logistical constraints on both state government purchasing agencies (like the Department of Public Works) and regulatory authorities (like the Department of Industrial Relations). It should be noted that unions perform a recognised legal enforcement role in other spheres relating to minimum labour standards and OHS. Indeed it is widely accepted that unions due to bulk of workplace auditing and reporting underpayment and other breaches in relation to industrial award/agreements. Further, unions are authorised to initiate prosecutions under the relevant industrial legislation and in NSW, if not other jurisdictions, they can (and do) also initiate prosecutions under the Occupational Health and Safety Act. The importance of tracking mechanisms and the independent auditing and enforcement role performed by unions has relevance to other industries/work arrangements and remedies examined in this report (see for example discussion of the trucking industry). There are also moves to develop codes in relation to another area of home-based work, namely telework. In December 2001 the Queensland government also issued a Code of Practice for Call Centres to govern the activities of its own instrumentalities/agencies and government-owned businesses in meeting minimum standards in relation to both industrial relations and OHS legislation. Like the draft guide on call centre work referred to in the last subsection the Code has been prepared with some care and is well contextualised (for example it acknowledges that the bulk of employees in the industry are both women and casually employed). Aside from these measures, enforcement activity in relation to home-based work appears to be limited and sporadic. The measures just described could form the basis for a more effective enforcement regime but it should be noted thus far this is only being pursued in relation to clothing outworkers. As noted in Chapter 4, aside from clothing outwork and possibly one or two other areas, regulators appear to have little knowledge of the nature of home-based work and where and how enforcement activities should be targeted. As with small business (see below) there are also critical resourcing issues here. Nonetheless, obtaining a better understanding of the extent and nature of home-based work and the problems its poses in 255 --
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relation to OHS regulation, as well as identifying more effective interventions would be a good starting point. In its recent review of activity in relation to changing employment arrangements the UK’s HSC (2001: 9) came to a virtually identical conclusion, arguing there was need for further research to establish the nature and scale of the problem and how information strategies could best target home-based workers. Several projects undertaken by the HSE in terms of the production and dissemination of guidance material to home-based workers warrant attention (for a short summary see HSC, 2001: 10-11). A report on women and home-based work, recently prepared in Canada (see Bernstein et al 2000), also provides at least a partial model for this (especially in terms of the regulatory and compliance issues). While it is impossible to provide a detailed summary of this report it raised a range of issues that are almost certainly of relevance in the NSW and Australian context, including ambiguity and inconsistency in the application of legislative standards. The report examined the nature and implementation minimum labour standards, OHS and workers’ compensation law and consistent with research into clothing outwork here – and the policy response currently being implemented - it found an interconnection between all three aspects. It is worth quoting from the report’s conclusions (Bernstein et al 2000: 236-39): When home is the workplace, workers often find themselves in a legal limbo, and our study reveals that many ambiguities could be avoided if policy makers addressed the issue of homework as it is practised today. As we have shown, homeworkers’ legal protection with respect to minimum employment standards, workers’ compensation, occupational health and safety and employment insurance may be inadvertently denied or expressly pre-empted. The capacity of homeworkers to organize to advance their collective interests is also limited by existing collective bargaining models. Confusion – on the part of homeworkers, their employers, and government agencies mandated to implement labour legislation – as to whether or not a homeworker is an independent contractor also renders the application of laws and the exercise of homeworker rights more complicated. The gendered nature of homework must be taken into consideration when designing policy and evaluating its impact, since laws which are considered “gender-neutral” can and do adversely affect women. For example, the difficulties encountered by women homeworkers in establishing their status as “employees” have repercussions on their access to maternity and parental benefits under the Employment Insurance Scheme… Similarly…exclusions from workers’ compensation…adversely affects women workers in particular. The same can be said for de facto deregulation of the garment industry through outsourcing and the resulting redefinition of work contracts… As well, before promoting homework as a solution for reconciling family and work responsibilities, further research is needed to determine the actual working conditions, in all sectors, of women who have children and work at home. After analysing the legislative framework, several conclusions can be drawn. There are few legislative examples to suggest that policy makers consciously design a framework that includes the realities of homework. When such legislation does exist, it is often out of date. It does not consider new forms of homework, such as home telework, even though these workers encounter many of the same problems as industrial homeworkers because of their place of work. Since those working in the home seem to have been overlooked by policy makers, the existing enforcement mechanisms in many of the laws analysed are ill-adapted to their reality…We have
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found that homeworkers are sometimes covered (or not covered) by the legislation more as a result of accident than design. Because the laws are not thought through, there are inconsistencies among them with respect to homework, even within a same jurisdiction. …without legislative changes, the costs of working will increasingly be transferred to the homeworker, the individual least capable of shouldering the costs of the risks intrinsic to her work…These workers’ isolation also leads to ignorance of the rights that do exist. Finally, the boundary between women’s “private” and “professional” lives gets blurred when they work at home. Policy makers can improve this situation by adopting clear legislation that enables workers and employers to more easily recognise these boundaries. Minimally, legislation should make it clear that homework cannot be imposed on a worker against her will… More research is needed on a variety of subjects related to homework in Canada, not only from a legal perspective, but from a sociological and economic one as well. The issue of self-employment, which is intimately linked to homework, must be studied in more depth. As jurists, we attempted to point out the ambiguities and misconceptions surrounding their status and their impact on the application of labour and social security legislation for homeworkers. But this was not the primary focus of our study. As self-employment grows, and more and more women (and men) operate their own “businesses” from their homes, the number of people who contribute to employment remuneration-based social programmes will decrease. It is highly likely that many of these workers are in fact “employees” under some of the legislation, but may believe that they are independent contractors. The inconsistencies among laws with regard to a person’s “employee” status have to be examined thoroughly, and changes should be made so that the burden of proving the legitimacy of excluding such workers from the purview of protective legislation be borne by employers. Further, research should examine the possibility of redefining social programmes so that they protect all working people, regardless of their contractual status.
Bernstein et al (2000: 240-47) go on to make a number of specific recommendations relating to self-employment, minimum employment standards, occupational health and safety, workers’ compensation and a number of other areas. For the purpose of this section of the report it is worth identifying some of those relating to the first three areas. With regard to selfemployment their recommendations include a detailed review of inconsistencies in labour and social security laws, shifting the burden of proof that a worker is an independent contractor to the employer and protecting employees including homeworkers from reprisal for refusing to enter into independent contractor relationships. In relation to minimum employment standards they urge that agencies should implement general policies on homeworkers in all sectors, in consultation with employers, unions and community organisations. Provisions should be introduced so dependent contractors and illegal immigrants are explicitly covered by labour standards, employers must keep homeworkers informed of their working conditions and where employers neglect to maintain accurate pay/hours records (itself an offence to be vigorously enforced) entitlements will be determined based on homeworker statements. They recommend that homeworkers be paid a wages premium to cover the costs incurred by working at home (eg where telework is involved), that registries of homeworkers and their employers be established. Further, they recommend that government agencies be suitably resourced to undertake audit and enforcement measures and that a public education campaign be conducted by agencies targeting homeworkers and their employers. With regard to OHS they recommend that legislation should be amended to ensure/clarify that homeworkers are explicitly covered, that they have equal rights to information regarding hazards, OHS training 257 --
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and the right to refuse dangerous work. They also call for special inspection provisions to ensure the right to safe working conditions without compromising the worker’s right to privacy (they make reference to British Columbia’s Bill 14 s181 as a model in this regard). It can be noted that their analysis is consistent with a number of issues raised in this report although it was beyond the scope of this report to examine the legal provisions relating to home-based work in any way near the same level of detail. On the other hand, some of problems Bernstein et al identify (like the legal ambiguity of rights and entitlements for example) this report found to apply to number of other categories of workers (ie not just home-based workers). To be fair, a number of these are associated with the broad category of self-employment and Bernstein point to this connection (see the above quote). The regulatory situation in Canada includes wider inter-provincial differences (especially with regard to Quebec and English speaking Canada) than is the case in Australia. There are also substantial differences between Canada and Australia at federal level (in terms of industrial relations, unemployment and social security systems). At the same time, there are also many similarities (for example between OHS legislation in Ontario and NSW). Further, their reference to the need for tracking mechanisms to follow elaborate supply chains, the reintroduction of workplace registration and the reversal of the onus of proof/use of rebuttable presumption have clear parallels with the strategy already being developed in NSW in the clothing industry (and being considered by other jurisdictions). Thus, while some care is needed in extrapolating Bernstein et al’s findings to the NSW and Australian context, the problems they raise and the remedies they propose have relevance. Bernstein et al's recommendation for further research is also entirely apposite to the findings of this report. Two further points should be made. First, as noted earlier in this report, home-based work has been associated with child labour historically and there is more recent evidence of its re-emergence in the clothing industry. While the NSW government is presently implementing a strategy in relation to this industry that may, indirectly at least, address the issue of child labour. As also noted in Chapter 4, another significant group of children who work 'at home' are those on family farms and rural producers. It would be dangerous, however, to assume that child labour is confined to these area of home-based work. Indeed, during the course of this project one senior regulatory officer stated that they had become aware of the use of children working at home in the area of software development (for a broader discussion of discussion of the child labour issue see below). Second, as with most areas of flexible employment the attention that has been given to homebased work has been overwhelmingly focused on safety with health-related issues like exposure to hazardous substances receiving little if any attention. While hazardous substance exposure may not be seen as an especially important OHS risk in the more ‘topical’ forms of home-based and telework this is a presumption that needs to be tested and in some areas, like home-based manufacturing, no such presumption can be maintained. The point is also that, irrespective of whether the risk is high or low, the prospects of monitoring exposure are far more remote in these settings than in factories. Consistent with these observations, the recent NIOSH (2002a: 17) report on changing work organisation also identified hazard exposures to home-based workers and teleworkers as a priority area for research. Of course, while work processes at home may lead to a contamination of the home, contaminants (such as lead or asbestos) may also be introduced into the home from external 258 --
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workplaces. A report undertaken by NIOSH (1995) indicated the latter issue was a matter of concern; With regard to lead poisoning, neurological effects and retardation it noted: These health effects have occurred in children of workers engaged in mining, smelting, construction, manufacturing (pottery, ceramics, stained glass, ceramic tiles, electrical components, bullets and lead batteries), repaid and reclamation of lead batteries, repair of radiators, recovery of gold and silver, work on firing ranges, and welding, painting, and splicing of cables.
There is little evidence that the provisions of the Workers’ Family Protection Act, designed to address this, have been implemented. In Australia the issue has received little if any consideration. While this risk is not, of itself, related to home-based work it is at least plausible if not probable that the risk of such hazard transfers may be greater where workplaces using hazardous substances are small or disorganised and the workforce casualised. As far as home-based work is concerned this risk warrants consideration. Taking all the above points together, it is recommended that WorkCover NSW, in collaboration with other NSW agencies, commission a report on the nature and extent of home-based work (including child labour). The report should also propose modifications in regulation and enforcement strategies, where appropriate, to better address OHS and other problems identified. 7.3.3 Labour Hire/Labour Leasing Labour leasing has recently attracted considerable attention from government OHS agencies in virtually every jurisdiction. In addition to those initiatives discussed below an important development has been the setting of separate workers’ compensation premium ratings for labour hire in a number of jurisdictions. Although this aspect is mainly discussed in Part 3 of this report (ie the section on worker’s compensation and rehabilitation) it is an action that has consequences for prevention. As a regulator in one jurisdiction observed in relation to this change: The …reclassification project that we undertook last year was actually part of our prevention strategy in that the dilemma we had was that because we weren’t distinguishing the labour hire group as an industry in its own right their claims costs and the impact of the levy etc was being cross subsidised by the rest of the industry and they weren’t being actually directly impacted…as they should be. So by actually pulling them out into a group that have now being reflected in their levy experience situation and those sorts of things, they as a group have now got to get together and decide what they’re going to do about it.
In other words, the intervention to forestall claims manipulation and the setting up companies was seen not only to address problems in administering the workers’ compensation system but also to create a financial incentive for greater efforts on the preventative front. 7.3.3.1 The Provision of Information, New Codes/Regulations and Collaborative Ventures with Industry In recent years labour leasing has attracted the attention of government OHS agencies in virtually every jurisdiction, resulting in formal and informal meetings with industry representatives, inquiries, the establishment of working parties/taskforces and the production 259 --
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of codes and other guidance material (a background report by an academic has also been commissioned as part of this). In South Australia a working party was established with industry and union representation to develop strategies. Similarly, in Victoria a series of bipartite stakeholder forums were established in early 2002, including one forum dealing with the labour hire industry which has called on the agency to produce a code of practice and also, more surprisingly perhaps, regulation. In Queensland a group of labour hire firms have held a series meetings at the Division of Workplace Health and Safety to facilitate a better understanding of their requirements under OHS legislation (the Workplace Health and Safety Act) and to examine ways of best meeting these requirements (most notably, in terms of risk assessment and risk management). The Division noted that these meetings were a response to concerns within the industry itself and the aim of the meetings was to take remedies back to industry. In NSW the government established a working party to undertake an inquiry into the employment and OHS issues and make recommendations. In 2002 the NSW government initiated a labour hire seminar series to inform employers of their responsibilities (including the distribution of material and checklists for both labour hire firms and host employers that have also been reproduced in WorkCover News Issue 49 August 2002: 14-15). A number of jurisdictions such as Queensland and South Australia agencies have issued guidance material of the OHS responsibilities associated with labour hire. In 1997 the WorkCover Corporation of South Australia issued guidelines for managing OHS in the labour hire industry. The ACTU (2000) was critical of this guide, arguing it placed the onus of responsibility, minimised the responsibility of labour hire firms and failed to acknowledge the role of worker involvement and consultation (the guide has since updated to reflect amongst other things recent developments in case law). In 1999 the Queensland Division of Workplace Health and Safety followed suit and produced its own guide. The Queensland guide ‘Managing Health and Safety in the Labour Hire Industry’ (1999) has separate sections on the legal responsibilities of labour hire organisations; host employers; group training providers, trainees and apprentices; and those subcontractors; as well as contract workers and other persons in the labour hire industry. It is quite conceivable that even a moderately sized employer using labour hire could be dealing with all most of these arrangements simultaneously. The guide is valuable in clarifying the legal status and responsibilities of each of these groups and in identifying some organisations such as group training providers who may have not have even seen themselves as being party to a labour hire arrangement. The guide is also valuable in terms of indicating what parties can be reasonably expected to do in terms of discharging their legal responsibilities. The discussion of strategies for achieving this is phrased mainly in terms of a more detailed specification of legal responsibilities. At a practical level this is only really a starting point although reminding the various parties of the importance of consultation/participation, risk assessment and auditing the OHS systems of subcontractor etc is more than worthwhile. Moving beyond relatively simple guidance material to implementing more effective management systems or other sets of controls needs more attention from government agencies. This need has not gone unrecognised. In South Australia an OHS Management Systems manual for labour hire has been developed and by December 2001 had been piloted with five firms (the aim was to finalise the manual by February 2002). Similarly, the Queensland Division of Workplace Health and Safety (2001a) has produced a Guide to Workplace Health and Safety Assessments in the Labour Hire Industry. This guide identifies the steps to be undertaken in risk assessment, contractual arrangements with host organisations and requirements in relation to the selection and training of employees (with model worksheets being included at the back of the guide). In South Australia a short course 260 --
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on managing OHS for the labour hire industry was organised under the auspices of Business South Australia and the WorkCover Corporation of South Australia, the latter giving the course formal recognition. While in many respects a valuable document the modules examined made only two relatively brief and generalised references to consultation and the need for worker involvement, reinforcing concerns about participatory mechanisms raised by unions as well as problems identified earlier in this chapter and chapter 4. Both guidance material and agency presentations to the labour hire industry (or its representative association the Recruitment and Consulting Services Association [RSCA]) have emphasized that labour leasing firms have a shared responsibility for OHS with the host firm. At the same time, several senior regulatory managers noted that this was a difficult message to get across, with labour hire firms preferring to see OHS as the prime responsibility of the host employer despite a series of prosecutions in New South Wales, Victoria and elsewhere which clearly established this to be the case (see next subsection). In Victoria, the labour hire initiatives have included examining information needs in relation to induction, job transfers and a range of other relevant matters. As might be expected, an issue receiving particular attention was the risk assessment responsibilities of labour hire firms. The most contentious aspects here are the logistical costs of undertaking such assessments for every placement and what labour hire firms perceive to be their lack of control when discovering an inadequacy in the host’s premises or their inability to prevent later changes that might endanger workers after inspection (such as a task transfer or removal of a machine guard). As in other jurisdictions, agency staff held the view that the critical control the labour hire did exercise was the right to control whether the worker/s were supplied or not. In short, the onus was on the labour hire firm (like providers of home-based care) to develop protocols governing the provision of workers so that where adequate risk assessment was not feasible or the assessment revealed serious deficiencies it would refuse to supply workers. Such protocols probably represent a major ‘culture shock’ to an industry built on providing all manner of workers ‘at a moment’s notice’. At the same time, agency staff noted that a growing number of labour hire firms were moving in this direction, some going so far as to contact WorkSafe Victoria to send OHS material to a groups of employers that requested services but assessments revealed to be very deficient in terms of OHS management. Victorian agency staff referred to a project (close to completion at the time of the interview) examining the systems for OHS from the perspective of the host firm, the agency and the agency employee. While unable to view the results of this project, it would appear that it addresses the issue of integration to combat fracturing/disorganisation raised repeatedly in this report. If this is the case, then the project is worthy of closer examination. The host organisation issue has also been a focus of activity in South Australia because it was recognised that the measures of even labour hire firms with stringent OHS induction, training and management protocols could break down if not matched by the host. According to one manager in this jurisdiction: One of the things we’re doing with the industry at the moment is endeavouring to develop a … host employer information pack which outlines … what their obligations are and the sorts of things that good management would require of them … and sets up for them a simple process to follow and includes some documents and forms that they can use to ensure they do that. So that if they want a person to do a particular job it sets out for them a series of questions – what do I want this person to do, what skills
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are required, who in our organisation is going to supervise them and introduce them to our safety system? And then it sets out some forms that facilitate that activity.
Thus far, little industry-specific guidance material has been produced on labour leasing. Labour hire is referred to in several WorkCover NSW documents such as Working Safely in the Cotton Industry: Cotton Safe (WorkCover NSW 2001f). As noted in Part 1 of this report, in some industries at least (like mining) labour leasing has taken on a particular character to meet the needs and interests of that industry. Some of these features, like using more specialized labour leasing firms, developing long-term relationships and having agreed general induction criteria for the industry as whole might serve as a model for other industries. At the same time, industry specific features may also indicate that OHS agencies need to consider the provision of guidance material and information tailored to an industry in addition to the generic guidance produced thus far. Overall, government agencies in most jurisdictions are now moving swiftly to fill the information gap in relation to labour leasing at least at a generic level. In addition to those initiatives already mentioned, a number of jurisdictions (such as Queensland, Victoria and Western Australia) have made labour hire (and related issues such as subcontracting and casualisation) a focal point for attention (via keynote speeches, role play hypotheticals and the like) in recent special OHS conferences and annual ‘safety week’ ventures. Nonetheless, in her review of guidance material Underhill (2002: 5) argues that attention has largely focused on labour hire firms rather than host employers and she indicates more attention is needed with regard to the latter. Examining the international approaches Underhill (2002: 34-35) observes: A variety of regulatory approaches to OHS and labour hire employment are evident. In most countries, however, the approach places primary responsibility for the OHS of labour hire employees upon their employers. A minority of EU countries, and Canada, have placed sole responsibility on the host, notwithstanding the EU directive endorsing such an approach. The US model most clearly shares the responsibility between the host and the labour hire company. Guidance material is not readily available or accessible in many countries, and the available material is specific to the legislation governing those countries. This does not preclude the value of such material. It does however, mean that much of the material could only be presented in a less prescriptive manner in Victoria. The proposed UK guidance material, for example, places clear minimum requirements on the circumstances under which labour hire companies can place employees in host companies. Similar principles are possible, but not enforceable, in the Victorian context. Of the Australian material, the Queensland Guide to Workplace Health and Safety Assessment provides the most thorough guidance on how labour hire employers can take a pro-active approach to managing OHS. Its pro-active approach appears consistent with the issues raised in the WorkCover Authority of NSW v Drake Personnel Limited Case (1997). The level of detailed interaction between the host and the labour hire company is similar to that recommended by Nuzum (2001). Other Australian materials go some way to meeting these requirements, but have been criticised for not going far enough.
Drawing the above themes together, two issues require more attention. First, encouraging labour hire firms to develop effective protocols governing risk assessment and the supply of workers. In such a competitive industry this may prove no easy task but there are positive signs that could be reinforced by a targeting of those labour leasing operators who refuse to follow this lead. One problem referred to by government agency staff 262 --
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is that while getting the major labour hire firms to cooperate was possible this still left the problem of a multitude of small and even transient employment agencies. As one policy officer observed: We know that there are say a 100 labour hire companies and there are 10,000 other employment agencies. We can really get the 100 going. It is easier to monitor, it is easier to see, its easier to view. The trouble is it’s very cheap to set up a labour hire company.
Given this, even targeted enforcement may prove inadequate. Further, even labour hire large firms are not exempt from these pressures. An agency manager in another jurisdiction stated he was aware of large labour hire firms who were prepared to ‘wear’ the costs of hold harmless contracts in order to retain their clientele (and within this jurisdiction the standing of such contracts as an attempt to defeat the purpose of OHS legislation had not been mounted). Even an inability to get public liability insurance will not necessarily discourage this practice. In mid 2001 the jurisdiction just mentioned surveyed 267 registered labour hire firms and of the 71 who responded 19 indicated that they knowingly had entered into hold harmless contracts with clients (it was recognised others may have unknowingly signed such agreements through not sufficiently scrutinising their tender documents). Of those 19 companies a significant minority (5 companies) had no insurance cover and anecdotal evidence indicated the number with insurance cover had declined in the succeeding eight months (up to the time of interview). There is clearly a need to have hold-harmless contracts struck down (in so far as that can be used to transfer financial liability for OHS) either via a court decision or legislative amendment. Competitive pressures in the industry and the ability of new firms to start up and undercut their rivals by giving less attention to OHS pose a serious concern to a purely reactive approach on the part of regulators. This problem is compounded by the firms that operate on the fringes of the industry, supplying labour on an informal or intermittent basis, acting as employment agencies that also supply labour or, in extreme cases, engaging in calculated regulatory evasion by masquerading as trusts and the like (see Part 1). For all these reasons serious consideration needs to be given to the licensing or mandatory accreditation (in terms of OHS) of labour leasing firms. It is noted that this was a major recommendation of the final report NSW Labour Hire Task Force (2001:9). Only through some form of licensing can operators be obliged to identify themselves and the interests of more responsible labour hire firms that abide by OHS law be protected. In the European Union, by way of example, a number of countries have licensing regimes for agency labour and some ban labour leasing in particular sectors (for example most exclude seamen and Belgium and Germany have excluded construction. Storrie 2002: 10). Amongst other things EU Directive 91/383/EC requires agency workers to be informed of the risks they may face before taking up a position, should receive sufficient training appropriate to the job and those responsible for OHS need to be informed of the assignment. Most of these requirements have been given effect to by member countries although eight have not legislated for the last-mentioned requirement (ie notification of assignment. Storrie, 2002: 49). Despite this, the third Euopean workforce survey (Paoli and Merllie, 2001 cited in Storrie 2002: 50) found agency workers were the least likely group of workers to receive information on the risks of using materials, products and instruments). Second, more attention needs to be given to achieving an integrated OHS management approach amongst the parties (as was being explored in Victoria and South Australia). Again, regulators could assist in the process by targeting host firms identified as having serious 263 --
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deficiencies in OHS. This could include areas where small business in high-risk industries and with a poor record of compliance with OHS law use labour leasing. In its final report the NSW Labour Hire Task Force (2001:10) recommended that provisions be included in the NSW OHS Act 2000 to ‘clarify the responsibilities of labour hire companies and host organisations’ following the principles established in recent cases discussed below. There is some merit in the proposal although, as this report has shown, the problem of ambiguity and misunderstanding of shared responsibility is by no means confined to labour hire but extends to other work arrangements. For example, a more general issue is that, as with direct-hire temporary workers (see below), host employers often seem to view their responsibility for induction, training and supervision of leased workers as being of a lower order than that with regard to permanent workers. Information and enforcement strategies need to address this. Revising the general duty provisions to specify responsibilities under each of these arrangements might be both time-consuming and fraught with some risk of delimiting these provisions. An alternative would be to make explicit reference to these work arrangements in expansive terms in the general duty provisions while providing more detailed information or guidance material to inform the parties of how these provisions should be interpreted. This would dovetail neatly with another recommendation of the Labour Hire Task Force (2001:10) namely conducting an education campaign to increase awareness of OHS obligations amongst both labour hire and host organisations (something WorkCover has already made some moves to do). 7.3.3.2 Targeted Prosecutions and Enforcement Strategies Labour leasing creates an array legal ambiguities in the eyes of the parties if not regulators (eg who is the employer, is there an employment relationship and what the responsibilities of particular parties?) and the situation becomes even more complex where a leased worker has ‘signed on’ to several labour-leasing firms at the same time. At the same time, a number of observers (see Bennett, 1994:171-177 and Underhill and Kelly, 1993:398-424) have viewed the legal ambiguities associated with labour leasing as not entirely accidental but rather part of the efforts of some to reconfigure work arrangements or manipulate contractual forms so as to evade the existing regulatory framework. From this perspective, the claim of labour leasing firms that they were not in control of the worker is seen more as a legal ruse. At least with regard to OHS legislation (less so in the case of industrial relations), these claims have not proved very successful. Although each case will depend upon its own particular facts, Australian courts have generally held that modern labour hire arrangements involve contractual relationships between the labour hire company and the client, and the labour hire company and the worker, with no contractual relationship between the client and the worker. In their efforts to address OHS problems posed by labour hire arrangements the enforcement agencies of a number of jurisdictions has undertaken a degree of targeted enforcement activity, both in terms of a blitz in a particular region (generally involving small penalties) as high profile prosecutions following serious incidents that are designed to both punish those involved and send a broader message to other parties. As part of their strategy of highlighting the shared responsibilities for OHS of labour hire firms and host employers (and especially the significant OHS obligations of the former) since 1997 OHS agencies have launched a series of prosecutions, beginning in New South Wales and then being followed by Victoria and other jurisdictions. The 1997 prosecution of a Sydney pump manufacturer, Warman International, and subsequent prosecution of two labour hire firms that supplied workers to it arguably set the pattern for later prosecutions. Warman 264 --
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International, was fined $480,000 (reduced on appeal to $160,000) in the NSW Industrial Court after five workers, including two supplied by Drake Personnel Limited, suffered serious hand injuries in a two month period due to unguarded machinery and inadequate training (Health Standard, August 1998:17). Drake, in turn, was also prosecuted under the NSW OHS Act, 1983 (WorkCover Authority of New South Wales (Inspector Ankucic) v Drake Personnel Limited (1997) 89 IR 374). The company pleaded guilty to the charge, and was convicted and fined $50,000. In determining the appropriate level of fine, Justice Hungerford ((1997) 89 IR 374 at 382) observed that the employer in the position of Drake ‘has a special responsibility to ensure the health, safety and welfare of its employees at the other workplace for no reason other than that workplace is removed from the employer’s direct management and control and would usually be at a location foreign, or at least unfamiliar, to the employees concerned.’
He stated that it was not acceptable for Drake: ‘…to plead reliance on Warman as the client to take appropriate steps to ensure safety in the workplace for all persons engaged on its premises. True it be that Warman itself may have offended against the OHS Act, but that does not, it seems to me, lessen the seriousness of the offences committed here by the defendant as the employer.’
Commenting on the case, Evan Smith a Senior Officer for WorkCover’s OHS Prosecutions Branch stated: ‘This case will have a significant impact on those who supply short-term contractors….Labour-hire companies are going to have to look at the worksite and make sure there is a proper system of work and proper equipment before they send anyone there. They are going to have to do a proper risk assessment. They are going to have to ensure the workers they send are trained on the equipment they will be using and they must tell the workers no to touch the equipment until they get properly trained. Companies like Drake don’t control a workplace. They can’t tell the occupiers what to do, but they can tell them that if they don’t get the place up to standard, they won’t send people there. This decision will put labour-hire companies on notice that they are responsible for the safety of their employees.’ (Health Standard, August 1998:17)
In another case, involving Drake, the New South Wales Industrial Relations Commission further developed the employer’s general duty as it applied to a labour hire company. In Drake Personnel Limited v WorkCover Authority of New South Wales ((Inspector Ch’ng) (1999) 90 IR 432 the Full Bench of the NSW Industrial Relations Commission dismissed an appeal by Drake against a decision of the Chief Industrial Magistrate to convict Drake of a breach of the employer’s general duty under s 15 of the OHSA (NSW), when a Drake employee was injured on an unguarded machine at the client’s premises. Prior to placement Drake had shown the employee a training video, and provided her with an instructional booklet. Drake had also sent a field staff consultant to the client’s premises to inspect the machine (which was properly guarded) upon which the employee was said by the client to be working, and going through the procedure she was to perform. The worker had been asked by 265 --
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the client to work on another, unguarded, machine, and had suffered an injury. The client had not told Drake that the employee would be required to work on that machine, and the field staff consultant had not been shown the machine when she visited the premises. Drake argued that it had taken all reasonable steps to protect the employee, and, having been shown by the client the machine that the employee was to work on, could not have been reasonably aware that she would be moved to another machine. Indeed, Drake argued that it had no knowledge of the existence of the machine upon which the injury had occurred. The court accepted that the risk that Drake had to guard against was the risk that its employee would be instructed to work on an unguarded machine, and Drake’s omission was a failure to require the client to notify Drake before transferring the employee to work on another machine. The Industrial Relations Commission ((1999) 90 IR 432 at 455-56) stated that: ‘... an employer who sends its employees into another workplace over which they exercise limited control is, for that reason, 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. … A labour hire company cannot escape liability merely because the client to whom an employee is hired out is also under a duty to ensure that persons working at their workplace are not exposed to risks to their health and safety or because of some alleged implied obligation to inform the labour hire company of the work to be performed. … This obligation would, in appropriate circumstances, require it to ensure that its employees are not instructed to, and do not, carry out work in a manner that is unsafe. In the present case, it seems to us that this would require, at the very least, that the appellant give an express instruction to the client and its employee that it be notified before the employee is instructed to work on a different machine.’
Indeed the Commission indicated that it may be that the labour hire company’s obligations will not be met by a contractual term in the contract with the client that the employee not be transferred to other work without prior notice. ‘The labour hirer has a positive obligation under s 15(1) to directly supervise and monitor the work of the employee to ensure a safe working environment’ (at 456). In a further prosecution, another firm supplying workers to Warman, Swift Placements Pty Ltd, was fined $15,000 for each of several offences plus costs arising from an incident where the worker supplied suffered severe injuries to his right hand (the loss of two fingers and severe lacerations) while cleaning a sand-mixing machine on the moulding line. The worker was originally employed in grinding but a week before the incident was moved to assist another employee in the cleaning task. Like Drake, Swift appealed against the Chief Industrial 266 --
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Magistrate’s decision to a Full Bench decision of the Industrial Relations Commission of New South Wales (Swift Placements Pty Ltd v WorkCover Authority of New South Wales, Matter No. IRC 1591 of 1999). Unlike Drake's appeal in the Warman’s case, Swift's appeal was not based on whether the company had executed its statutory responsibilities under the OHS Act. Rather during the initial case and in its subsequent appeal the defence of the company was that it was not the employer of the injured worker (Swift had been charged with breaching s15(1) of the then NSW Act which refers to the duty of the employer to safeguard their employees). Swift based its appeal on the issue of the degree of control exercised over the worker it leased – a crucial element in determining whether the worker was an employee of the firm. In Swift Placements Pty Ltd v WorkCover Authority of New South Wales (2000) 96 IR 69 the New South Wales Industrial Relations Commission in Full Session upheld the trial judge’s decision to categorise a labour hire worker as an ‘employee’ of the labour hire company, and rejected an argument that the labour hire company was not the employer because the worker was subject to the directions of the client. The Commission held that on the facts before them, the contract between the labour hire company and the worker was one of employment. The contract was for the employee to perform work ‘on a casual basis from time-to-time and where the performance of work, for which wages would be paid, would depend on the [labour hire company] allocating work to [the employee] according to the requirements of its clients.’ The contract between the worker and the labour hire company contained numerous indicia of the employment relationship, including a sufficient degree of control: the employee had to contact the labour hire company daily to ascertain whether work was available, had to attend the place nominated for work and undertake the work directed, had to follow the directions of the person nominated by the company to give directions (the client), and so on. For example, the presiding judges noted that Swift's documentation on its leasing arrangements contained numerous references to its temporary placement staff as their ‘employees’. A similar imputation could be drawn from the wording and contents of its offer of casual employment (including details on award rates and payment, attendance, loyalty to Swift and absence) as well as Swift taking responsibility for workers’ compensation, payroll tax and other statutory requirements. Moreover, Swift specified rules restricting the direct engagement of Swift workers by host firms, so it could scarcely claim that Warman was the employer. The Full Bench also found that the other possible employer (Warman International) exercised limited control over the leased worker. In sum, the Full Bench accepted the view taken by the trial judge that the contract between the labour hire company and worker obliged the worker to carry out work at the client premises ‘under the full direction and control’ of the client. This did not undermine the ‘ultimate or legal control’ exercised by the labour hire company, which ultimately would enable the labour hire company to dismiss the worker for inadequate performance (see also Mason & Cox Pty Ltd v McCann (1999) 74 SASR 438). The appeal was probably prompted by 'peculiarities' in the wording of the general duty provisions under the NSW Act (see discussion elsewhere in this report). Since 1997 there WorkCover NSW has achieved a series of successful prosecutions (including appeals against acquittals by magistrates) such that the Full Bench in WorkCover Authority of NSW (Inspector Legge) v Coffey Engineering Pty Ltd (no.2) [2001] (at 28) could state that:
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The nature and extent of the obligation of labour hire companies, as is the respondent here, to ensure the health, safety and welfare of their employees sent to work at a client’s premises is now well-settled.
Prosecutions of labour hire agencies have occurred in other states. In December 1999 a Victorian Industrial Magistrate convicted and fined a labour hire agency, Extrastaff Pty Ltd, when a worker placed by Extrastaff at a host employer had four fingers amputated on an unguarded power press. Extrastaff had failed to ensure that the worker had adequate training, information and supervision in the operation of the power press (Victorian WorkCover Authority, 2000b, 48). In imposing a $40,000 fine upon Extrastaff, Magistrate David McLennan stated that the culpability of Extrastaff was as great as that of the host employer (NCI Speciality Metal Products), which was also convicted and fined ($80,000). He stated (Victorian WorkCover Authority, 2000a, 12): ‘Merely because an employer hires out staff to other industries as part of the business of the employer, liability for the occupational health and safety of the employee is not thereby brought to an end. There is a responsibility to ensure that the workplace into which the employee is brought is safe, no less than if the employee was working on the employer’s own premises’.
In December 2000, the Victorian WorkCover Authority successfully prosecuted Drake Personnel in the Magistrates Court for a breach of the employer’s general duty to employees in the Victorian OHS Act. The client employer had previously been convicted and fined for breaching its obligations to the worker, who had been injured on an unguarded machine. The case was significant because the magistrate, building on the cases described above, found that even though Drake was a large organisation, with a client base of 8840 nationally, and supplying 30835 employees nationally to 11377 sites, it had a duty to ‘ensure that all hazards associated with the use of the machine were identified, that an assessment of risks associated with hazards was made and that any risk associated with the use of the machine was controlled’ (see Reiss v Drake Personnel Ltd, trading as Drake Industrial, Ringwood Magistrates Court, 7 December 2000, at 24). Australia is by no means the only country where OHS regulators have found that labour leasing firms have a significant legal responsibility in relation to the workers they dispatch to jobs. For example, similar prosecutions have commenced in New Zealand. In what was seen to be the first case in September 2001 Drake Personnel (New Zealand) Ltd was fined $NZ 1,000 under s6 of the Health and Safety in Employment Act by the Christchurch District Court after a worker assigned for two evening shifts at a manufacturing plant had two fingers crush (requiring partial amputation) when he slipped while cleaning a buffing machine. The host employer, Ultralon Products (NZ) Ltd was also convicted and fined $NZ 2,000 under s16 (1)(b) of the Health and Safety in Employment Act for failing to adequately train the temporary worker in cleaning and operating the machine and for failing to properly replace a guard (leaving more of the roller exposed). Reporting the court’s ruling in relation to Drake Personnel, a New Zealand OHS magazine stated: The court acknowledged that the defendants’ culpability was one step removed, but nevertheless accepted that it had failed to carry out a work-site assessment to identify the hazards to which its employee would be exposed, and to eliminate, isolate or minimize them as far as practicable (Safeguard, March/April 2002:12).
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Returning to the Australian situation, there can be no doubt that the prosecutions undertaken by WorkCover NSW and other regulatory agencies have had effects extending beyond the parties actually involved. One small but fairly immediate effect of the first Drake case discussed above was to encourage OHS managers from literally hundreds of private and public employers (including Warman) throughout Australia to attend one-day industry conferences on contractor safety management. More importantly, perhaps, it was probably the first contractor case outside the construction industry to involve a labour hire firm. The great majority of previous cases involved subcontractors (and their employees) who were actually working on site rather than supplying workers to another employer. For labour hire firms it raised an array of legal responsibilities most had never anticipated. A number of predominantly larger operators responded by significantly upgrading their OHS function to try and put adequate controls in place, including providing training and undertaking on-site visits to audit conditions and assess risks. These effects extended beyond NSW and Victoria where the first prosecutions first occurred (not surprising perhaps given the national operating basis of most large labour hire firms), being specifically referred to by regulators in other jurisdictions. As in a number of other areas (like subcontracting) OHS regulators in most jurisdictions have sought to reinforce the publicity associated with large prosecutions by reporting cases involving labour hire workers in their publications. This includes identifying workers involved in serious incidents were working in labour hire arrangement even where the conviction report relates to the host employer (see for example the prosecution of GrainCo Australia following the asphyxiation of a labour hire worker in its number 3 Silo at Biloela in May 2000. Safety Zone Feb/March 2002:16). Given the rapid expansion of the labour hire or labour agency sector in Australia, the USA and other industrialised countries over the past 20 years (Quinlan, 1998:14) these changes were arguably long overdue, especially where young and inexperienced workers are placed in dangerous work-settings (as occurred in the Warman case). The case in particular helped to indicate an array of overlapping legal responsibilities for those supplying and using temporary workers. At the same time, as noted elsewhere the degree to which this message has filtered through to small to medium sized operators or those that have been recently established is open to question, and certainly this was the view of a number of regulators spoken to. After acknowledging the positive effects, the Drake cases also raise questions about the adequacy of the regulatory response. Agency labour expanded (and continues to expand) to cover a wide array of occupations and workplaces without reference to the OHS implications of these changed work arrangements. Prosecutions alone are unlikely to be able to rectify the situation. As WorkCover NSW itself observed in its submission to the NSW Labour Hire Task Force (2001: 59) labour hire firms often undertook little assessment of the suitability of the host’s workplace or OHS management system prior to placement. Further, for some labour hire agencies at least remedial measures pose significant practical difficulties. Where labour agencies provide a limited array of specialised and skilled labour into relatively predictable work situations/processes, as in the cased of skilled engineering workers, or where the workers are being supplied for relatively safe work activities like clerical work, then devising appropriate controls should be readily achievable. However, where large agencies like Drake’s are supplying literally hundreds of different occupational groups into highly disparate work situations (and for widely varying periods of time) the issue of ensuring adequate risk assessment, worker training, induction and a 269 --
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matching of skills with tasks represents a large and complex logistical challenge. A related problem was referred to by a number of regulatory agencies. This was that while large labour hire firms regularly supplying workers to a particular industry or sub-sector such as hospitals can readily do a generalized risk assessment for placements (including inspecting all new placement workplaces or those where there is some reason known to warrant this) but strong commercial pressures may discourage the agency from undertaking a risk assessment of each individual hospital prior to each placement. In such a competitive industry to do so would be to risk being undercut by a rival – a point also made by labour hire industry representatives. In a sense, host employers lent support to suggestions there was a problem with several observing that while it might be thought leasing would be relatively unproblematic in relation to a professionally trained group like nurses with recognized skills this was not their experience. Rather, they had found leased nurses (including those very experienced in hospital work) still posed problems because of the lack of familiarity with the particular hospital setting. Further, as the representatives of one regulatory agency were keen to point out the hospital example just cited may represent the least problematic case since a preplacement workplace audit is far less likely in industries with hundreds rather than dozens of workplaces, including dangerous industries like building and construction. As the cases discussed above also highlight workplaces, supervisory arrangements and tasks can and do change and even apparently small changes have the potential for serious OHS consequences. Even an audit of every workplace prior to every placement could not guarantee the OHS of a leased worker (though it would certainly have reduced the risks). One way to address this would be to establish elaborate protocols about notification and appropriate measures to be taken when a leased worker is moved another job within the host plant or another change with the potential to significantly affect safety occur. Some labour hire agencies have developed such protocols although, as far as we are aware, there has been no assessment of their scope and effectiveness has to our knowledge never been assessed. The effectiveness of managing risk will also depend on the capacity of leased workers to raise OHS issues with the host employer. As already noted elsewhere in this report, workers who are essentially visitor to the workplace may be reluctant to do this for fear of jeopardising their future employment prospects. Such activity also presupposes a degree of knowledge that many leased workers may lack, as indicated in a recent case (WorkCover Authority of NSW [Inspector Milligan] v Manbead Pty Ltd. [2002] NSWIR Comm 130) where Kavanagh J observed that the manager of the labour hire firm had: …told his employees to complain if they identified danger but he had in place no independent, general, site-safety standards in which he instructed and trained his employees to assist them to recognise a work hazard.
The last point has relevance to issue of contingent worker participation in OHS discussed in an earlier section of this chapter. Even ignoring the last points, commercial pressures may impose limits on the degree to which any individual labour hire agency can impose protocols. From the perspective of the host employer, these protocols may appear to intrude on its management practices and the extra work associated with their imposition may disadvantage those agencies using them if not cause the employer to reconsider its use of leased workers altogether. On the other hand, some agencies and host employers also acknowledged that being able to reliably supply workers well trained in OHS might have commercial advantages in some 270 --
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industries or particular circumstances. Yet this argument while valid, appears to be the exception rather than the rule with labour hire industry representatives spoken to repeatedly making the point that, in their view, the majority of clients were primarily driven by price considerations when selecting suppliers. Consistent with what has already been argued with regard to information provision, this suggests that users of leased labour should also be targeted in terms of information on their OHS responsibilities. In sum, prosecutions have had some positive effects although there is more need to consider enforcement strategies that will impact on smaller and new operators (such as some form of OHS management accreditation). Jurisdictions were not unaware of this problem and several mentioned specific measures being undertaken or considered in addition to the provision of information (including establishing working parties or groups to look at ways of improving compliance as discussed in the previous subsection). One jurisdiction stated that while it had not undertaken a specific targeted audit of the labour hire industry the industry was part of its forward program for enforcement activity and it had focused some compliance audits in industries known to be significant users of leased labour such as construction. At the same time, it remains an open question as to whether a management system could be devised that would cope with the problems posed by very large-scale operations, supplying workers from dozens of occupations into hundreds if not thousands of workplaces, each with its own peculiar characteristics. In other words, we may be witnessing the growth of forms of business and work organisation that are essentially unmanageable in terms of OHS, at least as far as achieving the standards or outcomes that have been deemed acceptable in the past. A more modest variant of this argument is the suggestion that labour leasing may be inappropriate in particular industries precisely because OHS cannot be managed to the same degree. This issue has received some consideration outside Australia in terms of regulatory regimes that only permit labour leasing in designated industries or the refusal of some insurers in the USA to provide workers’ compensation cover for agencies who lease labour into particular industries. When considering this issue, regulators interviewed tended to respond not by expressing any confidence that labour leasing could be adequately managed in all settings or that such a ban might not be desirable. Rather they raised the practical problem of how to discourage labour leasing arrangements in these situations (for example indicating that workers’ compensation cover could not be refused). 7.3.4 Casual, Temporary and Itinerant Workers While the growth of temporary employment is one of the most significant changes in employment arrangements in Australia (and some other industrialized countries) it has received far less attention than almost any other area. Indeed, until recently it is fair to say there was virtually no recognition of it as potentially significant issue amongst regulatory agencies and interviews conducted for this project indicated confirmed that these agencies are only just beginning to consider this issue. Even this consideration is in its earliest stages with few if any agencies indicating they were considering concrete proposals to address the problems posed by a growing number of temporary and transient workers. 7.3.4.1 The Provision of Information, New Codes/Regulations and Collaborative Ventures with Industry In keeping with the introductory comments this project could identify no jurisdiction in Australia that produces guidance material specifically targeted at the OHS risks associated 271 --
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temporary workers other than that produced in relation to labour hire. Searching the websites of OHS agencies in North America and Europe revealed a relatively similar situation and this may help to explain why Australian agencies have not picked up on the issue (though note the draft EU standard on temporary workers. Quinlan and Mayhew, 2000). In addition to labour hire, one further potential exception may be noted in relation to itinerant workers employed in horticulture and the ‘harvest trail’ (see Chapter 4). Agencies in a number of jurisdictions (NSW, South Australia and Victoria but not Queensland) had recently initiated a national project called Fruitlink that aimed to develop OHS training for transient and tourist (ie backpacker) workers along the ‘harvest trail’ using mobile facilities. Efforts were being made to get federal government funding to actually implement the project but as yet this has not been forthcoming. In early discussion, federal government representatives had seen the opportunity to use the system to also check on work-permits required by overseas backpacker tourists (for problems here see Chapter 1) and to identify illegal immigrants but state agencies resisted this because they feared it would undermine industry and worker acceptance and coverage of the scheme. Other issues to be resolved included getting a viable form of certification of training (with ideas under consideration including a business/barcode analogous to the subcontract welders ‘passport’ discussed elsewhere in this report) and who was to manage/fund this process. Overall, ‘Fruitlink’ appears to offer a useful approach to addressing some OHS issues associated with itinerant workers but its effectiveness cannot be evaluated until it is actually implemented. It should be noted in passing that itinerant rural and agricultural workers represent only one segment of a broader group of mobile, or what the HSC has labeled peripatetic workers. A number of the work arrangements discussed in this report (temporary employment, telework and partial home-based work to name but the most obvious) contribute to a more geographically workforce. As yet this aspect of changing employment arrangements has received little consideration. In the UK a project to examine ways of producing guidance material relevant to peripatetic workers was commenced in 1998 but due to delays was still in train in July 2001 (HSC, 2001: 17-18). The results of this project would warrant the attention of WorkCover. It can be argued that to some extent the OHS risks encountered by temporary workers have been addressed, albeit indirectly, by other program developments. For example, most agencies are giving increased attention to the OHS risks encountered by young workers (remembering that around 60% of 16-19 year old workers in Australia are casual/temporary employees) as well as OHS in hitherto neglected industries like hospitality (again, a major employer of young temporary workers). A similar though less persuasive argument may be made in relation to increasing efforts in relation to OHS in small business, which employs a somewhat disproportionate number of temporary workers. Virtually every OHS agency in Australia has produced material highlighting the special risks encountered by young workers (see for example the Victoria WorkCover Cover Stories No.1 February 2002: 19) as well as targeted information strategies. WorkSafe Western Australia (1999), for example, produced a Code of Practice: The safety and health of children and young people at work. WorkSafe Westralia has also nominated young workers as one of seven priority areas for attention and employer guidance information on managing OHS hazards also stresses the need to provide adequate training and supervision to new and inexperienced workers (see WorkSafe Western Australia no date, no date a, and 2001). In both a fact sheet and code WorkSafe Western Australia stresses the need for employers to take account of 272 --
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special factors in relation to young workers, including their physical and psychological maturity, training and experience, and their ability to make mature judgements or cope with unexpected stressful situations. In South Australia, the Safety in Horticulture resource kit (WorkCover Corporation, 2000a) includes information/checklists on child safety (as well as seasonal and labour hire workers). In Queensland (as several other jurisdictions for that matter) efforts on behalf of young workers include an interactive website (internet café style) so that young workers in the hospitality industry (as well as employers) can get information on OHS. WorkCover NSW has also produced guidance material relating to young workers (downloadable off the web) including Protecting Young Workers from Workplace Hazards (WorkCover NSW, no date B). The document cites a number of exemplary cases to highlight the risks and like the Western Australian material these stress issues of inexperience, lack of training and inadequate supervision. In conjunction with the National Children’s and Youth Law Centre WorkCover NSW has undertaken a project on occupational violence affecting young workers (including bastardisation of apprentices, bullying and sexual harassment), producing a series of fact sheets. While all this material is valuable virtually none of the generic documentation makes mention of employment status, of how risks could be exacerbated when workers are employed on a part-time or casual basis and where there are high levels of labour turnover, or that employers must take measures to ensure part-time and temporary workers receive adequate training and supervision. Some industry specific material discussed elsewhere in this chapter does refer to employment status but even this is uncommon and the references are usually too brief to indicate that the employer may need to take this into account in their OHS management. In this regard, Australian jurisdictions have only been reflecting the practices of their counterparts in other countries such as the USA (though a recent NIOSH document notes that teens 'typically work in part-time, temporary or low paying jobs.’ NIOSH, 1999: 1). There have been a number of other positive developments. In 1998 OHS agencies in NSW, Queensland and Victoria helped to facilitate NOHSC research project to examine the OHS risk experience and knowledge of young casual workers the company and franchise stores of a multinational fast food company. This project, which entailed interviews with over 300 workers, was one of the first systematic investigations of OHS in the fast food industry and the final report (NOHSC, 2000) provided insights not only into the problems of young casual workers but also made a number of practical recommendations discussed elsewhere in this report. As a result of this and other initiatives by agencies and IRGs (and their Queensland equivalent) dedicated material on OHS in the hospitality industry and the risks encountered by young workers within it has been produced. In 1998 the Hospitality IRG was a vehicle for a MOU (involving eight large employers) that lasted until October 2000 to develop best practice in OHS including the development of collaborative networks and produced a Hospitality Industry Employee Induction Checklist and OHS Information Manual. In late 2000 the MOU was succeeded by Hospitality Industry Safety Alliance that broadened membership to include employer and union representatives 150,000 hotel, motel and club employees (WorkCover News February-April 2001, 44: 19). In sum, there is a body of material addressing the OHS risks encountered by young workers but as yet this gives a limited, though growing, recognition to the status of jobs where young workers are concentrated. In the industrial relations sphere this has not been the case. For example, the NSW Department of Industrial Relations contains an array of material on the implications of employment status and the section on rights and responsibilities of young workers opens with the statement: 273 --
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The radical transformation in the nature and shape of work over the past two decades has impacted greatly on young people, both as teenagers and as young adults. Young people are more exposed to casual work, to employment that is part-time or temporary in nature, and in general, experiencing static or declining levels of earnings from work.
It might be suggested that formal differences in employment entitlements (regarding wages, leave and the like) found under industrial relations laws and awards/agreements make such recognition essential whereas all employees have equal entitlements to protection under OHS legislation. However, as this report has shown formal equality does not amount to equal treatment in practice (see for example the discussion of participatory mechanisms) and only by recognising and specifically addressing the vulnerability of temporary workers, including the majority of young workers, can their rights and entitlements be secured. Thus, as in the industrial relations sphere, this will entail particular measures to improve their awareness (including web-based information that is hopefully linked and dovetailed to information on employment and workers’ compensation entitlements). It also includes appropriately targeted enforcement strategies. The NSW government has recently moved to fill the OHS gap in this program. In August 2002 the government launched an employment rights/OHS guide for young workers jointly developed by WorkCover NSW and the NSW Department of Industrial Relations and to be distributed via schools, TAFE colleges and other organisations. In launching this guide, the Special Minister for State and Minister for Industrial Relations, John Della Bosca, made an explicit link to changing work arrangements (CCH OHS Alert, 22 August 2002): We’ve seen great changes in the Australian workplace in recent years – new industries, the expansion of casual employment, new work practices and relationships. These changes impact most strongly on young people, and make it more important than ever for those starting work to bring with them a solid understanding of what their rights are, and how to protect them.
An analogous/overlapping development to initiatives with regard to young workers has been the production of material and information strategies in relation to ‘new’ workers. In South Australia WorkCover has produced an integrated set of web-accessible and hardcopy documents on new workers (with inclusions in other guidance material) detailing employer responsibilities at the point of engaged and as part of the SAfer approach (see for example WorkCover Corporation of South Australia, 1998a). Risk factors identified include the failure to do risk assessment on the job prior to engagement, lack of training/induction, inexperience and the reluctance of new workers to raise OHS issues for fear of being seen as troublemakers. The agency also produces an array of worker-targeted information on their rights and responsibilities, bullying and other problems at work and accessing workers’ compensation (including links to the employee advocate unit). Suitably modified this material could form the basis for preparing information products on temporary workers. Further, in South Australia number of projects have been run on new workers and the agency has also begun to target schools with information on both OHS and workers’ compensation/rehabilitation, thereby capturing those already holding part-time jobs in retailing, hospitality etc as well as those leaving to enter the workforce full-time. Officers were generally positive about this although some concerns were expressed and, as far as we are aware, the impact of the scheme is yet to be formally assessed. On the positive side, it was 274 --
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hoped this would also feed back to parents. The targeting of children for OHS education at school has also received recent endorsement from a European seminar on OHS and education held in Bilbao in March 2002 under the auspices of the European Agency for Safety and Health at Work (NSCA’s Safety Bulletin 95 22 April 2002). On the other hand, some South Australian regulators interviewed were concerned that it would be seen as ‘education’ and not as relevant workplace training. Tailoring the OHS education to specific industries where young in-school workers were concentrated, or those in the immediate vicinity of the school, was seen as more valuable than a generic package and such an approach may also better avoid the ‘recognition’ problem just referred to. Other jurisdictions have targeted OHS information at schools. For example, in early 2002 WorkSafe Western Australia released Smart Move, an OHS internet resource package for year 10 to 12 students undertaking work experience and placements (CCH OHS Alert February 2002: 3). The need for industry specific information has been recognised with Smart Move containing specific modules on building and construction, health and community services, electrical/electronics, hairdressing, hospitality and tourism, manufacturing, metal and engineering, business services, primary industry and retailing. Some other schemes targeting new workers are industry specific. For example, in NSW a number of IRGs have or are developing material in this area. For example, in 2001 the Industrial Manufacturing Reference Group was developing guidance material on OHS induction and training of new staff tailored to the needs of small firms (WorkCover NSW 2001g: 5). In the building and construction a four-hour OHS induction course has been developed in South Australia with training conducted by registered training organisations (approved by the Construction Industry Training Board and funded using its levy on employers). The scheme uses a dot point training system that enables trainers to adapt to content to meet the specific needs of those attending (such as those working in the housing sector). At the time interviews were conducted the scheme had been running about a year and about 2,000 workers had attended the classes. It needs to be stressed that the effectiveness of most of these measures has not been assessed. One overseas document on new employees reviewed in the course of this project made the point that new workers can only absorb so much information in the first few days and advocated a ‘buddy’ system of an accompanying experienced worker to safeguard workers in the period following orientation. This seems to be a valuable point to include in guidance material so long as the ‘buddy system’ is used as a complement to rather than as a substitute for proper orientation and training. As yet, there are few agency initiatives targeting information to temporary worker. Other initiatives, such as those aimed at young workers, would appear to have value, but very few address the risk factors associated with employment status. Any argument that such workers warrant no special recognition because, unlike self-employed subcontractors for example, they are not designated as a special category of worker under OHS legislation must be rejected as ignoring substantial differences in practice (both in terms of their working conditions and their effective protection by legislation). Indeed, these very points were made by a report prepared for the Italian Ministry of Labour and Social Justice (Synthesis, 1997) that argued for a refashioning of regulatory interventions to give explicit recognition to temporary workers that would eliminate both formal and informal differences in their industrial and OHS entitlements:
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Besides the generic principle of parity of treatment between (the) stable and precarious labour force, including the dispositions of law and confirmed by the collective negotiation category, there is the need for instruments or mechanisms that could be able to have an influence on the effect of the juridic norm.
Temporary workers remain a significant omission in terms of addressing the OHS issues associated with changing employment relationships and one requiring serious attention in terms of regulatory protection. The existing legislative framework formally protects temporary workers but there is little in the way of supporting codes, guides and proactive measures to give meaning to this. The situation appears little better in Europe and North America. In the EU there have been some attempts to set standards. Articles 6 and 7 of the European Directive on the Protection of Young People at Work (94/33/EC) requires employers to take specific account of young worker’s experience, awareness and maturity when assessing risks and allocating tasks. In 1990 the European Commission adopted a draft directive on the protection of the health and safety of part-time, temporary and seasonal workers. In regulating the OHS of fixed-term contract and temporary agency workers Directive 91/383/EC prohibits discrimination and requires equal OHS protection be afforded to these workers. Yet, with the exception of one or two member countries, nothing conspicuous appears to have flowed from this in terms of regulatory and agency measures to implement this. The issue of temporary workers has perhaps received most attention in France, where special regulations have been introduced (one of the key of objectives of which is to minimise any disparity in conditions between temporary and permanent workers). In the USA, likewise, while attention has been given to the risks encountered by young workers and seasonal agricultural labour temporary workers per se have received minimal attention. By the mid 1990s OSHA inspectors had been noticing an increase in serious incidents involving temporary workers. Investigations revealed that temporary workers were being exposed to unsafe conditions, lacked experience and adequate training and that companies were failing to maintain adequate injury and illness records in relation to temporary workers (Ebert and Wilkerson, 2001: 35-36). However, one of the few (only?) programs known to have flowed from was the Choice program developed in collaboration with the 20 temp agency companies in Ohio in 1996 and subsequently extended to the construction industry and elsewhere. The Choice program entailed undertakings by participant firms (regarding documented employee OHS training, dealing with host employees including on-site visits, establish mechanisms for temps to address OHS and participate in evaluation), free training seminars delivered by OSHA on common industry hazards and the production of videotape to assist with employee training (Ebert and Wilkerson, 2001: 36-.39). An evaluation revealed that 90% of Choice participant companies performed health and safety ‘walk-throughs’ at host firms and 84% provided OHS training before sending workers to host employers (Ebert and Wilkerson, 2001: 39). As can be seen, this project was confined to labour leasing rather than applying to temporary workers more generally. 7.3.4.2 Targeted Prosecutions and Enforcement Strategies As yet there is little evidence that agencies in NSW or other Australian jurisdictions have undertaken targeted prosecutions and enforcement strategies in relation to OHS breaches associated with the use of temporary or itinerant workers (other than those working for labour 276 --
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hire firms). Research undertaken for this project did identify a number of actions by individual agencies but as yet this activity is very limited in scope. Over the past five years there is evidence that agencies are becoming aware of the need to take the incidence of temporary employment into account as part of collecting information for their enforcement activities. In Queensland several industry sub-sectors were included in the target audit program on precisely these grounds (including concerns with the limitations of relying purely on workers’ compensation claims data). Thus, the Queensland Division of Workplace Health and Safety (1998:4) target audit of accommodation and hotels states these were selected: …due to the risks and the high percentage of part-time and casual workers employed in these industries and the perceived tendency of casual workers to under report injuries (OHS Performance Overviews, Selected Industries, Worksafe Australia. 1994).
Another target audit of the fast food industry (Queensland Division of Workplace Health and Safety 1999a) was in part a response to the perceived risks encountered by young workers in this industry (though their casual employment status receives no recognition). The selective use of target audits based inspections of a sample of workplace plus a range of additional sources (workers’ compensation claims record, NOHSC research and data analysis, Australian and international research, hospital admission records, and feedback from inspectoral visits) could provide a model for enhancing information on industries or subsectors where contingent work arrangements are extensive and weaken the reliability of workers’ compensation data. In recent years most jurisdictions have increasingly targeted OHS breaches involving young workers (including bastardisation/harassment by fellow workers as well as omissions by management exposing them to hazardous substances or the risk of injury) where young workers and apprentices are involved. Victoria, for example, has recently run a series of prosecutions against employers in workplaces where apprentices were bullied – an action that received wide media coverage. Action against bullying more generally had followed a substantial response to phone-in line run by the agency (itself a response to anecdotal evidence of problems in this area). WorkCover NSW and several other jurisdictions have also pursued a number of well-publicised prosecutions of fast food outlets and other employers whose negligence has resulted in serious injuries and deaths of young workers. Further, the judges hearing these cases have shown a willingness to view such offences as especially grave and impose more substantial penalties given the accentuated vulnerability of these workers. Yet while many of those young workers exposed to unacceptable risk in fast food and other industries were casual/temporary workers mention was seldom made of this, either in court proceedings or when convictions were reported to highlight the need to provide these workers with adequate training and supervision. There is some evidence of a change here with, as in a number of other areas like labour hire, employment status and work arrangements being increasingly included in reports of such cases. For example, a recent issue of Safety Zone (Feb/March 2002:15) published by the Queensland Division of Workplace Health and Safety reported the conviction and fining ($15,000 plus costs) of a national pizza company (Pizza Haven) for failing to provide safe plant (s28(1) of the Workplace Health and Safety Act 1995. The prosecution followed an incident where a young worker received 277 --
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lacerations to several fingers while cleaning a dough-rolling machine. In its report, Safety Zone (Feb/March 2002:15) stated: The court was told a 15-year old male casual employee received cuts to several fingers on his left hand, while cleaning a dough-rolling machine. He had not however been trained to operate or clean the machine and was not supervised…Magistrate R Kilner heard that the employee was left handed and that his left elbow accidentally touched the start button as it was not shrouded to prevent accidental operation. The company had procedures in place for the cleaning of this machine, which included isolating it by turning it off at the wall. The procedures would have prevented the accident.
Similarly, a recent addition of its publication, Recent Prosecutions WorkSafe Victoria (2001: 35) reported the conviction and fining ($50,000 plus costs) of Casual Living Australia Pty. This followed an incident where a 15 year-old inexperienced casual labourer received severe head injuries after falling 3.6 metres from a loading bay without any perimeter guarding or hand rail. Summarising the magistrate's decision the report noted: The magistrate concluded that the defendant was aware of the danger and that a
rudimentary barrier could have been constructed before casual labourers were employed. He said there had been no act of bravado by the injured worker that he was oblivious to the danger of working close to the edge and that an experienced person should have supervised the activity. The magistrate said that sadly, the incident had interfered with the life of a young boy. The combination of young inexperienced workers and temporary employment status is not the only area that warrants prosecutorial targeting. The use of temporary workers to undertake tasks that expose workers and members of the wider community to high risk also warrants attention. One case to illustrate this occurred in June 1991 when a coupling detached itself during the unloading of LPG at the Bulk Liquids Terminal, Port Botany resulting in one injury and a serious risk of explosion for eight minutes. When WorkCover NSW prosecuted the company responsible (WorkCover Authority of New South Wales (Inspector Magill) v Boral Gas (NSW) Pty Ltd [1996]) it was revealed that management used a combination of permanent and casual employees to perform this task. This arrangement was justified on the basis of the intermittent nature of the work. Issues referred to during the trial and sentencing included the adequacy of training and the work system, staffing levels at the time of the incident and the fact that a casual employee involved held a full-time job as a garbage collector. It is reasonable to suggest that the adequacy of such work arrangements would have assumed far greater importance had a catastrophic actually explosion occurred. This case also highlights the need to recognise the potential risks posed by a combination of work organisation factors (staffing levels, temporary workers and multiple jobholding). Following on from the last point it is worth noting that several court decisions in relation to incidents involving leased workers have made specific reference to the vulnerability of casual/temporary workers. For example in WorkCover Authority of NSW [Inspector Milligan] v Manbead Pty Ltd. [2002] NSWIR Comm 130 Kavanagh J criticised the labour hire firm Manbead for failing as an employer to ensure its casual employees were properly trained or instructed (the attempt to pass on all supervisory obligations to the host employer and a contractor). In his judgement in relation to WorkCover Authority of NSW (Inspector Robins) v Labour Co-operative Ltd (No.1) [2001] Hungerford J noted that two days after the serious incident the host employer, CSR Timber Products had engaged an OHS consultant to visit the 278 --
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Raymond Terrace site and undertake an investigation. Commenting on the report, which was admitted into evidence Judge Hungerford stated (at 53-55): Relevantly for present purposes, included amongst the underlying causes of the incident and what I perceive to be “risks” to safety were the following –
• •
Use of casual labour. Casuals hired by the defendant – adequate job task analysis for recruitment of suitable persons were not provided. • There was no information on health, fitness or past employment history and experience of new casuals recruited by the defendant. • The off-site induction provided by the defendant was not job specific; there was no test of comprehension. • The on-site induction and initial training were inadequate because of their brevity over only two days and without written job transfer practices or current work instructions. • Ms Lister, whilst a keen trainee, was likely to have had little recent industrial experience and her keenness and apparent quick learning may have increased the perception of competency amongst those members of the team responsible for her supervision and training. In the result, Dr Douglas, made the following relevant recommendations – • CSR Timber Products should undertake detailed job task analysis of all jobs for use by the defendant in selection criteria. • The defendant should give a brief resume of the casual employee’s experience and competency to CSR Timber Products. • The continued reliance on casual labour requires greater effort in task specification induction which must not be delegated to a labour hire firm, such as the defendant. • On-the-job induction and safety training must be documented and formally assessed by questionnaire and demonstration. • A formal on-the-job induction programme requires a special time period of assignment to a “buddy”, or on-the-job trainer, and formal testing of competency. • Two days does not appear to be sufficient training for work in the Boardmarking Area on the press floor. • Up-to-date work instructions should be developed for all tasks in the area. • The level of supervision of casual or inexperience employees must be commensurate with the risk and complexity of the task to be performed. • The task being performed here by Ms Lister when she was injured will require closer supervision when a casual employee is performing it. • If casual employees, such as Ms Lister, are to be used then a permanent pool of casuals should be developed containing person trained to an appropriate level and supervised closely. This consultant’s report was seen to be sufficiently noteworthy for Judge Hungerford to reiterate reference to it in a subsequent judgement involving the same company (WorkCover Authority of NSW (Inspector Robins) v Labour Co-operative Ltd (No.2) [2002] NSWIR Comm 2.) As can be seen a number of critical issues identified and recommendations made 279 --
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are not specific to leased labour but the engagement of casual workers more generally (though note too the reference to the need for job specific rather than simply generic safety induction that is an important labour leasing issue). Evidence presented in this report make it clear that many of the problems just identified are not unique to CSR Timber Products but are typical of the ways temporary workers are engaged and supervised. Appropriate enforcement measures are required to establish this, including the initiation of prosecutions that target breaches of OHS law in relation to directly hired temporary workers. This may involve targeting particular industries, where temporary and seasonal labour is in widespread use and legislative compliance is poor. In this regard it may be noted that in the US state of California a special prosecutor was appointed to investigate industrial fatalities in Yolo County in 2001 and immediately targeted the agricultural sector (Furillo, 2001). Finally, another option worth considering is using the more onerous obligations on lessors (see Johnstone, 1999 and Tooma, 2000) to prosecute incidents where casual temporary workers are involved. Leasing arrangements are common in a number of industries, such as hospitality, where casual employment is widespread and therefore advantage could be taken of these duties that OHS legislation places on these parties.
7.3.4.3 Conclusion Overall, despite some recent developments the OHS risks encountered by casual and temporary workers have largely been ignored by regulatory agencies both in terms of the information provision and enforcement activities. Given the size of this group and growing evidence on their exposure to OHS hazards, this represents a major omission that needs to be addressed as a matter of urgency. 7.3.5. Part-time work and Mulitple Jobholding 7.3.5.1 The Provision of Information, New Codes/Regulations and Collaborative Ventures with Industry As noted above, the needs for employers to take account of part-time workers in terms of making adequate arrangements for employee consultation has been identified by WorkCover NSW in both the 2001 Regulation and the Code on OHS Consultation. However, as far as could be determined no jurisdiction in Australia produces guidance material or other information that specifically addresses the OHS issues surrounding either part-time work or multiple-jobholding. As noted in Part 1 in Australia most part-time workers are also casuals and, aside from the issues of consultation and OHS training, it is unclear if permanent parttime workers encounter problems or face particular risks that need to be recognised and addressed. More work is needed on this area. The same point applies to multiple-jobholding. In Part 1 reference it was noted that a number of agencies were aware of problems in this but more information is needed to see if action is warranted and, if so, in what areas. For example, multiple jobholding may not pose significant additional risks in some industries (like hospitality) but be far more problematic in others (such as the combination of trucking with another occupation). 7.3.5.2 Targeted Prosecutions and Enforcement Strategies 280 --
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Consistent with the above comments there is no evidence of targeted prosecutions or enforcement strategies in relation to part-time work or multiple jobholding. Multiple jobholding has been referred to in a number of cases such as the 1996 Boral case mentioned in the preceding subsection. 7.3.6 Downsizing/restructuring and job insecurity Interviews undertaken with OHS agency staff for this project indicated a widespread recognition that organisational restructuring was common and could have adverse effects on OHS (most union representatives and not a few employer representatives expressed similar views), especially as it appeared measures to pre-empt these effects were seldom considered let alone undertaken. As noted in Part 1 this report, failure to consider the effect of significant changes to work processes – which organisational restructuring/downsizing often entail – or to consult with workers and HSR on such changes could be seen as a breach of general duties under the OHS legislation of most jurisdictions. In other words there could be the grounds for producing both guidance material and undertaking enforcement activity. Nonetheless, this issue caused agency staff the most discomfort when raised in interviews. Most felt it fell in the ‘too hard’ basket in terms of regulatory responses. Reasons proffered to support this included that it would be too hard for an agency to prove a link between a restructuring decision and a specific OHS outcome in terms of increased risk, an identifiable hazard or a serious incident. This might be seen to beg the question of adverse effects on worker health and wellbeing – the area where academic as shown in Chapter 2 scientific research is most extensive and compelling. However, agency staff in several jurisdictions argued that there were unlikely to be grounds for such actions because psychosocial effects of restructuring were difficult for workers to claim, virtually impossible to prove and consequently rare (especially given additional constraints placed on stress-claims by recent changes to workers’ compensation regimes). On the other hand, workers’ compensation staff at one of these same agencies indicated that they were able to identify a correlation between increased stress claims and employers that had downsized. This suggests the potential for collaborative sharing of information between prevention and workers’ compensation agencies. Another response was that, as with the shift to longer hours or the use of subcontractors, management would hardly bother to take precautions against adverse OHS effects (including increased bullying) of restructuring because it was hardly likely these effects would ever be measured (presumably the reference here was to regulators since as already noted there is considerable research that seeks to measure precisely these effects). In other words, these effects were never factored in (seldom regulators interviewed believed management consultants used as change agents had contributed to such presumptions by failing to identify OHS considerations). Several agencies indicated they were focusing their efforts on to ensuring employers undertook risk assessment and enabled workers time to adjust to more directly evident changes to work processes, including the introduction of new technology (although it was recognised that organisational restructuring could form part of this change). At the same time, several agency staff pointed to specific changes associated with organisational and work restructuring that could form the basis for regulatory action. A specific example cited in one jurisdiction was government hygienists examining the appropriate exposure standards where workers were moved from eight-hour shifts (the 281 --
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standard base used by the ACGIH for calculating long term exposure limits) to longer shifts (for which these exposure limits need to be recalibrated – sometimes substantially as in the case of noise, see NIOSH, 1996a). There is also a question of the extent compliance with revised and appropriate standards. 7.3.6.1 The Provision of Information, New Codes/Regulations and Collaborative Ventures with Industry There is virtually no provision of information to employers by Australian jurisdictions directly dealing with this issue. It is arguable that indirectly the issue has been picked up in guidance material on occupational violence, especially that dealing with community and healthcare services. For example, WorkCover NSW’s (1996a: 2,4) guide to Preventing violence in the accommodation services of the social and community service industry notes that a integrated approach to issue requires attention to adequate staffing (other issues mentioned are service to clients, design of premises, security equipment, staff training, shift structures, emergency procedures and post-incident procedures). In other words, staffing levels and other aspects of work organisation (such as shift arrangements) are identified as central and a number of these, as well aspects of workplace design, could be affected by downsizing/restructuring of operations as highlighted by a recent prosecution (see below). These aspects are elaborated on in terms of managing the risk, with sections on staff rosters, training, callout protocols, communication (including emergency communication) and recognising warning signs. A number of issues of work organisation are also developed in WorkCover NSW’s (no date) guide on Violence in the workplace. While this information is useful a more explicit reference to the need for management to consider the consequences of changes to staffing levels/reorganisation prior to these actions being implemented and taking appropriate remedial measures would seem worthwhile. Some agencies in other countries have begun to produce material that addresses issues of staffing load and work organisation, in relation to occupational violence. For example, in the USA NIOSH (2002) has recently produced a guide to managing occupational violence in hospitals that explicitly raises staffing levels and related issues in relation to both the risk factors leading to violence and remedial measures. Indeed, they are accorded significant emphasis. In relation to risk factors the second issue raised is ‘working when understaffed – especially during meal times and visiting hours’ followed closely by references to long waits for service, overcrowded and uncomfortable waiting rooms, working alone, inadequate security and lack of staff training and policies. In essence, half of the 12 risk factors identified relate to staffing levels/allocation and other aspects of work organisation (some of which are directly affected by staffing arrangements. NIOSH, 2002:4). Consistent with this, recommended prevention strategies include providing security escorts, providing all workers with adequate training and designing staffing patterns to prevent personnel from working alone and to minimise patient waiting time (NIOSH: 2002:5-6). There is other guidance material where reference management’s duties in relation to changes to work processes, including those resulting from changes to staffing levels and arrangements, could be made more explicit. Examples of WorkCover NSW publications that might be so amended include the guide Due diligence at work (WorkCover NSW 1996a), which already refers to managers’ responsibility in relation to contractors, and the Code of Practice on OHS Consultation (WorkCover NSW, 2001c).
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In an earlier section of this chapter reference was made to regulatory controls on major industrial hazard facilities that are found in the European Union and Victoria. As noted, the introduction of this regulatory control would at least provide a measure of protection where organisational restructuring has the potential for catastrophic consequences. At a broader level there is evidence that agencies are beginning to turn their attention to these issues. WorkCover NSW has commissioned a report on downsizing. Another agency has initiated a long-term project in the healthcare sector that considers workplace design, staffing and other work organisation issues. 7.3.6.2 Targeted Prosecutions and Enforcement Strategies Unlike subcontracting/outsourcing and leased labour, regulatory agencies have not adopted a targeted prosecution or enforcement strategy in relation to OHS problems arising from downsizing/restructuring and job insecurity. Indeed, there appears to have been less prosecutorial activity in this area than is the case with temporary workers. This is not to say there have been no prosecutions from which such a message could have been drawn. Research for this project (by no means exhaustive) identified a number of prosecutions resulting from serious incidents where organizational restructuring was clearly a contributing factor. These prosecutions afforded the agency an opportunity (not exploited) to publicise this aspect so as to give employers and other parties a better understanding of their obligations. It is worth briefly discussing several of these cases. In 1995 John Tormey was convicted before the Melbourne County Court under s25(1) of the Victorian Occupational Health and Safety Act (failing to take reasonable care of the health and safety of persons at the workplace) following an incident in 1992 when he was manager of Ingham’s factory at Thomastown, Victoria (The Queen v John Norman Tormey, Melbourne County Court, 5 September 1995). In sentencing Tormey, Judge Morrow noted the incident arose during an attempt by the manager and five employees to install a 180-kilogram power unit in the suspended ceiling of the factory but the all-up weight (some 768 kilograms) caused the unit and the men to crash through the ceiling. The manager and one employee fell on a rack and were not seriously injured. However, the other four fell 6.2 metres to a concrete floor, causing serious leg injuries to one worker, permanent brain damage to another (leaving him a virtual invalid at 25 years of age) and causing the death of a third worker (married only three years). The company used to have an engineer but he left and was not replaced, leaving the manager (a butcher by trade) with no on-site expertise to devise a safe method for completing the task. The manager had asked for advice from a visiting plumbing contractor and the firm’s purchasing officer who both recommended that the proper method would be to remove a section of the roof and install the unit with a crane at an all up cost of $1000 to $1200. Concerned to save this expense and having seen contractors working in the ceiling previously, the manager decided (without consulting head office in Queensland) to manhandle the unit into place with tragic results (and workers’ compensation cost alone exceeding $925,000). The Office of Public Prosecution granted a Nolle Prosequi to Inghams, which had originally been charged. While the company successfully sought to distance itself from Tormey’s injudicious actions serious questions can be asked about the company ‘s decision not to have any requisite expertise readily available to the manager or a process of requiring such decisions to be referred to it. As noted in an earlier chapter, the serious consequences that could flow from restructuring decisions that led to the relocation of engineering, maintenance or other personnel critical to 283 --
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maintaining OHS was highlighted by the Longford explosion and fire. In this case, the removal of engineering personnel to Melbourne seriously affected the job specific safety knowledge of both the engineers and the on-site operators (despite the use of computertracking systems). This was critical to the incident, especially as the company was aware of the scenario that would lead to an incident like the actual explosion. The Royal Commission and its head (Dawson, 2002) made specific reference to this failure but the key message about the need to try and anticipate and assess the OHS consequences of organizational restructuring largely went unheralded. Inadequate staffing and training levels, and working in isolation (all may be a result from downsizing) have also attracted recent attention from OHS agencies, although as yet few cases have proceeded on this basis. For example, the NSW Department of Community Services was convicted and fined $95,000 after an incident where the female manager of a state home for persons with developmental disabilities was assaulted by a patient (suffering from schizophrenia not developmental disabilities and with a history of sexual assaults on staff and others at the home) while working alone. (Gordon Tuckley v NSW Department of Community Services [1999] NSWIR Comm 402 and Mayhew, 2000:17). More recently, WorkCover NSW brought four charges against the Central Sydney Area Health Service following an incident in 1997 at Rozelle Hospital where a disturbed patient assaulted a number of staff trying to subdue him. The original summonses covered staffing levels and training, physical environment, duress response and the basis on which patients were assessed. At the hearing (2002) WorkCover withdrew the summonses apart from that relating to the failure to use safety glass in the ward and the duress response. It secured a conviction and fine of $180,000 against the Health Service. In this case WorkCover did not proceed on the staffing level aspect in the healthcare sector (WorkCover Authority of New South Wales [Inspector Pompili] v Central Sydney Area Health Service [2002] NSWIR Comm 44). Nevertheless, there is evidence of mounting concern amongst a range of parties about the effects of reduced staffing levels and other forms of restructuring (such as the substitution of more qualified staff with less qualified staff) for both the quality of patient care and pressures on staff. Violence is a particular concern, with a review by the Australian Institute of Criminology recently ranking healthcare as the most violent work environment in Australia and nurses as the second worst affected occupation after miscellaneous labourers (Zinn, 2001:1386). Concern has been sufficient for the NSW Department of Health to establish a Taskforce to address the matter. The connection between staffing levels remains to be demonstrated, but there is some supporting evidence. As noted in Part 1 at least one US study by Snyder (1994) found an association between staffing cuts/ward closures in hospitals and an increased level of occupational violence. In April 2002, Dr Michael Ridley, NSW President of the Australian Medical Association referred to a study published by the British Medical Journal (2001) arguing the most effective way to reduce violence in hospitals was via more staff not security cameras and guards (Occupational Health News Issue 512 17 April 2002:6). In recent years the British Medical Journal has published a series of articles/editorials raising concerns about the impact of hospital staffing levels on patient mortality rates (Jarman et al, 2000) and adverse consequences on patient care and staff of the substituting nurse with less qualified nursing aides/assistants (McKenna, 1998). Similar concerns have been expressed in other health journals. As the violence-related consequences of under-staffing in hospitals can be especially acute, there would seem to be more prospects of the public policy grounds for targeted prosecutions in this area. Further, the problem of downsizing/reorganisation is not confined to hospitals or to the risk of occupational violence. Similar pressures have been identified in relation to nursing homes, institutions and ‘safe’ houses for the mentally ill and 284 --
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also the provision of home-based health and community care. For example, a Swedish study of work-related stress amongst homecare personnel (Brulin et al, 2000) found that those surveyed identified financial and associated staff cutbacks as a significant cause of demanding working conditions. This study highlights the point that a number of the changes to work arrangements identified in this report (such as organisational restructuring and the movement of work to the home or other locations) may be combined, potentially compounding OHS risks. For example, staff cuts and volatility may curb the capacity of homecare providers or those assisting informal carers to engage in discursive exchanges that are critical to assessing risks to all concerned (for a UK study of the construction of risk by community psychiatric nurses and family carers for people with dementia see Adams, 2001). Time and capacity (including stable ongoing relationships) for those engaged in homecare to exchange information and ideas is an essential complement to formalised risk assessment and control measures undertaken by the employer. There is evidence of an emerging willingness of OHS agencies to consider staffing levels and related issues. For example, the Victorian WorkCover Authority recently launched a prosecution against John Myers, the state chief manager of Australian Correctional Management, for ‘failing to take reasonable care of the health and safety’ of Wayne Rowe, a former prison officer at the Melbourne Custody Centre. The prosecution alleged Myers threatened to ‘personally discipline’ Rowe when the latter complained about staffing levels and ‘put Mr Rowe under stress where it was foreseeable that the stress would affect Mr Rowe’s health, which it did’ (CCH Australia Latest OHS Headlines 28 May 2002). The charge was withdrawn pending legal advice when evidence indicated an employer-employee relationship rather than an employee-employee relationship (CCH Australia Latest OHS Headlines 29 May 2002). When the issue of compliance in relation to the OHS consequences of restructuring and job insecurity were raised in the course of interviews for this project, representatives of a number of agencies suggested that it would be difficult to give effect to this. They pointed to the complexity of such changes and the consequent difficulty of establishing a chain of causation to the satisfaction of a court. There is some merit in this argument. Yet the incidents and cases just cited indicate that it is possible to identify circumstances where the re-organisation decisions of employers – undertaken without due regard to OHS – have had profound and tragic consequences. That is, a chain of causation can be established. As agency staff themselves observed there could be circumstances where such actions might be more likely to succeed as in the case where there was wholesale and largely unplanned restructuring with no attention to assessing OHS effects, especially where it included well-known or predictable high risk/high impact scenarios (as in the case of Longford). Even if downsizing/reorganisation is one of several contributing factors, prosecutions that drew this connection into stark relief could form the basis for raising employer (and other party) awareness that meeting their general duty requirements means identifying/assessing the OHS consequences of significant reorganization of staffing levels, work systems etc and, if necessary putting suitable additional control measures in place. That is, agencies such as WorkCover NSW could target organisations that are known to be undergoing a restructuring or where an incident has occurred after such a restructuring and investigate whether the organisation met its risk assessment/general duty obligations. This would seem to set to offer the scope for a relatively direct prosecution where the organisation could not demonstrate it had undertaken such measures. Another basis for relatively unproblematic prosecution is to target the hazardous manifestations of under-staffing such as disorganised work-settings 285 --
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(inadequate training and safety protocols, poorly stored or maintained equipment). A possible example of this already occurring was a recent WorkCover NSW inspection of the emergency unit of a major Sydney hospital that identified six breaches of OHS legislation (including obstructed emergency exits and no staff protection against assault. The NSW Nurses Association, which claimed to have alerted WorkCover, argued the conditions were an example of the pressure that emergency departments were under (CCH Latest OHS Headlines 16 July 2002) It is worth noting that in the area of maritime safety the issue of adequate 'manning' levels has been considered a critical issue for many years and boards of inquiry have felt no reluctance to make rulings. As the recent inquiry into the grounding of the Australian Maritime College vessel Wyuna demonstrates (Australian Transport Safety Board, 2002), making findings and recommendations on 'manning' does not depend on the incident actually having serious consequences and nor did it necessitate excluding a number of other contributing factors. While maritime boards of inquiry and investigations are not analogous to court proceedings they can form the basis for further penalty-based remedies. More importantly, until such time as attempts to use staffing levels as a basis for prosecutions fail the problems of pursuing such actions remain speculative. Whereas if such actions were tried and failed then WorkCover could explore better ways of presenting cases or seek a clarification in the general duty provisions of the Act. Additionally, if an EU style regulation on major industrial hazard facilities were introduced there would be scope for dealing with staffing and other organisational restructuring issues where these had the potential fore catastrophic consequences. 7.3.7 Small Business 7.3.7.1 The Provision of Information, New Codes/Regulations and Collaborative Ventures with Industry Virtually every jurisdiction produces specific advisory material aimed at small business or has revised its general guidance material and other information strategies to make them more accessible to small business (including checklists of OHS performance for small business). WorkCover NSW (2001a), for example, produces a Small Business Safety Starter Kit, providing practical advice on legal obligations and a six-step process for complying with these obligations (including simple definitions and pro forma documents). The guide is referred to other guidance material such as When an inspector calls (WorkCover NSW 2002a). Examples from other jurisdictions include ACT WorkCover's (2002) Small Business Health and Safety Tool Kit. This is a somewhat longer document that provides useful advice on practical methods of hazard identification, the use of purchasing polices (including hiring subcontractors), risk management (including the hierarchy of control), supervision, the induction of new workers, worker involvement and injury management. Despite some variations there is not surprisingly a lot of common material in these guides, which are normally available in both 'hard copy' and internet downloadable versions. Agencies have become progressively more adept at targeting OHS information to small business, producing industry and/or hazard-specific rather than generic material (which small business generally finds of less value) and incorporating ‘system’ messages in hazard specific responses. In NSW a number of IRGs have or are in the process of producing guidance material that targets small business (though from 1995 if not before WorkCover itself was 286 --
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producing industry specific guidance material for small business. See WorkCover NSW, 1995). In addition to several mentioned in earlier sections of this report, examples include a Guide to Improved Management of Manual Handling and a promotion of WorkCover’s Safety Kit for the printing and baking industries being produced by the Consumer Manufacturing IRG and a strategy to promote the distribution of OHS information to hairdressers initiated by the Consumer Services IRG (WorkCover NSW 2001g: 7,11). Other examples include a program to promote the Managing Farm Safety training course by the Rural IRG and the development of a Small Business OHS Management System Implementation Tool by the Transport and Storage IRG (WorkCover NSW 2001h: 1,3). Some combined IRG initiatives have also been pursued, notably a Small Business Injury Management Best Practices poster used to complement WorkCover’s injury management campaign in 1999-2000 (WorkCover NSW 2001h: 4). Agencies have also modified presentation to enhance usage. This includes producing material in A4 pull-apart formats (rather than expensive bound glossy publications) so that relevant pages can easily be torn off, pinned to a wall or faxed to a colleague. A good example of a cleverly formatted and promoted hazard specific guide is the Queensland Guide to Machine Guarding. The guide has been advertised in the machine-sale columns of commercial publications and published on the Division’s website and used by other agencies). Agencies have also become more adept at promoting information, holding evening meetings where a meal is provided (small business operators often cannot afford time off during the day) and targeting country towns where the launching of such material is likely to attract more community and media attention. The Queensland guide to machine guarding and its associated information delivery could provide a useful model for other guides. Another potentially useful example from Queensland was the development of a practical guide to chemicals in the workplace. Following a similar short and A4 sized format this guide was originally intended to have three components namely, a section on how to manage chemical risks (setting up a committee/working party to do an audit, basic control measures and the like), a central section on the 12 to 20 most hazardous/widely used chemicals in that industry subsector (ie this could be tailored for each industry or subsector) and finally a short and simple risk assessment form. In the end, the trial version (for the printing industry) unfortunately omitted most of the first section but still received a positive response from employers otherwise overwhelmed by the complexity of trying to address this issue (and this observation is probably not confined to small employers). It was a pity the last project wasn’t developed further because of the potential to use it as a model of other industries and given the fact that government agency activities with regard to small business (or large business for that matter) overwhelmingly focus on safety. Comparatively little attention has been given to the more effective management of hazardous substances and during interviews for this project few if any regulatory staff raised the matter. This represents a major omission in small business programs, and those relating to flexible work arrangements, despite some disturbing evidence raised in Chapter 2. In a recent paper (Cowley, 2001) points to evidence from both the UK and Australia that a disturbingly number of employers, and especially SMEs, were unaware of regulations relating to hazardous substances, including heavy users. An Australian study of research laboratories (Bailey 1999 cited in Cowley, 2001:3) found only 73% of respondents were aware of regulations, many relied on personal protective equipment (PPE) to control risks and only just over half (54%) had fulfilled a requirement to undertake risk assessment. Cowley (2001: 3) argued that there 287 --
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was too much focus on measurement and monitoring amongst regulators and employers rather than on control measures (including engineering controls). The neglect of hazardous substances by OHS regulators is not confined to Australia and initiatives in relation to small business are therefore relatively difficult to find. However, Dr Tony La Montagne (an epidemiologist now at Monash University) and colleagues undertook a intervention project on this for NIOSH in the USA (entailing careful assessment of the effectiveness of interventions over time). It is recommended that WorkCover NSW officers contact Dr La Montagne for more information on this initiative. In addition to general guidance material several jurisdictions have sought to make their OHSM audit tools either 'small-business friendly', or have developed specific small business products. This material is normally pitched at small firms rather than micro-small businesses. It has also been picked up in more generic documents on risk management. The Queensland Department of Training and Industrial Relations developed a risk management workbook for employees with between 11 and 30 employees covering a range of areas including some OHS issues. In 1997 an assessment of this product by a consultant engaged by the Department (Marketec Colmar Brunton Research, 1997) found a generally positive response on the part of the 64 businesses surveyed. The report did suggest a closer alignment with materials produced by the Division of Workplace Health and Safety and clarification of the threshold for the appointment of a Workplace Health and Safety Officer (30 or more employees). Apart from the production of written material agencies have become increasingly adept in terms of information distribution to small business. In Queensland, for example, the Division of Workplace Health and Safety has conducted information evenings for small business, has launched products in regional centres (where they are liable to receive more media attention) and has, like NSW, used travelling ‘road-show’ exhibitions on particular issues. In South Australia the Small Business Unit of WorkCover Corporation produces a small business newsletter and small business is integrated into activities such SafeWork Week via community-based breakfasts and seminars. The Unit has also sought to develop strategies to address small business OHS problems within specific industries. It has also tried to keep abreast of promising initiatives and developments in other countries. In 2001 the Corporation brought out Dr David Walters from the United Kingdom (who had co-ordinated a large EU project on small business OHS) to draw on his knowledge. Dr Walters spoke to a range of agency staff as well as other interested parties. A number of other jurisdictions (Victoria and NSW) took advantage of this visit. Government agencies in several jurisdictions have begun to explore other conduits through which to lift the OHS performance of small business. In Queensland a proposal for community-based OHS advisors to provide practical advice to small business was considered and possibly (?) trialed. In both Europe (see Walters, 2001 and Manos, 2001) and Australia /New Zealand (see Lamm, 1997) the use of intermediaries such business advisors/accountants and insurers has been proposed as a more effective means of getting small business to treat OHS seriously. Lamm (1997) who undertook research on small business OHS in both New Zealand and Queensland has persuasively argued that accountants are the one critical source of professional advice used by all small businesses. The Small Business Unit of the WorkCover Corporation of South Australia has picked up on these ideas and, in conjunction with the CPA, has developed a brochure Accounting for Safe Work that explains why (in terms of risk management and business performance) accountants should apply safe work principles in their own workplaces as well as influencing their clients. In addition, research has been commissioned on the cost/benefits of investing in safe work practices by small 288 --
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business and a consultation process initiated with state-based accounting bodies. The latter aims to get a better understanding of the needs of accountants in relation to safe work practices (for themselves and their clients) and the development of tools (including internet based tools) to assist them offer a value adding service to small business. In the European Union Walters (2001) describes and assesses a number of analogous developments involving various intermediaries. The possibility of using intermediaries to enhance OHS performance by small business warrants serious consideration. As part of this it is recommended that WorkCover NSW examine developments in other Australian jurisdictions (especially South Australia) and that those involved in developing such programs familiarise themselves with initiatives in the European Union (see the SALTSA project and Walters, 2001). Walters (2001 and 2001a) argues that participatory mechanisms involving workers and unions also have a critical role to play in the development of effective interventions with regard to small business. They provide a crucial support for otherwise narrow 'partnership' models and a source of intervention in their own right. An example of the later is the Swedish regional safety representative model, which involves roving industry-funded HSRs who can visit small enterprises and assist workers (and managers) in resolving OHS issues. In so doing, they provide both a source of OHS expertise and a form of representation for a group of workers that would otherwise lack consultative/participatory mechanisms (see Frick and Walters, 1998). One issue that may require more attention is in relation to labour leasing. While the normal presumption is that it is medium to large firms that use leased labour at least one agency pointed to small firms engaging in this practice where labour hire firms themselves had reported serious deficiencies in OHS management. 7.3.7.2 Targeted Prosecutions and Enforcement Strategies Much of the efforts in relation to small business have relied on persuasive ‘carrots’ rather than regulatory ‘sticks’. In Queensland, NSW and several other jurisdictions some attempt has been made to combine the two by targeting particular sectors and following information campaigns with inspectoral blitzes (using a range of penalties including on the spot fines). However, as yet such enforcement activity remains sporadic rather than systematic. As already noted, inspectorates simply lack the resources to maintain an adequate level of contact with small business. More regular contact would not only identify those small business sectors requiring most attention (beyond those that already well-known such as building and construction) but it would be likely to reduce the need to rely on prosecutorial activity. The resourcing issue cannot be ignored. Where small business operates in highly competitive industries appeals to ethical considerations or ‘OHS is good for business’ are, of themselves, likely to be insufficient. The short life cycle and high turnover of small business operators is also not conducive to strategies dependent on adopting a long-term perspective. Rather, a climate to compliance needs to be created using the appropriate mixture of tools and this may vary from industry to industry depending on the circumstances (for a discussion of these issues in the European context see Walters. 2001). As Walters (2001a: 3) also observes achieving positive results requires an appropriate balance of advice and enforcement and this is consistent with a number of small business initiatives in Australia that were described in the subsection on subcontracting. Walters (2001a: 3) also observes: To improve the level of compliance of small firms in recent years the agencies of the formal health and safety system have paid considerable attention to contact
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techniques. Although an enormous variety of arms-length tools have been developed, most successful interventions are nevertheless associated with face to face contact between small business owner/managers (as well as workers) and health and safety agents themselves (whether they are inspectors or prevention specialists) (Rakel et al 1999 and Wright 1998).
In broad terms Walters' assessment is entirely consistent with the description of small business initiatives in Australia. A considerable effort has been put into the production of more effective forms of documentation and other modes of dispensing information. Less effort has been put into the implementation of positive programs and associated enforcement activities. Given the success of a number of 'on the ground' programs the reasons for this bias or rather failure to follow up information provision cannot be ascribed solely to ignorance. Rather, to a significant degree it is a product of the limited resources that inspectorates have at their disposal. Unlike the Australian Tax Office they cannot marshal dozens (if not hundreds) of officers to address a problem area or industry. Leaving resourcing aside, government agencies are becoming more adept at shaping their enforcement measures and remedies to enhance their ability to modify small business behaviour. Historically, it has been suggested that two limits on prosecutorial activity in relation to small business have been an understandable desire not to impose a double penalty on a small business operator where immediate family members were injured or killed as a result of the offence or to drive small firms out of business. The option of probationary sentencing provides a solution to this but thus far it has not received serious attention despite being proposed for some years. Another issue that deserves recognition is the question of OHSM. In recent years virtually every Australian jurisdiction has promoted the development of systematic OHSM (via audit tools such as SafetyMAP and the mandating of risk assessment in NSW). Indeed, this has become an increasingly significant part of agency policy development and enforcement activity. At the same time, there are real questions as to the applicability of such an approach to small business (for a European discussion of this point see Walters, 2001) and indeed to situations where there are significant numbers of contingent workers more generally (see Quinlan and Mayhew, 2000). One solution to this dilemma proposed by Gunningham and Johnstone (1999) is a two-track enforcement model. While there are potential limitations to this model (notably that there are actually critical interactions between the two types of employers identified by Gunningham and Johnstone) it does provides a starting point for a more systematic approach to enforcement that recognises differences in compliance capacity and intent. Indeed, it is notable that Denmark, where small business dominates employment, the inspectorate uses a enforcement strategy that explicitly recognises differences in compliance capacity and intention. It is suggested that serious consideration be given to implementing the two track enforcement model as this would allow WorkCover to more systematically relate enforcement measures to the more collaborate initiatives identified in the last subsection. 7.3.8.3 Conclusion Overall, small business is one area where OHS agencies in Australia have devoted considerable attention in recent years and where some genuinely innovative initiatives can be identified. There is a growing awareness that interventions must incorporate practical solutions to affect change and give small business managers and workers the requisite skills to 290 --
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implement them or what Zwestsloot (2000 cited in Walters, 2001: 170) has termed the ‘knowledge infrastructure of occupational health and safety.’ However, under-resourcing remains a major issue. The use of intermediaries such as accountants and industry or professional associations can assist in bridging this gap and more effort should be put into developing programs in this area. Nonetheless, this is at best a partial solution to the resourcing issue. As noted elsewhere in this report, Australian evidence indicates that HSRs have lifted the level of OHS management (see for example Biggins et al, 1991) but of course they are seldom found in small enterprises. In this regard the Swedish model of regional safety representatives provides a viable means of not only giving workers in small enterprises a source of representation but also a way of lifting the standard of OHS management (see Frick and Walters, 1998). This option, for which there are already some analogies in Australia (notably regional check inspectors in the mining industry) is worth following as it addresses two major limitations in the current regulatory environment as far as flexible work arrangements are concerned (with additional flow on effects to subcontractors and temporary workers being used by small business). While it would not fully offset the need for some additional resourcing of the inspectorate it is likely to reduce such requirements in a cost effective fashion. It is worth noting that Walters (2001) identifies the almost complete failure of the small business literature to refer to the issue of participation as one of its most striking and serious shortcomings. He argues identifies a number of other participative initiatives in EU countries that are worthy of consideration. 7.3.8 Volunteers and Other Special Category Workers As noted in Chapter 5 a number of government agencies referred to the emergency services as providing a model for managing safety in relation to voluntary workers. It was noted that state emergency services had good management systems in place, including incident reporting mechanisms, rigorous systems for inducting staff, and ensuring staff had both OHS committees and trained worker OHS representatives. A national training body based in Adelaide was also seen as playing a valuable role in this. The Emergency Services Administration Unit has a staff of 25 plus additional funding to manage systems for training, including OHS (and internet access for those training to be health and safety representatives). Agency staff saw this approach as being an outcome of the concern of these bodies to manage risk in situations where danger was a given, an appreciation that the staff they were deploying were volunteers, and the fact that these workers were covered for workers’ compensation (see Chapter 11). It was also noted that government funding to support the infrastructure (including OHS) was another critical difference to most voluntary organisations. A number of OHS agency staff saw examining means of providing similar financial support to voluntary organisations to better manage their OHS as an issue worthy of consideration. Indeed, if this was connected to an industry-based (and partially-funded) mentoring process such an initiative might prove very cost effective, especially in the context where such bodies are beyond the modest enforcement resources of government OHS agencies. Other agency staff remained less convinced that the emergency service could be applied as a model for other not-for-profit or voluntary organisations, pointing to unique characteristics of this sector. This included the complex systems that these services needed to use and which OHS could easily be dovetailed into, as distinct from many other voluntary bodies like bowling clubs, childcare centres and the like which, at best, possessed only the simplest form of management system. The most 291 --
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obvious alternative approach was to treat these bodies like small businesses and try to get them to target their two or three major risk factors directly while hopefully ‘piggy-backing’ some system messages and features into this. 7.3.8.1 The Provision of Information, New Codes/Regulations and Collaborative Ventures with Industry In chapter 4 a number of problems were identified in relation to group training providers that were in many respects analogous to those found in relation to labour hire/labour leasing. In South Australia concern at the rising workers’ compensation costs associated with group training providers led to the initiation of a project in 1995 (briefly suspended and then recommenced in 1997) into improving injury prevention (Wilson, no date). The specific objects were to assist group training companies implement effective hazard identification, assessment and control procedures, the development and delivery of OHS training to responsible officers and the provision of information to host employers so they could meet their legislative obligations. In contrast to Queensland (see below) the project found that while both the host and provider had obligations under OHS legislation the primary responsibility should rest with the latter. The project found most providers (like many small businesses), lacked written information sources/needed direct personal contact, failed to identify OHS problems and that the good systems they often had for managing skills development did not translate into a similar approach to OHS – rather their response was usually ad hoc. The project recommended the introduction of a systematic approach to OHSM and developed a benchmarking tool to be used in conjunction with this (Wilson, no date). With regard to prostitution (many of the participants could be regarded as independent contractors) the response of OHS agencies is clearly influenced by the legal status of brothels (and even where these can be legal there are still illegal operations not to mention ‘street walkers’). A number of agencies have sought to provide OHS information to ‘sex-workers’ (though Health Departments are probably more active in this regard). In Queensland a brothel licensing system has been introduced with the opportunity for more directly implementing controls. The Queensland Division of Workplace Health and Safety worked with the licensing authority in developing their licensing guidelines so OHS criteria are now part of these guidelines (although as at the end of 2001 only a tiny number of brothels had obtained a license). Yet, despite this, agency staff expressed the view that doubt remains as to whether prostitutes in a brothel constitute workers within the meaning of the Workplace Health and Safety Act 1995. It was also noted that many work on a casual/temporary or part-time basis. Overall, it appears as though no jurisdiction has a comprehensive or systematic approach to voluntary workers. By way of contrast, in Britain a joint HSE/Charities Safety Group produced guidance material (including a video training package) on OHS for charity and voluntary workers in 1999. This report was unable to examine this material but it may serve as a useful reference point for similar developments in NSW and other Australian jurisdictions. 7.3.8.2 Targeted Prosecutions and Enforcement Strategies As noted in Part 1 of the report, a number of regulatory agencies have become concerned about the degree of protection afforded to workers in group training schemes, work-for-thedole schemes and similar arrangements by training providers as well as host employers. There have been attempts to clarify the regulatory situation. For example, s10 of the Queensland 292 --
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Workplace Health and Safety Act states that apprentices in group-training scheme are, for the period when they undergoing work experience with a specific employer, deemed to be an employee of that employer and when they return to the group-training organisation are deemed an employee of that body. At the same time, this approach has raised some concerns in terms of the precedent it might set for other arrangements, most notably labour hire. While, as already noted, labour hire firms would prefer a similar approach to labour leasing (essentially releasing them from obligations once a worker has been placed with a client) this is not likely to be an approach that would win favour with OHS agencies or unions (if only for fear such an approach would encourage labour hire agencies). Even in Queensland the special status accorded to apprentices has not carried over to other categories of workers. For example, Welenco Training and Development Limited was convicted and fined $3,500 in the Rockhampton Industrial Magistrates Court under s30(1) of the Workplace Health and Safety Act 1995 for not ensuring the risk of injury or illness from a workplace was minimised for persons coming into the workplace for work. This followed an incident where long-term unemployed persons engaged by Welenco in restoration work at the Wintergarden Theatre in Rockhampton were exposed to lead while removing old paint work without proper protection or access to washing facilities (Safety Zone Feb/March 2002:15). While these prosecutions clearly send a message it is a yet to early to assess their effects or even, given the small number, refer to this as more than the potential beginning of a targeted enforcement strategy. Another special group often employed in casual/temporary jobs (and therefore also discussed under that heading) are illegal immigrants. None of the agencies raised this as an area being targeted in terms of enforcement although the acute vulnerability of these workers to being put at risk in industries like construction was generally acknowledged. One factor here might be the lower level of illegal immigrants in Australia than say the USA or EU although there is something of a presumption here given the lack of reliable data and growing anecdotal evidence of an expansion in recent years. Protecting such workers is from a regulatory perspective especially difficult given the reluctance of such workers to approach authorities or make complaints. This problem is well recognised in the USA where in recent speech the Senate Subcommittee on Employment, Safety and Training, the Assistant Secretary of Labor for Occupational Safety and Health, John J Henshaw (2002) stated: In responding to immigrant worker deaths, the Agency (OSHA) often encounters a difficult situation because sometimes workers are afraid to speak out about unsafe or unhealthful conditions for fear of being deported. OSHA routinely pledges to keep the identity of informants confidential. In addition, OSHA informs all workers of their rights under the OSH law, including the whistleblower protection provisions under section 11 (c), which forbids employers from discriminating against or discharging workers for making safety and health complaints under the OSH Act.
In the USA the situation regarding illegal immigrants seems to have escaped the control of immigration agencies. There appear good grounds for avoiding this situation in Australia as a way of pre-empting these problems. However, unions and others spoken to in the course of this project complained that short-term and 'education' visas had facilitated illegal immigration. Yet another special category of workers is child workers. As noted above, child labour has been associated with home-based work. Child workers are found in small business situations, 293 --
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often where they are assisting parents or relatives (in a retail outlet for example) as well as casual and informal types of paid employment for a third party (doing letter box drops for example). As with home-based work, the extent of child labour is unknown. However, child employment is believed to be extensive, and the regulatory problems posed significant enough, for the Victorian government to establish a review to examine, amongst other things, the adequacy of existing laws. In particular, there was concern that existing regulatory controls were no longer appropriate or effective. In October 2001 the Government has released an issues paper (Victorian Government, 2001) and called for submissions, receiving detailed submissions from bodies like the Victorian Trades Hall Council (VTHC). Both the issues paper and the Victorian Trades Hall Council submission emphasise the vulnerability of child workers and both devote considerable space to OHS issues (amongst other things, the VTHC cites WorkCover Victoria data that indicates that children constitute 5% of workrelated fatalities in Victoria). While the regulatory situation in Victoria differs from NSW the findings of the inquiry warrant attention, as some of the recommendations may be relevant to NSW. As noted in Chapter 4, the employment of children/teenagers (under 18 years of age) has emerged as a serious OHS issue in the USA with moves to renew and extent legislative prohibitions on their employment in certain sectors. In Australia there is a serious dearth of information on this issue but it would appear to warrant closer attention. 7.3.9 Combined Regulatory Strategies At a number of points reference has been made to the difficulty of addressing complex supply chains and arrangements where the work is relocated on a regular basis or to sites that are remote from the principal. Examples of this include elaborate subcontracting arrangements and labour hire firms as well as more transitory telecall centres. The key problem for any regime of enforcement of workplace safety obligations is trying to find out exactly where the work is being performed and under what conditions. One necessary ingredient in any effective regime of enforcement is the creation of an obligation to inform the enforcement authorities about the actual location of the workplace. This is not a new problem. It was a critical factor in the requirement to register factories and other workplaces when OHS statutes were originally developed more than 100 years ago. Indeed, small workplaces and subcontractors were a significant issue at this time. Changes in industrial structure in the postwar period brought these requirements into question and compulsory registration provision were dropped by most jurisdictions in Australia. Ironically, however, the growth of more flexible work arrangements in the past 20 years has created problems of locating and regulating workplaces that are not too dissimilar from those regulators grappled with a century or more earlier. Without some means of identifying workplaces for the purposes of inspection and enforcement regulators face enormous difficulties in a number of industries where elaborate subcontracting chains are the norm or where workplaces relocate on a regular basis (and these problems become more widespread as subcontracting/outsourcing of tasks grow). Consequently, OHS regulators are beginning to consider and indeed reintroduce requirements for the registration (and public disclosure) of workplace locations. For example, the NSW government has now reintroduced the system of factory registration for the textile, clothing and footwear sector. Since 1 January 2002, the new ‘Occupational Health and Safety (Clothing Factory Registration) Regulation 2001’ has required workplaces in the textile, clothing, footwear, felt hatting and button-making industries to be registered on a publicly available register. In particular, this new factory registration regulation requires the public disclosure of the specific address at which each of these factories is located, and the number of workers present at the workplace. In earlier sections of this report, evidence was cited 294 --
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where both OHS and workers’ compensation authorities have encountered difficulties in relation to not only locating workplaces (and ensuring they stay located!) but also keeping accurate records in relation to the number workers employed (legally and otherwise). This issue requires broader consideration. In addition to the issue of workplace registration there are broader questions in relation to the enforcement of minimum OHS and labour standards and, indeed, the connection between OHS, workers’ compensation and minimum standards pertaining to wages, hours and other working conditions. It is perhaps more than coincidental that the clothing industry presents an illustration of this approach. Since this approach covers both prevention and workers’ compensation it is addressed in Part 4 of this report, which is explicitly concerned with regulatory collaboration (both in terms of inter-agency co-operation and integrated legislative packages and enforcement programs). The same point applies to the question of specific regulations, including licensing, of the labour hire industry. 7.4 Conclusion This chapter examined the regulatory responses to a number of OHS problems posed by particular contingent work arrangements. All regulatory agencies spoken to in the course of the project recognised changing work arrangements as presenting a major challenge and one they were beginning to address. It is fair to say that these challenges have come at a time when many agencies feel they already have ‘a lot on their plate’ in terms of existing commitments, including continuing the long term shift to process standards. Not unconnected to this, staff in several agencies interviewed expressed discomfort in dealing with issues of work organisation or psychosocial factors (such as the effect of flexible work arrangements on work/family balances) because of the complexity and the ambiguity in terms of defining the boundaries of the agency’s responsibilities in this regard. At the outset it must be noted that most agencies were aware of serious deficiencies in workers’ compensation claims data as a basis for driving interventions and that this problem was especially acute in relation changing work arrangements. This has implications for all the remedies summarised in this conclusion. Agencies for developing a number of alternative sources to address these deficiencies including developing hospital based work injury reporting systems, conducting industry surveys and using targeted workplace audits. Workforce survey data may be especially useful as this mechanism is more attuned to collect information on work organisation and psychosocial factors (as demonstrated by the major workforce survey conducted in the EU by the EFILWC) and perhaps even disease, which is substantially understated in workers’ compensation data. These initiatives are important and require further development at both jurisdictional and national level. Therefore a multijurisdictional dialogue on this issue to exchange information and work towards a more coordinated solution would be extremely valuable. The need for additional sources of information to meet omissions in existing data sets due to changing employment arrangements has been at least partially recognised by several OHS agencies overseas. In the UK, for example, the issue of health surveillance record retention of a job mobile workforce has been under consideration for several years, with a view to incorporating it into the more general health surveillance and promotion program of the country (HSC, 2001: 14). In addition, another project examined the use of Labour Force Survey data to produce information on injuries and worker characteristics. A research report commissioned as part of this (and cited elsewhere in this report) found a significant elevated risk of injury amongst young males, and workers who were new to their job (HSC, 2001: 16). 295 --
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It needs to be stressed that the suggestion here is not to entirely abandon the use of workers’ compensation claims data. In addition to providing one set of indices of OHS outcomes in an industry, workers’ compensation data could be used in innovative ways to measure the effects of downsizing (as Park and Butler, 2001 have done with regard to Minnesota and a project initiated by WorkCover NSW), leased labour (as in South Australia) and multiplier/supply chain effects on compensation claims of new industries or periods of economic expansion/contraction. A relatively minor modification of claim recording forms would enable agencies to distinguish claims by permanent and temporary workers (as has been done in Washington State in the USA). More encompassing coverage provisions would, if successfully implemented, make claims data more valuable too. While these avenues are all worth pursuing some deficiencies will take time to address and gaps are likely to remain, the relative significance of which may well vary substantially between industries. Hence, workers’ compensation claims data will need to be used in conjunction with other sources. Having dealt with the question of collecting better information on these issues the remainder of this conclusion will examine the major types of agency responses. 7.4.1 The Provision of Information, New Codes/Regulations and Collaborative Ventures with Industry Over the past decade, and more particularly the last five years, regulatory agencies throughout Australia have made increasing efforts to provide information addressing the OHS issues posed by changing employment arrangements. Despite this, the scope and coverage of this information provision remains narrow and patchy. In some areas, like small business and subcontracting, information has been produced for various stakeholders (employers, workers, subcontractors) and both the content/methods of delivery as well as the number of relevant parties targeted/reached has been improved. Even in these areas, however, information provision remains partial and inadequate. In relation to other work arrangements, such as temporary work, most home-based work and organisational restructuring/job insecurity little or no information has been provided. Reference was made to a number of initiatives in relation to the management of contractor/subcontractor OHS, most notably in the building and construction industry, in Queensland and NSW which were developed with industry/union input and can be viewed (on the basis of assessment as well as the views of all involved) as having both immediate value and the potential to be extended to other industries. As was noted the initiatives are consistent with a better articulation of both general duty requirements in OHS legislation and the increasing emphasis that regulators are placing on risk assessment and control – though demonstrating this link to all concerned will require appropriate enforcement activity. Despite their merit and potential these measures remain exceptional. In essence, work plans/safe work methods and network minimum safety requirements/safety performance meters can both be viewed as prescribing risk assessment/risk control measures that are consistent with the broader development OHS management as a regulatory strategy in Australia and other countries (such as the European Union). There is an apparent paradox here that needs to be explained. On the one hand, the growth of contingent work arrangements can be seen to weaken the basis for systematic OHSM because it entails more small businesses and small workplaces, more fragmented and disorganised work-settings, weaker worker/union input and interest group incentives that weakens the coordinating role of management and 296 --
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enforcement by regulators (see Quinlan and Mayhew, 2000). On the other hand, instruments like work plans etc can become devices for addressing the OHS problems raised by contingent work arrangement because they systematise OHS management across a range of different parties. How are we to reconcile the apparently conflicting observations that contingent work undermines systematic OHSM but systematic OHSM can also be used to address the issues? The answer is that the OHSM devices used to manage the difficulties posed by subcontracting or other forms of contingent work have two defining characteristics. First, they are specifically targeted in terms of risk factors addressed and the relative responsibilities of the parties (the work plan, MOU and other remedies discussed all focused responsibility for ensuring overall compliance at the peak or top of the ‘food’ chain ie major contractors etc). Second, compliance is mandated by regulation or a combination of regulation and industry commitment. In this regard it is worth noting that a major factor in the introduction of internal control (a mandated form of OHSM) in Norway was concern at the impact of subcontracting on safety in the offshore oil industry. Finally, in the course of this chapter a number of industry-specific ventures were mentioned including several where an organisation existed to promote OHS (eg via the provision of training). Government agency staff in several jurisdictions indicated that they believed this approach could and should be expanded because it afforded employers with a clear reference point to get practical support (via mentoring, access to information etc) to start resolving their OHS problems. To be successful such an approach required adequate resources and incentives for employers and workers to take part. 7.4.2 Contract tender requirements and minimum labour standards As was noted in Part 1 of this report, the fact that some groups of contingent workers are not covered by minimum labour standards (in Australia such standards are normally enshrined in industrial awards and agreements rather than via direct legislative instrument) has been identified as a source of OHS risk both to themselves and others working alongside or in competition with them. Recognition of the acute nature of these problems in several industries, notably clothing and road transport, has led to specific reform packages or proposals that were discussed in this chapter. Such moves are not unique to Australia. The link between minimum labour standards and OHS, especially in industries with a large contingent workforce, has been recognised in other countries. For example, following considerable debate and deliberation the European Union Council of Ministers and the European Parliament have agreed to extend the Working Time Directive (which establishes minimum standards for working hours throughout the EU) to the transport sector. At the same time, the consequences (safety, social, economic and professional) of including/excluding the large and growing category of self-employed drivers will be the subject of a report to be prepared by the European Commission (European Agency for Occupational Safety and Health, OSHmail 8-2002). More broadly perhaps, quite apart from the most extreme cases of outright regulatory evasion there are also questions about how to achieve integrated OHS management in the situation of elaborate or multi-tiered supply chains where sheer fragmentation of legal responsibility as much as the pressure of dependent relationships is a matter for concern. This report identified a number of initiatives that addressed this issue (such as chain of responsibility in trucking and the MOU in construction). The European Agency for Safety and Health at Work has initiated research into marketing and procurement that deals, in part, with the selection of subcontractors and providers on the basis of OHS performance (see Gourdswaard, 2002: 39). 297 --
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Amongst other things, this project tries to see whether the interest of large firms in quality can be used to promote OHS amongst their suppliers. It would be highly desirable for agencies to exchange of information on such developments. At the same time, it needs to be recognised that while the power of large firms may a valuable in promoting OHS ‘down the chain’ it is equally important to ensure that similar attention is applied to those who may sit above the ‘principal contractor’ where this affects OHS. 7.4.3 Targeted Prosecutions and enforcement strategies Though not specifically remarked upon in the course of this chapter, research for this project revealed that OHS agencies are becoming increasingly adept at targeting enforcement activities using a range of devices (including publicised blitzes and selective prosecutions) and this can also be seen with regard to changing work arrangements. Notwithstanding the shortcomings that were identified, agencies have developed a pattern of prosecutions in relation to outsourcing and labour hire and beginning to turn their attention to temporary work. It is also fair to say to that in most of these areas WorkCover NSW has been at the forefront in terms of targeting serious breaches arising from a failure to manage particular work arrangements (such as labour hire). Another noteworthy feature of the NSW approach is that a specialist bench, namely the court of the NSW Industrial Relations Commission, hears prosecutions Members of the NSW IRC, unlike county or stipendary magistrates (who may only hear the odd case) have been able to develop the requisite specialist and background knowledge of OHS. This not only facilitates consistent decision-making but also the capacity to recognise changing conditions in the world of work. Parts of a number of judgements cited in this report amply demonstrate this. Another commendable aspect of the NSW judicial system that has some relevance to its capacity to react to problems raised in this report is the educative operations of the NSW Judicial Commission that provides the IRC and other branches of the judiciary with the opportunity to enhance their knowledge of particular areas (such as labour market changes) that may be relevant to carrying out their functions. Another aspect of targeted enforcement not canvassed in much detail in this chapter is how OHS agencies are to respond to the increase demands of addressing these issues, including increased administrative and logistical demands identified in chapter 4, with limited resources. In terms of addressing this, a number of agencies made reference to the two-tiered approach to enforcement advocated by Gunningham and Johnstone involving the encouragement of self-regulating OHSM amongst larger employers and a more forceful and prescriptive approach to problem areas like small business and subcontractors where employers have difficulty complying. This approach is seen to have much merit although it needs to be recognised to the two spheres are not as distinct as might first appear (since, for example, large firms outsource and use leased labour). Even so it was recognised more resources would still be needed and several agencies reported that their funding base was being improved. 7.4.4 Final Observations This chapter identified a number of potentially valuable initiatives being undertaken by jurisdictions across Australia. However, it also identified a number of limitations and omissions, most notably: o Thus far the response of regulatory agencies has been very patchy with many gaps, as in the case of temporary workers and most home-based workers 298 --
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o Even in relation to work arrangements where the problems have been recognised for some time, as in the case of subcontracting/outsourcing, the regulatory response is still patchy. o Very few initiatives, whether they are in terms of information or collaborative ventures, targeted enforcement or minimum labour standards, have been subject to assessment, especially independent assessment. Prominent exceptions include the NSW MOU/’Subbypack’ and Queensland building industry safe work plan initiatives – both of which have yielded positive results. There is indirect evidence of the impact of other initiatives such as prosecutions but more assessment of policy interventions is needed. To a large degree, the lack of assessment of policy interventions in relation to changing employment relationships reflects a more general failing by OHS regulators in this area. The existing shift to a more targeted and goal driven approach on the part many of these agencies (following similar developments overseas) is almost certain to address this issue as it requires more rigorous assessment of policy interventions. It could be suggested that a number of the recurring problems in connection with changing employment relationships identified thus far, such as the failure to properly induct or train subcontractors and temporary workers, their ignorance of critical informal rules in relation to safety, the absence of adequate OHS protocols in relation to home-based work, and the failure to see organizational restructuring/downsizing as constituting a significant change to the workplace in terms of OHS, are essentially a failure of employers and others to meet their general duties or undertake adequate risk assessment and control measures. There is the possibility that as employers and others strive to meet the regulatory requirement to undertake risk assessment in NSW at least some of these problems will be recognized and addressed. In short, if employers and other parties had a better understanding of their duties/obligations under the principle legislation and regulations and sought to meet these then there might be no need for special initiatives in relation to outsourcing, temporary work and the like. There is merit in an argument for better informing employers and others of what they are required to do under OHS legislation in relation to changing employment relationships via both the provision of information and selective high profile prosecutions to emphasise the point. At the same time, one of the more disturbing observations made repeatedly during the course of interviews was that the growth of these arrangements was contributing to more confusion and less understanding of their legislative responsibilities amongst employers, contractors and labour hire firms. Another observation can be drawn from the foregoing, which is that the response of both employers and regulators to these issues is essentially reactive. As evidence of problems mount in a particular area then responses are formulated in an ad hoc fashion. Thus, we only get attempts by industry and regulators to develop protocols in relation to homecare services well after these changes are initiated. As in the case of much outsourcing, it never formed part of the planing process for this change by large organisation – organisations that clearly had the resources to do this. There is logic to responding to evidence of problems and a number of the remedial measures adopted have, as far as we can judge, merit. Some regulatory staff argued against tendencies to conflate issues, for example, arguing labour hire posed rather different challenges to subcontracting. It was also suggested that, in some cases at least, there was a need to tailor remedies to the specific needs of an industry. Again, there is merit in both these arguments. It is also fair to recognise that their limited resources have shaped the reactive approach of 299 --
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government OHS agencies. This problem was not raised by agencies themselves but was referred to by a number of employer association and union representatives. Nonetheless, the overall result is a patchwork quilt of measures with many gaps and little by way of a coherent understanding of where shared problems might form the basis for a more integrated regulatory strategy. In other words, the individual measures should constitute part of a more comprehensive strategy. In many respects ad hoc responses condone an approach from employers and other parties where no real attempt is made to anticipate or take precautions against the adverse OHS effects of workplace changes (even where the consequences could be predicted on the basis of a cursory knowledge, examination or discussion with those involved). It also essentially means risk assessment is a post hoc activity irrespective of general duty references to the need to take account of the OHS consequences of changes to systems of work. The absence of a comprehensive or systematic approach to addressing OHS issues associated with changing employment arrangements is by no means unique to Australia although, as noted in the introduction to this report, a number of agencies in the European Union and North America are trying to establish information to form the basis for such an approach. In the United Kingdom the Health and Safety Commission (HSC, 1996) prepared a broadranging discussion paper on the issue in 1996 and five years later (HSC, 2001) it undertook a systematic review of the program of work initiated in relation to this. Much of the work undertaken under the program was research into or analysis of problems identified in the 1996 paper, including the ‘apparently’ self-employed, contractorisation, agency workers, mobile workers and home-based workers (HSC, 2001: 2). The review recommended that work on these areas continue. At the same time, noting a number of labour market changes the review urged that a number of additional areas be prioritised for further activity including the aging workforce, the growth of fixed term contract jobs (and issues of job tenure) and the growth of part-time work (HSC, 2001: 4). At the same time, as research for this project clearly indicated, OHS agencies throughout Australia (and some employers and industry groups as well) are turning their attention to the broader issues, and doing so without losing sight of the value of highly targeted interventions. The May 2001 meeting of agencies and the social partners in Sydney and the outcomes of this are clear evidence of a the emergence of a more strategic response. Hopefully, this report will also contribute to this process. At has been indicated, the problems confronting government agencies, employers, OHS professionals and unions arising from labour market changes are substantial. The fact that the same issues are causing concern in other industrialised countries, and that leading government regulatory and research agencies in EU and elsewhere are beginning to address them provides an opportunity for establishing fruitful exchanges of information, experience and potential remedies. This would assist in reducing the resource demands of addressing these issues although it will not eliminate the need for additional resources to be made available to agencies. This is not only because of the scope of the problems but also because the sorts of interventions that are likely to prove most effective require far more than the production of guidance material and a few salutary prosecutions. They require the staff and logistical resources to collect better sources of information, to facilitate collaborative ventures at industry level, to reinforce this with astute enforcement measures and to undertake evaluation and improvements over time. It also affords opportunities to examine other policy developments, including the integration of OHS with improvements in work quality and productivity. In the European Union, for 300 --
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example, the OHS challenges posed by changing employment relationships have been incorporated into a broad debate over future policy with regard to the quality of work, a policy debate that involves governments, employers and unions (see example, EFILWC, 2001, ETUC 2002).
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Chapter 8 Voluntary initiatives by employer/industry associations and individual employers 8.1 Introduction In recent years employer and industry organisations have become increasingly interested in the issue of changing work arrangements from an OHS perspective. The reasons for this are not simply to do with pressures from unions or government agencies (including inquiries and proposals for legislative changes) but also feedback from their membership as problem areas are identified. In terms of servicing member needs a number of employer organisations have produced information and guidance material (including web-based material) on managing the OHS risks associated with outsourcing, telecall centres, labour hire, small business or for industries where temporary work is widespread (such as hospitality). As with government agencies and unions (see below), other growing types of work arrangement, such as temporary work, have yet to receive much attention. As with unions, the training (of OHS officers and short courses) activities of employer associations may also play a positive role in this area although this aspect was not really explored in the course of this project. Several employer organisations (most notably the ACCI, 1999a) have produced discussion papers on changing work arrangements or, like the Australian Industry Group (AIG) have commissioned their own research (see ANOP, 2001). The ACCI (1999a) information paper on the potential OHS effects of labour market change canvassed a wide range of work arrangements, including job sharing, subcontracting/outsourcing, casual work, fixed term contracts, part-time work, labour hire and telework. The paper acknowledged that there was a growing body of Australian and international evidence that contingent work arrangements were associated with inferior OHS outcomes such as increased injuries before proceeding to discuss particular work arrangements and how employers might respond to them. The paper was important in alerting employers to the issues and opening up a dialogue on how they might best address problem areas, including the value of ‘best practice’ human resource practices as well as the positive role that employer organisations could play in providing information, advice and other assistance to their members. While the AIG commissioned report (ANOP, 2001) was primarily designed to examine worker attitudes in five industries to the ACTU’s reasonable hours test case (see next chapter), the industries examined included IT, call centres, labour hire and construction and OHS was included in the responses examined. The ACCI commissioned its own report for this test case by a labour market expert (Wooden, 2001a), which addressed issues such as part-time work as part of its discussion of changes in working time patterns. The high quality testimony of this expert and those called by the ACTU resulted in an especially informed body of evidence being presented to the AIRC to assist it in reaching a decision. This evidence only incidentally pertained to issues that are the subject of this report but is mentioned as indicative of a growing debate over working arrangements in Australia. The OHS challenges posed by changing work arrangements and how to manage them has been an increasing common topic in management newsletters and at industry-specific OHS conferences or a special topic at the annual conferences/conventions run by particular industry 302 --
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associations. The author of this report has been invited to speak on these issues at around 20 such conferences in the past three years as well as contributing to a number of products designed to assist management address the issues. On the other hand, a number of employer associations spoken to have adopted a ‘wait and see’ attitude to evaluate how problems are developing. In one jurisdiction (not NSW) an employer association said it had approach the government OHS agency for persons with expertise to speak on a range of issues including home-based work only to be told this expertise was not available. The remainder of this chapter will deal with employer initiatives in relation to particular work arrangements that have been seen to pose OHS problems. 8.2 Outsourcing/Subcontracting Outsourcing is the changing work arrangement issue most widely recognised by both employer/industry associations and individual employers in terms of its potential to undermine OHS management. It is also an area where employer and industry associations have become increasingly active. This activity includes providing guidance material (including web-based products) and individual advice to members about managing their risks (including practical tips and legal obligations) as well as developing collaborative ventures (such as the development of induction/training ‘passports’ for contract staff). Individual employer responses have ranged from complete apathy or active attempts to minimise legal responsibility through to the development of specific policies (sometimes minimalist and in other cases encompassing) in relation to some groups of contingent workers (most often subcontractors). Relatively detailed subcontractor safety programs often entail mandatory induction and training, tender/contract requirements, special rules and discipline procedures. However, as argued elsewhere (Mayhew and Quinlan, 1997a), these controls are unlikely to work unless they are informed by an understanding of the risks and why they arise, effective monitoring/auditing and, perhaps most of all, a strategic assessment of all outsourcing decisions. While we have no definitive data it now appears that many medium to large companies making extensive use of subcontractors have produced specific contractor safety manuals or modified their existing OHS policy to incorporate reference to subcontractors. A decade ago companies often simply provided contractors with a copy of the organisation’s safety policy and contractor safety manuals often focused almost entirely on workplace rules (Mayhew and Quinlan, 1997a). Standardised workplace rules are an important element, especially if a clear connection is made to specific hazards like chemical storage, forklifts or trucks on site. Some companies have sought to reinforce these rules with a disciplinary system, ranging up to “three strikes and you’re out”. However, rule adherence indicates a predominantly legal liability response rather than process/systems approach to contractor OHS issues. Obeying rules alone will not secure a safer workplace. Further, obedience is also unlikely unless other issues have been addressed, such as ensuring knowledge of these rules gets to workers actually carrying out tasks, and ensuring a level playing field for OHS considerations during the contract tender process. More recently there is evidence that a growing number of organisations have recognised the limitations of a rule-based approach and provide more comprehensive programs/manuals that form an integral part of their OHS management system, including stringent contractor induction and control systems. In the course of interviews for this project, regulators made reference to what they saw as positive examples in this regard. One referred to a manufacturer 303 --
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in the automobile industry that established a computer-based induction process to be undertaken by all contractors before they came on site. The system was designed for users with little computer literacy, all questions had to be answered, and only after successful completion was a permit issued to enter the site. This permit was restricted to a particular area (say the body shop) and range of tasks, and was to be shown to the area supervisor before work could be commenced. To move between areas or change tasks it was necessary to go through another induction process specifically designed to acquaint the contractor with the relevant company policy and procedures. It was also noted in passing that the same company had made a conscious decision not to use labour hire because of concerns about guaranteeing the quality of skills of workers supplied. Unlike the supplying of written rules or manuals, mandatory and multi-modal induction and control programs like that just described have a better chance of ensuring contractors understand the host organisation’s policies and major risk factors on site. An increasing number of companies have sought to address the issue by making OHS performance a part of the contract and contract renewal process with subcontractors. The effectiveness of this measure appears to be mixed and at the very least it will require careful monitoring. Establishing a regular core of subcontractors with a clear understanding of OHS, and regular OHS audits of subcontractors, are ways of reinforcing commitment to OHS. For example, one niche-building firm sends a safety officer to inspect all sites on a daily basis, has banned certain dangerous practices such as the laying of roof tiles before walls are erected, and also limits the number of subcontractors on a site at any given time. What should also be noted in relation this firm is that it had adopted only several basic rules but ones targeted at known sources of risk and that the high level of informal auditing negated the need for more elaborate safeguards and procedures. An example of a more comprehensive response can be given in the case of a construction company following the death of a rigger (working for a subcontractor), who had been using an unsecured safety-harness and had fallen to his death from the roof of a warehouse being built. In this case the company identified and took action in relation to a number of factors that contributed to the incident. This included a campaign highlighting the need for all workers to wear attached safety harnesses and the introduction of rigorous set of rules in relation to subcontracting. All subcontractors were required to sign an agreement to abide by all safety procedures; and the company’s: “safety officer and worker health and safety representatives were authorised to send non-complying contractors ‘off-site’” (Mayhew and Quinlan, 1997a). A small but growing number of companies, like BHP, have developed elaborate subcontractor control systems for operations within its steelworks (Mayhew and Quinlan, 1997a). Such systems need to address issues such as orientating contractors to the site, emergency procedures, and training requirements, as well as hazard prevention and control. The material needs to be in a form and language designed to clearly communicate to contractors. In addition to general information there will be a need to tailor measures to specific circumstances. Some of these issues will only become apparent in the context of direct discussions with contractors and recognition of the specific tasks they are to undertake. In some companies the on-site/principal contractor OHS manager will hold pre-contract discussions with the subcontractor; inspect their tools, clothing and equipment; conduct site inspections; examine the proposed work schedule from an OHS viewpoint; evaluate the subcontractor’s OHS expertise and programs; and attend contractor OHS meetings. At least as important as the establishment of a contractor control system is ensuring that this system is implemented and monitored effectively. For smaller companies, in particular, the 304 --
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monitoring and implementation processes may be far more important than formalised rules. For example, at Fennings Timber, a timber company based in Walcha NSW (with about 75 workers at its mill), a control system was established which initially focused on offsite cartage and cutting - the highest risk areas where contractors were used (Mayhew and Quinlan, 1997a). The company used two contractors for outsourced work, one with about 25 workers and the other with 7-8 workers. These workers were largely employees of the contractor, although there were some subcontractors. Fennings initially found that the main difficulty was that, as small companies, these operators only saw OHS in terms of extra time, effort and money. On the other hand, Fennings had an advantage in terms of a long-term relationship and knowledge of these contractors that enabled it to exert a sustained influence. Fennings insisted that both companies have an OHS management system, and Fennings staff monitored their performance and helped with induction. The monitoring took a number of forms. On a half yearly basis the HRM manager of Fennings audited the OHS of the two contractors visiting sites, conducting interviews with workers and then interviewing the principal of the contractor to discuss findings and suggest improvements. In addition to this, the HRM manager and another Fennings officer monitored operations on a daily basis. Furthermore, the implementation process included feedback from the contractors and their workers and this was used to modify the program further. Close contact in the rural community in which Fennings was based meant that it would have been difficult for a contractor to manipulate the program by trying to disguise, or fail to report, injuries. Over a period of three years Fennings formalised its contractor control system. Nevertheless, what is critical here is the emphasis placed on implementation and formal review processes rather than simply setting contract guidelines or workplace rules and then not following these up. The Fennings case also indicates how a set of control processes can be devised which are consistent with the nature and resources of the company. In Australia, and overseas, industry associations in particular industries (such as the Queensland Master Builders’ Association and the Minerals Council) have begun to explicitly address subcontracting in their OHS policies and materials. For example, the OHS Committee of the NSW Minerals Council prepared a guide for contractor OHSM that was adopted by the NSW Department of Mineral Resources as a MDG Guideline (MDG 5003 Guidelines for Contractor OH&S Management for NSW Mines). Other examples have been cited in this report where guides produced by industry associations on managing OHS in the context of particular work arrangements (including the fast food industry and labour hire) have been adopted by government agencies. In some cases at least, such as guides produced by the Minerals Council of NSW and Western Australia, make explicit reference to the risk factors associated with subcontracting arrangements, notably reward pressures for contractors to under-bid on tenders or cut corners on safety in order to complete more jobs in a given period. By recognising that the identification of risk factors is essential for the development of effective policies to manage contractors, these industry documents are in advance of most of those produced by regulatory agencies. Other industry association initiatives include the development of multi-employer or industrywide induction schemes or ‘passports’ for contract labour. An example of this was Markstar pioneered by the Western Australian mining industry, entailing a one or two day induction (depending on whether they were working underground) and the issuing a ticket that enabled the holder to move into an organisation without repeating the induction at each. The scheme was developed in recognition of the increasing use of contract labour, the costs of providing induction for such ‘fluid’ labour and concerns at a diminishing impact from repeated inductions. This scheme was regarded as partly successful but waned a little because a number of mine managers, concerned to meet their duty of care, continued to insist that 305 --
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anyone coming onto their site had to have an induction they were happy with not a ‘third party’ one. A drop in the quality of the induction provided by accredited trainers was also seen to contribute to this. Despite these concerns, the Minerals Council of NSW was considering adopting a similar system, for the same reasons it had been adopted in Western Australia and partly because members were unhappy with a mandatory alternative (see the previous chapter). As noted elsewhere in this report, for their part unions preferred the mandatory approach. Union representatives interviewed in Western Australia saw Markstar as being only the base of three levels of induction that needed to be augmented by specific site induction and a further level of induction for those working underground. In essence, there is some debate about the appropriate role for Markstar. The Western Australian union representative stated mining companies had improved induction practices in recent years although he still believed they were not sufficiently thorough in terms of awareness of legislative duties and that ensuing supervision could fail because output-based performance pay systems discouraged interruptions to work (such as stopping a truck for maintenance). In developing their own version of Markstar mine operators in NSW were also keen to persuade the Department of Mineral Resources that contractor management entailed far more than controls on induction but also other issues such as preselection and ongoing performance evaluation. Pre-selection involved elaborate pre-qualification procedures that entailed considerable documentation (regarding performance, the production of management safety plans etc), site visits to their existing jobs or discussions with managers that had engaged them in the past. The pre-qualification process essentially established a list of eligible contractors that might be seen as a formal and extreme version of the ‘preferred contractor’ model. Setting such requirements was also to have benefits in terms of discouraging less responsible contractors from even tendering for work and in terms of improving the level of legislative knowledge amongst contractors that were used. It was also noted that there was now contractor representation on the Minerals Council (and its equivalent in Western Australia). Representatives argued that the industry tended to set very high standards in relation to contractor performance and, as a result, had not encountered the problems of the order experienced by some other industries. For example, contractors were required to undergo the same training in risk assessment and mine supervisors subjected them to the same safety audits as were undertaken with direct mine employees. It was also noted that when a contractor failed these performance tests they could be removed more readily than would be the case with a direct employee of the mine. Significant rationalisation of the industry in recent years was also seen to make it more likely that a contractor who suffered this fate would have difficulty finding work at another mine. There is some evidence to support their contention that the mining industry sets higher standards for building contractors that flows on to those contractors other activities (cited in Mayhew and Quinlan, 1997). One distinguishing feature of the mining industry – at least in terms of the major coal and mineral producers - is the often extensive levels of OHS performance assessment and management (including elaborate auditing and reporting requirements), and designated accountability, which provides a basis for incorporating contractors into the process. In other words, where such controls do not exist a standard feature the development of them for contractors is a more challenging task. At the same time, contractors may still pose particular risks and the systems are far from infallible. For example, one problem identified in the area of incident reporting mentioned in employer interviews was with regard to those incidents where there was no injury but it could have resulted in a major incident. Union representatives from Western Australia argued the reliance on lost time injuries as a critical performance measure encouraged various forms of data manipulation at mine-sites (such as workers going 306 --
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in on crutches). This project could not explore these issues in detail. However, the manipulation of performance measures where contractors are involved has been identified as a potentially critical flaw in OHS management systems in other industries (see for example Collinson, 1999). With the increased use of contract/leased workers these areas may require additional attention. Returning to the issue of induction it should be noted that, as on-site induction requirements for contractors by individual employers have grown, a financial incentive for a more approach has emerged. In at least some industries like mining contractors doing specialised tasks for a range of mine operators would otherwise be faced with the time and expense of repeatedly undergoing induction at each mine-site. As with guidance material in several instances these passports have served as a model for government agencies. While unions have been critical of a number of industry contractor induction passport schemes others, such as the welders passport in Gladestone, have won their support. Further, in general unions have supported the principle of passports and have pressed to make them both mandatory and state administered. The level of mutual support for this tool is certainly a mark in its favour. In Britain and other countries industry associations have developed contractor passport induction/training schemes and in the former country at least the HSE has drafted guidance for such schemes as well as exploring ways of foster reciprocity between the various schemes (HSC, 2001: 15). The foregoing indicates that, in some areas at least, employer organisations have faster to respond to problems than regulatory agencies. In sum, there are a number of different measures employers can use to ensure outsourcing does not compromise OHS. The combination of measures used must be tailored to suit the size, industry and other characteristics of the particular firm or organisation. It is therefore impossible to specify the steps that need to be taken and the structures that need to be introduced in great detail. On the other hand, there are clearly a number of key factors that need to be kept in mind when devising a subcontractor management program, notably: 1. Assess all costs and benefits - employers considering the subcontracting out of labour should carefully calculate the full costs and benefits (including long-term hidden costs in relation to product and service quality effects, reliability/control, legal liability) of engaging subcontractors for each situation or process before embarking on or continuing with this option. Each case needs to be evaluated on its own merits. As far as can be judged from conversations with OHS managers this practice remains rare and OHS managers themselves often complain of having little or no involvement in the outsourcing decision. 2. Senior management commitment - it is impossible to conceive of an effective OHS regime, including one that addresses subcontracting, where senior management is not committed to this goal. Without such a commitment it is extremely unlikely that resources and time will be devoted to the issue, or that lower levels of management, let alone subcontractors, will treat OHS matters seriously. The “management systems” approach is recommended which is more than simply a concern with costs/profits and legal compliance and is based on the ethic of valuing people - which is backed by structures and actions. OHS cannot be treated as an afterthought, add-on, appendage or subsidiary factor but must be integrated into “normal” management functions that focus on processes of production, and not just incidents, known hazards, injury frequency ratios or workers’ compensation costs. It is critical that an OHS management system be able to accommodate changes, to recognise new hazards, identify risky work processes, and minimise them.
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3. Tender and contract requirements - employers of outsourced labour need to ensure that their tender and contract requirements entail explicit compliance with all OHS legal obligations and codes. Further, employers must monitor this compliance. Consistent with this, all subcontractors need to supply information on their OHS performance, safety equipment, work methods to be used, and policies prior to a contract being awarded. Multiple OHS performance indicators of both a quantitative and qualitative nature must be devised by the parent company, with an emphasis on processes and not simply incidents e.g. the number of workers trained in OHS, hazards reported and corrected etc. The contract should also include penalty provisions and should be renewed or extended conditional on proven OHS performance. Managers should also ensure that the contract terms do not provide an overwhelming incentive for subcontractors to engage in hazardous work practices, for example through excessive work intensification. One issue of concern repeatedly raised by employers, both public and private, was how to justify on competitive neutrality grounds accepting a bid for a tender that was not the lowest because they had confidence in the OHS of the higher priced bidder or concerns about the lower priced bidder. 4. OHS management policies - employers planning to hire subcontractors should incorporate specific recognition of outsourcing into their OHS management policies. Contractor safety manuals are the logical base to a safe system method. The bottom line in such a program is that management can ensure a safe system of work. Issues such as which party is to supply and maintain plant/machinery or personal protective equipment, and OHS induction and training requirements should be clarified. Managers, supervisors, employee representatives as well as subcontractors should all be fully apprised of their OHS responsibilities. The major contractor /employer must ensure that subcontractors and their employees have access to all relevant information as well as adequate training to meet the general and specific OHS problems they are likely to encounter. We suggest that managers monitor key OHS indicators of subcontractors, for example, days off from work, reduced capacity for physical tasks, various indicators on the intensity of labour, amount of spoiled materials, or reduced quality of output. 5. Subcontractor OHS management system. Another critical element in developing an effective contractor management system was the need to ensure subcontractors themselves have an OHS management system (dealing with induction/training, as well as identification/ recording, monitoring/ auditing and control of hazardous work processes) in place that will consistently operate as a subsystem of the overall OHS management system for the workplace. As noted by some interviewees (including regulators) the last aspect can be a problem when the subcontractors OHS system is deemed incompatible with the host’s system and modifications are required (though the development of industry models like ‘subbie-pack’ by collaborative ventures between regulators and industry or industry associations – see below – can mitigate this). Leaving the last issue to one side, elements of the subcontractor’s OHS program should include that subcontractors supply their OHS policy, nominate the person(s) responsible for safety, and give undertakings in relation to the monitoring and rectifying of hazards, or stopping work in the case of an imminent health and safety problem/ breach of legislation which cannot be immediately addressed. With smaller subcontractors, the major contractor will need to bring subcontractors directly within the auspices of its OHS program.
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6. Participation in decision-making - employers should ensure that subcontractors and their employees participate in decision-making on OHS that is relevant to their activities, such as participating in site OHS committees and in periodic reviews of overall OHS management. A range of different groups of workers has valuable insights into causes, consequences and remedial control methods. 7. Timetabling of production - employers should timetable production, service delivery, and work task schedules (all of which should be widely published) to avoid excessive staff on site at any given time, competing deadlines, or mutually exclusive tasks. 8. Preferred subcontractors - employers should develop a core of reliable, preferred and experienced subcontractors who fully understand their OHS tasks and responsibilities. 9. Methods of exerting control over subcontractor OHS - employers should develop methods of exerting control over subcontractor OHS behaviour, including implementing a secure work permit system, insisting on OHS induction requirements, and initiating a suitable system of discipline (from “please explain” to contract termination); all of which should be monitored through regular site inspections and other devices. 10. Industry associations - finally, employers should lobby their Industry Associations to incorporate information on the OHS implications of subcontracting in their draft policies, short courses and information materials which are supplied to members, and to liaise with both government agencies and unions on measures and campaigns to address OHS problems arising from, and associated with, subcontracting. 8.2.1 Voluntary Agreements, Standards and Codes In a number of industries groups of companies or industries associations have sought to implement measures that would minimise the risks posed by subcontracting (some with government support have been discussed in chapter 7). In the mining industry for example the Minerals Council of Western Australia and others have sponsored the development of a minimum/standard induction package Markstar discussed elsewhere in this chapter. In other industries voluntary accreditation schemes have been developed that have tried to encompass either all operators (including subcontractors) or are specific to subcontractors. An example of the former is the TruckSafe scheme operated by the Australian Trucking Association in the long haul trucking industry that seeks to set minimum standards in relation to the management of maintenance and fatigue (there are a number of other proprietary and public domain schemes in this industry including TransCare which the Victorian Road Transport Association developed with the sponsorship of WorkCover Victoria). While these measures have value in lifting the standards of some operators evidence given to the recent trucking inquiry (Quinlan, 2001) found that the largest and best-known scheme, had enrolled only 350 members, mainly medium to large operators (out of thousands of operators) in a decade. It thereby failed to secure either a persuasive level of membership or to enrol more than a handful of small firms/subcontractors (relative to their numbers). There was also some criticism of the effectiveness of auditing and this appears to be a recurring problem with voluntary schemes. In the road transport industry, major clients have also introduced codes of conduct incorporating OHS and minimum labour standards on a voluntary basis or following 309 --
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approaches from the Transport Workers Union. As in clothing and other industries there are questions as to auditing/enforcement. Individual companies that make substantial use of road transport like BHP have also developed their own protocols designed to manage driver fatigue. The trucking industry inquiry was impressed with some of these initiatives but they are as yet too rare to have a significant effect on the industry (Quinlan, 2001). 8.3 Home-based Work, Telework and Telecall Centres The management of a number of private and public sector organisations (invariably large) interviewed in the course of this project have developed formal or informal procedures to govern the working from home (usually this was part-time or for a specified period). The situation with regard to full-time home-based workers or those employed by small firms working partially from home (in areas like real estate) the situation is unknown. However, if the situation is in any way similar to those areas that we are familiar with from previous research (such as home-based garment makers) then it is likely that for most there has been no risk assessment and no OHS protocols have been established. Where workers are sent into homes, such as homecare workers, where there is a risk of assault, some employers have recognized the need to strengthen existing protocols as well as look at new safety devices. For example, homecare workers could be issued with beeper alarms (like their hospital counterparts) fitted with global positioning. A mobile phone would be hard to use in such situations and the cost of this safety device would be more than offset when compared to the expense (let alone human cost) of incidents described earlier in this report. As noted in the last chapter, the provision of homecare services by labour hire firms can be especially problematic although some firms have recognised this and, beyond training their personnel, have sought to establish contracts with individual families. These contracts identify acceptable arrangements and behaviour protocols for patients and other family members (regarding violence, sexual harassment and the like) with escalating remedies for breaches (eg ‘three strikes and you’re out’). The effectiveness of these measures is unknown although one regulator expressed the view that the companies she was familiar with found the approach was valuable both in raising the issues of acceptable behaviour to the families and where supported by adequate monitoring of performance. Qualitative research undertaken for the Australian Industry Group found that while telecall centre workers perceived benefits in the flexibility of working time arrangements major drawbacks reported included the stress of abusive calls from customers, the regimented nature of tasks/close performance monitoring, and the lack of training and accreditation (ANOP, 2001: 26-27). In essence, these findings mirrored those of government reports and research on telecall centre work discussed elsewhere in this report. 8.3.1 Voluntary Agreements, Standards and Codes One area where voluntary codes have been developed to deal with OHS and other problems associated with home-based work has been in the clothing industry. In the past two decades, there has been a ongoing media exposure of scandals involving the gross exploitation of home-based garment makers referred to as clothing outworkers. This cumulative exposure stimulated the involvement of community groups, including ethnic and women’s organisations as well as churches, in campaigns to reduce the level of underpayment, long hours, occupational violence and unregulated working conditions (including child labour) experienced by home-based workers. These groups, together with the union (TCFU), sought 310 --
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to bring consumer and political pressure to bear on the retailers and manufacturers of clothing. Initially, some individual firms signed deeds of cooperation with the TCFU requiring the firms concerned to assist in the enforcement of minimum industrial and OHS standards by providing the union with information about suppliers (so the union could track the flow of work through different layers of subcontracting). However, signatories to this approach remained exceptional despite adverse publicity (including community pickets) of some firms known to benefit from exploitative subcontracting arrangements. The limited number of signatories provided the impetus for an industry-wide approach. The TCFU developed a Homeworkers’ Code of Practice in conjunction with the peak organisations of manufacturers and retailers that sought to give effect to the minimum standards prescribed in the landmark 1987 federal clothing award decision. This code created a framework of accreditation and monitoring that would secure compliance with industrial and OHS obligations. It should be noted in passing that a NOHSC sponsored study of clothing outworkers found that low piecework payments (that, in turn, induced long hours of work) were the primary explanation of a significantly higher number of injuries, including chronic injuries, amongst home-based workers (when compared to factory-based clothing workers. Mayhew and Quinlan, 1998 and 1999). A more recent study of outworkers in Melbourne by Cregan (2001) has confirmed low pay, finding outworkers were paid on piecework that converted to an average hourly rate of $3.60 or less than a third of the minimum award rate. Cregan also found that most outworkers had experienced delays in payment and over 40% had been denied payment altogether on at least one occasion. Further, Cregan's study confirmed the pattern of long working hours and the use of children to assist in production. In short, there is a nexus between low wages, long hours and OHS (as well as other externalities) that require the multi-agency/multi-regulatory regime envisaged in the Code. The Homeworkers’ Code of Practice suffers from three major deficiencies. First, it makes no explicit reference to effective enforcement of OHS obligations. By contrast, the previously mentioned (Chapter 7) the NSW Government Code of Practice on Employment and Outwork Obligations (for textile, clothing and footwear suppliers) explicitly requires suppliers of TCF products to conform to OHS and workers’ compensation legal obligations. Second, the Homeworkers Code provisions relating to clothing retailers in no way assist any enforcement authorities to effectively track the flow of work through successive layers of contracting parties – the essential pre-requisite for effective enforcement of OHS obligations. This failure has been remedied in other individual agreements with some retailers, such as the Target Deed of Cooperation, that oblige the retailer concerned to directly and regularly inform the relevant enforcement authority (the TCFU) about exactly which supplier of clothing are supplying precisely what number (and type) of goods (at which price) to that retailer. Third, the Homeworkers Code is by definition a voluntary instrument. Therefore, those commercial parties who would financially benefit from a refusal to adhere to this code can simply ignore it by refusing to sign. This particular deficiency undermines the commercial competitive position of those firms who abide by the code. This limitation has been identified in relation to voluntary codes in other industries like road transport. The NSW government is not unaware of the limitations of voluntary codes. The tripartite Ethical Clothing Trades Council established by the NSW government has the task of recommending to the Minister for Industrial Relations whether the existing codes of conduct (both individual company deeds and the industry-wide code) should be superseded by the implementation of a mandatory code that imposes binding legal obligations upon retailers of clothing products. This recommendation will be made by February 2003. 311 --
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Overseas experience also indicates some form of mandatory code and vigorous enforcement will be essential. Very similar issues (to those described elsewhere in this report) have been identified in the apparel industry in the USA (though here the subcontracting chains appear to devolve to small sweatshops rather than home-based work). In several states, most notably California, there has been a tortuous path of attempting to achieve regulatory controls against entrenched opposition culminating in the passage of the Sweatshop Accountability Bill in 2000 (AB 633) that established joint-liability for manufacturers and contractors. However, as Quan (2001: 7-8) has observed retailers have effectively blocked implementation of the regulations: …to date the regulations that guide the implementation of the bill have not been adopted. The California Labor Commissioner has requested that the interested parties recommend language. Representatives of the parties had agreed to language for the implementing regulations on February 1, 2000, but the retailers reneged on the agreement and used political connections to stall the process. The retailers had become involved in the negotiations over joint liability because during the past decade they have become increasingly core to the integrated process of production. In some cases there are sometimes manufacturers, when they design and merchandise their retail store’s “private labels”, such as Arizona (JC Penney) and Jennifer Moore (Macy’s). In other cases, the retailers actually manufacture because they sell only their own designed and manufactured products, such as the GAP, and Eddie Bauer. In the discussions over implementing regulations, the main objective of the retailers has been to insist on language that would exempt them from coverage of AB 633. However, worker advocates and other industrial experts agree that retailers are so integral to production that when they perform activities as manufacturers they should be defined as manufacturers.
The California experience highlights how one group can stymie a process even where there is a large body of agreement amongst the parties. In this case collaboration was restricted to the terms for implementing a mandatory regulation. Where a standard is entirely dependent on voluntarism its vulnerability to disruption by even a small group is even greater. Voluntary codes have been used more broadly in the retailing industry in some countries to apply to a range of goods and services produced by different categories of contingent workers including those, especially immigrants working in sweatshops or on a temporary basis, including some groups of harvest workers in the country concerned as well as workers in developing countries. Again, independent assessment of these codes established by individual companies or groups has tended to indicate that they lack independent auditing and effective enforcement mechanisms (and can be evaded by further subletting of work (see for example, United States Bureau of International Labor Affairs, 1996). Since this report some retailers now employ vetting agents but this remains exceptional and their effectiveness in unknown. With regard to telecall centres, an industry body - the Australian Call Centre Association based in Sydney – have a developed an OHS management document for call centres. Given logistical constraints we were unable to analyse this document. 8.4 Labour Hire/Labour Leasing
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With regard to labour hire it is necessary to look at initiatives both on the part of host employers and the labour hire agencies themselves as well as instances of collaboration between host employers and agencies. With regard to host employers, many of the same problematic issues discussed in relation to subcontracting appear to apply to leased and temporary workers. In their review of safety in the US petrochemical industry Kochan et al (1994:71) found that one of more positive outcomes was achieved by a company that, ignoring the advice of its lawyers, managed its (leased) contract workforce in the same way as those that were directly hired. In the subsection on subcontracting it was noted that one of the most practical and effective means of securing some control over safety was the use of preferred subcontractors who could or had demonstrated a commitment to OHS. In similar vein, the possibility of adopting a similar approach in relation to labour hire agencies was raised by a number of employers interviewed in the course of this project although the only industry where employers have pursued this option to a significant degree appears to be mining. At various points in the research both employers who used labour leasing and some regulators expressed the view that labour hire was more problematic than directly hired temporary workers. However, it was acknowledged that practices could vary between industries and firms. For example, one agency representative made reference to the hotel sector of the hospitality industry where she noted that labour hire firms insisted on a level of training before these workers (including chefs, waiters, bar staff and kitchen hands) could be leased to a host employer. It was noted that one labour hire firm developed a ‘virtual kitchen’ to facilitate this training and better accommodate peak periods of demand. Closer networking between labour hire firms and their clients (in some ways analogous to the ‘preferred subcontractor’ technique in relation to managing outsourcing) or more specialisation on the part of labour hire firms could facilitate this outcome. As noted in the last subsection, some labour hire firms involved in homecare services have sought to better control risks by establishing contractual arrangements with the families of clients. Government agencies were asked whether they were aware of labour hire firms that performed well in terms of induction, training, prior-entry risk assessment and providing reasonably skilled workers to their clients, and thereby could serve as a ‘best practice’ model. A number of agencies, if not most, indicated that they were aware of such firms, with one officer observing: We’ve got some labour hire agencies, probably from medium-sized to large, who will not provide staff on short notice. So the host employer calls them and says “I want a worker to do certain things and I want them here at six o’clock tomorrow morning.” In many cases if they don’t already have a relationship with the host employer they will decline the opportunity to provide labour. So we’re starting to develop a culture at least amongst the large organisations that if you haven’t seen the workplace and you’ve got no idea of what risks you’re exposing your employee to then for god sake don’t send them out there. The second things is that we got a number of agencies that are not supplying labour to their clients without them first having undertaken an induction in their own organisation. Now the labour hire agency receives an offer of employment from somebody on their database. That person will have already been through their generic organisation induction so they’ll have gone through the pay rules and how everything operates but also there’s an OHS element in there as well. This is how our safety system operates and in the event of any issues these are the steps you
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have to follow. So they give them a very rudimentary introduction into risk assessment.
However, even with regard to these firms there were still problems, as the officer went on to point out: The difficulty in all of that is what happens when they’re in the host employer. Does the host employer give them an equally adequate induction and introduce them to the way the safety system operates? Now that’s we’re we seem to find the system breaks down.
Apart from generic developments on labour hire mentioned elsewhere in this report in a number of industries, collaborative industry and government agency research into achieving better OHS outcomes has addressed labour hire. For example, a South Australia report on OHS culture in the meat processing industry (Correll and Andrewartha, 2001: 4) recommended (amongst other things) a change in recruitment and selection practices that would include labour hire personnel: …as use of labour hire to “shift the risk” leaves the host employer still with both WorkCover and common law responsibilities.
The peak body for the recruitment industry in Australia, the Recruitment and Consulting Services Association (RCSA), has worked in collaboration with the OHS agencies in New South Wales, Victoria and Western Australia, on booklets aimed at improving labour hire companies’ awareness of their OHS responsibilities (Work Words, March 2000, 12). One initiative was the production of a booklet, Health and Safety Induction Programs. These publications have been criticised by the Australian Council of Trade Unions (ACTU) for understating the labour hire agencies legal obligations to workers under the OHS statutes (see below), for focusing on the responsibilities of the worker and the host employer, rather than the labour hire agency, and for not mentioning unions, OHS representatives, consultative processes to improve OHS measures, or participation by workers in host employer OHS management systems (ACTU, 2000). The ACTU has itself produced a guidance note for Unions entitled OHS & Labour Hire (ACTU, 2000a). Leaving the ACTU criticism to one side, the RCSA is undoubtedly influential, with around 1000 members nationally (and 320 in NSW) that claim to account for majority of labour hire activity. Hence, its attempts to develop policies and engage with government agencies on OHS are important. At the same time, like many other employer organisations but has a limited reach in relation to smaller operators of which there are vast number (including ‘one person’ operations). The precise number is unknown even in states with licensing requirements because these include purely employment agencies. Nonetheless, it can be noted that RCSA membership covers a minority of operators and it is probably those who are not members that could benefit most from the standards and practices it is trying to develop. Another difficulty here is the high level of business turnover, especially during business downturns. One industry spokesperson noted the susceptibility of the industry to any change in demand and claimed that 40% of operators had ‘disappeared’ in the 1991 recession. Such a high level of turnover presents a considerable challenge to developing voluntary policies or codes. Like unions (see chapter 9) the labour hire industry has lobbied government and their OHS agencies as well as making submissions to the NSW Labour Hire Industry Inquiry. In its 314 --
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submission to the latter, Manpower (the second largest labour hire firm in NSW), stressed its adherence to all legislative standards (employment, EEO, OHS, taxation, superannuation etc) as well as highlighting the role of its dedicated OHS unit in terms of prevention, injury management and rehabilitation. It is worth noting that most, if not all, large labour hire firms have such units and evidence relating to a number collected prior to this project indicates they have made genuine efforts to improve their OHS performance. Some smaller (generally specialist) labour hire firms have undertaken similar steps but the extent to which this is representative of the industry as whole is unknown. A survey of 1000 UK agencies undertaken for the HSE (HSE Press Release 18 September 2000) found a generally poor level of awareness of OHS legislation, with about half the agencies surveyed having no measures in place to fulfil their regulatory obligations. There is, it seems, no comparable research on NSW or Australia. Some employer organisations have also facilitated the development of programs for the labour hire industry. As noted in the previous chapter Business South Australia developed an OHS short course for the labour hire industry in conjunction with the WorkCover Corporation of South Australia. As noted elsewhere in this report, there can be significant logistical difficulties in supplying a wide array of workers to an equally diverse array of employers (in terms of industry and geographic location) and the industry has lobbied to diminish legal responsibilities that it sees to both too onerous and impractical. An alternative solution would be for labour hire firms to revert to more specialised fields of activity, becoming niche suppliers to those areas where they believe they can manage the risks. Industry representatives spoken to acknowledged there could be advantages in such specialisation although current workers’ compensation arrangements in NSW were not seen to add to these incentives. Another way of better controlling risks, implicit in some examples of better practice cited above, was to adopt the ‘preferred subcontractor’ model whereby labour leasing firms sought to build a long-term relationship with clients and one where commitment to OHS on both sides was seen to be critical to renewed engagements. Some labour hire firms have made efforts in this regard although the competitive nature of the industry is seen as a major impediment to this. The move to by large organisations to adopt centralised purchasing was also seen to inhibit this process because it made price the primordial determinant of who was awarded contract. Referring to the nature of this system and those (accountants or financetrained purchasing officers) who administered it, one labour hire firm manager observed: …centralised purchasing has a basic fault in that ‘they are what they are’, and therefore the first thing they look at is price, the second thing they look at is price and the third thing they look is price. They tend to disregard some of these what they say is periphery ‘fluffy things’. They’re not worried about OHS…What we do find is that a sophisticated user of our services will understand and will look at our occupational health and safety processes - our induction processes and out history and they will use that as part of the evaluation criteria. But the sophisticated users – it’s the old 80/20 rule – is only 20% of the market. The other 80% are unsophisticated users and unsophisticated users don’t care.
On the other hand, in a few industries more selective use of both labour hire and contractors along the lines of the ‘preferred subcontractor’ model appears to have occurred. In the mining industry, employer representatives indicated that they didn’t use ‘generic’ labour hire firms (especially for more specialised tasks or those requiring underground work) but tended to use 315 --
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firms (including regional firms) specialising in meeting the needs of the industry. They also indicated that leased workers were put through an identical induction process to their own employees and were subject to the same supervisory arrangements. The more stringent requirements (at least in the prescriptive sense) of mine safety legislation (compared to general OHS laws) as well as the demands mining companies own OHSM systems probably help to explain this as well as the incentive to use specialist providers due to higher induction/training costs (that would apply to providers too). An additional control identified was the use of staged entry or probationary employment whereby leased workers used to drive trucks could be hired into the mining crew structure when positions became available and subject to satisfactory performance. Logistical constraints did not permit a thorough assessment of this approach and the use of labour hire workers as probationary employees is unlikely to be welcomed by unions. The extent to which such an approach, if effective, is generalisable to other industries is a moot point. Nonetheless, the development of a more networked and specialised approach to labour leasing in order to better manage OHS seems worthy of exploration. At the same time, it was noted that when originally devised, contractor controls promoted by the Minerals Council had focused on the performance of intermittent or non-production tasks, notably maintenance. However, a review revealed that the introduction of contract and leased workers to undertake a wider array of tasks including operational activities, including working alongside mine employees, necessitated a reconfiguration of contractor management strategies to take account of this. Another issue identified that mining industry representatives indicated they were seeking to address was in relation to the participation of contract and leased workers in site safety committees and other participatory mechanisms. As one OHS manager observed: We haven’t traditionally but I know that our plan for each of the three safety committees next year is to ensure that we do have contractor or labour hire or whatever we choose to call them involved, particularly for those people who spend a fair period of time with us.
Another manager stated: Contractors were saying to us ‘we come and go very regularly but we miss things that happen in the intervening period such as safety alerts or toolbox talks. They (the alerts and talks) were still relevant and current at that time but for some reason they missed it. So its an issue of how you keep the constant information flow.
This was one the few industries where employer representatives that were interviewed indicated such measures were in train (note the discussion of this issue in the previous chapter). 8.5 Casual, Temporary and Itinerant Workers In general, the risks posed to temporary workers have received far less recognition from employers than those associated with subcontracting and labour hire. As already noted, government agencies have given little recognition to this issue, either in terms of the production of guidance material/information strategies or prosecutions. As with government agencies, some industry associations have produced guidance material for young workers that arguably has some benefits to temporary workers given the high proportion of young workers holding casual jobs. For example, the Queensland Chamber of Commerce and Industry produced a booklet Safety at Work: A Guide for Young Workers in Hospitality and this 316 --
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booklet was subsequently adopted by the NSW Consumer Services Industry Reference Group (WorkCover News February-April 2001 44:5). A number of organisations providing OHS information to management/employers, such as CCH Australia, have also devoted increasing attention to the subject in their magazines, newsletters, on-line services and other products (see for example Kennedy, 2002: 25-27). For example OHS Alert has run a series of features on temporary and young workers, highlighting problems of inadequate induction and training, inexperience, poor work organisation and communication and recommending ways of addressing this. Other OHS information services, such Occupational Health News have also drawn attention to the issue. The practices of some employers also provide a model. Pervasive controls over the work process/task allocation and extensive training may be especially valuable in connection to young casual workers in high labour turnover settings such as fast food and retailing. In one multinational company a survey of 300 young casual workers (across three states) was undertaken following a serious (indeed fatal) incident at one their stores. The survey (NOHSC, 2000) found, that contrary to expectations, these young and relatively inexperienced workers had a good knowledge of hazards and appropriate risk control measures as well as key aspects of OHS legislation and this could be attributed to the close integration of OHS management into closely controlled production processes/tasks supported by extensive use of training. The system was pervasive, being rigorously enforced in all stores (whether franchised or company owned). The survey also identified several problem areas, notably with regard to the management of occupational violence (especially robberies) and the low level of knowledge in relation to workers’ compensation entitlements. Nonetheless, this company did provide a model of how OHS problems of inexperienced and temporary workforce could be addressed (NOHSC 2000 and Mayhew and Quinlan, 2002). Unfortunately, even large fast food companies these practices appear to be the exception rather than the rule and, indeed, for some employers a temporary and volatile workforce is viewed as making the provision of full induction and training too expensive. Overall, in most countries with which are familiar management appears to have been slow in responding to the special risks associated with contingent work and these responses often focus on awareness raising or the imposition of rules – neither of which arguably goes more than small way to addressing the underlying risks. 8.6 Part-time work and Mulitple Jobholding Like regulators, employer representatives spoken to did not see part-time work as constituting a particular problem. A number saw multiple jobholding as an issue in particular industries although knowledge of the practice was limited. 8.7 Downsizing/restructuring and job insecurity There is a growing awareness amongst management that providing social support and keeping workers fully informed can mitigate some of the adverse effects of restructuring. However, the balance of opinion from the admittedly limited number of employer interviews conducted for this project essentially supported the view of regulators that comprehensive planning to anticipate and manage OHS effects, including the use of social support processes, was the exception rather than the rule. While no employer association interviewed has addressed this area directly. However, several suggested that raising the awareness of employers (presumably by government OHS agencies amongst others) would be valuable in this regard 317 --
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A mining industry representative emphasised the need to keep safety at the forefront to counter the problems posed by confusion and uncertainty (including staff responses of focusing on production due to their fear of job loss), and to fully integrate OHS into the reorganisation process. Another OHS manager in mining referred to his direct involvement in a business process reorganisation where he had the role of advising of the implications of changes to tasks, work procedures etc prior to its introduction and he believed this had meant the exercise had actually been of benefit in terms of safety outcomes. At the same time, others indicated there were (as in other industries) many occasions where this evaluation and management process didn’t happen. Another manager said that in his experience there was a clear connection between such restructuring and an increase in workers’ compensation claims because the uncertainty caused people to lose their focus on OHS. Where companies were suffering financial difficulties the departure of key management was seen to cause both disruption and the loss of ‘corporate’ memory. In short, there was a diversity of views as to how well such changes were being managed. 8.8 Small Business A number of employer associations have produced OHS guides for small business (see for example, ACCI, 1999). Documentation such as the ACCI’s Small Business Safety Solutions appears well designed, being relatively short but with clear step-by-step process on how to identify, assess and manage risks (using case illustrations) as well as meeting reporting and other regulatory requirements. As with many other guides produced by government, employers and unions the major focus of such material is on managing safety and comparatively little is to be found on how to address health risks. 8.9 Voluntary and Other Special Category Workers As noted in chapter 8 some employer representatives spoken to in the course of this project raised concerns (like regulators) in relation the OHSM of group training providers. At the same time it was noted that there were cases where induction and other matters were well addressed due to the close relationships established between training officers and host employers. This was essentially an informal process. If, as it appears, group training is a problem area it would be worth examining these informal networks to see whether any remedial measures could utilise or build off this. 8.10 Conclusion Overall, proactive measures by individual employers and employer associations to address problems posed by altered work arrangements appears patchy. In some instances employer organisations have been faster to respond to the challenges of using contract labour in terms of producing guidance material and promoting induction ‘passports’ than regulatory agencies. In the course of interviews, regulators who identified ‘best practice’ with regard to the OHS management of subcontractors repeatedly emphasised that it was the attitude of the principal contractor that appeared to be the critical factor in securing this outcome. In several industries, employer or industry associations have collaborated with government agencies on developing more innovative remedies. The most apparent example has been addressing subcontracting/small operators in the building and construction industry and the efforts of IRGs and their equivalents discussed in the previous chapter. One state-wide employer 318 --
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organisation (not NSW) indicated it would like to take a more proactive approach on a range of OHS issues but its ability to do this was inhibited by extent and quality of official OHS data, which meant it couldn’t ‘drill down’ into the statistics to get more meaningful information on particular problems. In other areas employers and employer associations are less certain there is a problem that needs addressing or, if there is a problem, how they should proceed. Several referred to the absence of information that would assist in crystallising the debate and enable informed decision-making on areas like home-based work, temporary work and telework. In this regard, a number - both within NSW and other jurisdictions - expressed keen interest in this project because they hoped it would shed more light on any problems and where attention might be best focused.
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Chapter 9 Union sponsored and Community Group Initiatives 9.1 Introduction In recent years the potential OHS risks associated with changing employment relationships has received a growing level of attention from the Australian union movement. The OHS committee of the Australian Council of Trade Unions has established an OHS and Labour Market Change Working Party which meets on a regular basis to discuss these issues, collate information from Australia and overseas, and formulate policy. In recent years it has pressed NOHSC to make the implications of labour market change a national priority for both action (Mansfield, 2002) and research (although in 1996/1997 ACTU representatives on NOHSC were party to overturning research priorities nominated by the then NOHSC Research Standing Committee that included this very issue). The ACTU has also undertaken or commissioned a number of surveys relevant to the issue of contingent work/job insecurity, such as study of employment security and working hours (Yann, Campbell, Hoare Wheeler, 1999). The latter study found that workers reported an increase in working hours (including unpaid overtime) and more stressful, family unfriendly and hazardous working conditions in conjunction with an expanded use of casuals/temporary workers and contractors. The ACTU subsequently launched a test case on reasonable working hours before a Full Bench of the AIRC but this claim largely ignored employment status/contingent work arrangements, as did the final decision of the Bench. In its judgement of 23 July 2002 the AIRC Full Bench rejected the ACTU’s claim for a set of all-embracing prescriptive standards in favour of award specific provisions, including the right to refuse unreasonable requests for overtime on specified grounds that included OHS and family disruption. How effectively accessible such provisions would be, when implemented, to vulnerable groups like casual workers, was not raised in the decision. In May 2002 the ACTU announced that developing a preventative program targeting labour hire, contracting out and call centres was one its eight priority OHS for 2002-3 (CCH Latest OHS Headlines 24 May 2002). Union initiatives in relation to the OHS problems posed by changing employment relationships can take a number of forms. This includes lobbying and agreements with governments, collaborative ventures with industry associations or individual employers, and negotiating/advocating protective measures with employers. In NSW unions can also initiate prosecutions under the OHS Act 2000. Lobbying may take the form of oral/written submissions to legislative inquiries or reviews, pressure to initiate inquiries or legislative reforms, and more tacit efforts to exert influence. With regard to the first form a recent example was in relation to the 1997-98 NSW Legislative Council Standing Committee on Law and Justice Inquiry into Workplace Safety where a number of unions, such as the TCFU, made submissions that argued, amongst other things, that the growth of contingent work was having adverse effects on OHS. While the final report included a chapter on this issue the Standing Committee made no formal recommendations for amendments to the OHS Act or related policy changes. The TWU made submissions to the inquiry into safety in the long haul trucking industry (funded by the Motor Accidents 320 --
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Authority of NSW) that specifically addressed the impact of subcontracting and commercial pressures (Quinlan, 2001). Individual unions have continued to raise these issues in other inquiries, reviews and working parties. In its submission to the review of the NSW Mines Inspection Act 1901 the Australian Workers’ Union (AWU 2001) argued for retention of the Act as a separate piece of legislation. At the same time, the union called for the introduction of general duty provisions covering contractors without diminishing the responsibility of the principal mine operator. The AWU endorsed the establishment of an OHS competency passport that would include contractors and argued that any relaxation of the statutory prohibition of younger workers would be accompanied by stringent training and supervisory requirements (including contractors). In a similar vein, the Mining Division of the CFMEU has argued that the current review (2002) of the Coal Mines Regulation Act is an appropriate venue to introduce a clear and unambiguous set of duties in relation to controlling the activities of contractors in coalmines. The Union was critical of existing guidelines (MDG 5003 Guidelines for Contractor OH&S Management for NSW Mines adopted by the Department of Mineral Resources from an industry model in 1998. See Chapter 8), arguing that its lack of monitoring and enforcement mechanisms meant it had failed to ensure appropriate measures were adopted. Individual unions (and the Labor Council of NSW and ACTU) also played a part in the NSW Government’s decision to establish a task force to inquire into the labour hire industry and again they brought OHS issues before that task force (the findings of which are referred to elsewhere in this report). In its submission, a key recommendation of the ACTU (2000: 19) was the removal of the geographic limitation imposed under the general duty provisions of OHS statutes such as the NSW OHS Act (see discussion elsewhere in this report and Johnstone, 1999) and replace existing guidance material on labour hire adopted from the RCSA. The Labor Council of NSW has since called on the government to implement the recommendations flowing from this inquiry and to establish OHS standards for call centres doing government business. In particular it endorsed the recommendation pertaining to the licensing of all labour hire firms. In this, as in a number of other areas, unions have called for new forms of regulatory control (or a reversion to old forms such as workplace registration) but have complained that current neo-liberal policy orthodoxies have become an a priori set of blocks to such proposals. For example, referring to their calls for licensing labour hire firms Labor Council secretary John Robertson (Workers Online Issue 139, 2002) stated: Labor Council has argued licensing is required to ensure core standards to make sure the tone isn’t set by the lowest common denominator. Every time this issue is raised the bureaucrats run the argument that it would breach competition principles. Frankly, if competition policy means ensuring the right to continue exploiting people, then we should be changing competition principles.
Essentially similar views were expressed by a number of union representatives interviewed in the course of this project. Union representatives from all jurisdictions (where interviews were undertaken) expressed a degree of frustration with the apparent inability of policy makers and regulators to comprehend or address the relationship between different types of work arrangement and OHS. In some jurisdictions this view was expressed in more strident terms than others. 321 --
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As with employers, not all union input is formal or publicised. An example referred to by the Queensland Division of Workplace Health and Safety was in relation to the certification of welders. Queensland was the last state to remove this certification, but following concerns raised by unions about the risks arising from subcontract-welders being unfamiliar with local conditions, agreement was reached in relation to an minimum level of induction required by all welders across the state (a welder’s passport system administered by TAFE colleges). As has been noted elsewhere in the report, employers too have favoured the use of passports in a number of areas relating to contractors. In a number of jurisdictions unions and employers are able to apply for grants to undertake developmental work in relation to practical OHS problems. A number of unions have used this option to try and develop programs on categories of contingent work. For example, in August 2001 the Australian Manufacturing Workers’ Union (AMWU) applied for a grant from WorkSafe Victoria to develop ‘best practice’ OHSM for labour hire and host companies in manufacturing. Australian unions are not alone in their efforts to try and induce government and its agencies to devote more attention and resources to the OHS problems posed by some flexible work arrangements. In Norway, for example, a coalition of unions held a conference in Oslo in March 2002 to highlight these concerns (more than 400 delegates attended) to the media and representatives of the various political parties. In Finland trade unions have argued that there is a clear connection between increases in mental illness and the growing insecurity and demands of work. A number of union bodies within the European Union such as the British Trades Union Congress (TUC, 2002a) have welcomed the European Commission’s recognition of the OHS problems posed by flexible work arrangements (see introduction to this report) but criticised the absence of a clear link between this and the strategy then proposed. The ability of unions in NSW to launch prosecutions under OHS legislation (independent of WorkCover NSW) has been used selectively (hardly surprising given the logistical demands it places on unions exploiting the option). Nevertheless, there is reason to believe that this option may assume more importance in connection to changed employment arrangements than other areas. Indeed, several of the small number of cases that have been taken can be construed as falling within this domain. For example, in 1996 the NSW Nurses Union successfully prosecuted an area health service for failing to provide a safe system of work when a nurse with a disabling back injury (known to the employer) was assigned a role that, despite some modifications, still left her to confront emergencies without assistance (Moatt v Mid Western Health Service, NSW Chief Magistrates Court, Matter No. 95/137, Reasons for Decision, 19 December). In this case no injury had occurred but the union was concerned to ‘send a message’ following the health service’s failure to adequately address the issue when it was raised. More recently, the Maritime Union of Australia has initiated a prosecution against the Patrick stevedoring company (again under the general duty provisions of the NSW OHS Act 2000), arguing that the reorganisation and new work arrangements at the centre of a bitter industrial dispute in 1997 has resulted in an increase in musculoskeletal injuries amongst wharf workers (or longshoremen in US parlance). The outcome of this case is as yet undecided. In addition to initiatives under OHS legislation unions have also had the capacity to address these issues through the conventional industrial relations arena of negotiation/industrial action, awards and agreements as well as campaigns directed at their own members, 322 --
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governments and employers. As noted in Part 1, recent changes in industrial relations climate and regulation have, if anything, made this option more difficult to utilize (though less so in NSW). Further, there is a crossover with OHS legislation in relation to union membership levels given the critical logistical support role that unions play in relation to participative mechanisms under OHS Acts (in terms of training and other support for HSRs, providing information to worker-members of OHS committees, representation on tripartite standard setting bodies and the like). Indeed, as noted in Part 1 of this report the Robens model of participative OHS legislative was predicated on levels of union density that no longer exist. In this context it is worth noting that the decline in union density is one of the critical issues being considered as part of the review of the Workplace Health and Safety Act 1995 in Queensland. It will worth watching what if any recommendations are made in relation to this issue. Having said all this, unions have shown an increased willingness to raise OHS in the context of changes to working arrangements in both public campaign and negotiations with employers and before industrial tribunals (see for example the NSW IRC inquiry into the introduction of engineered standards into grocery warehousing). Health, safety and family/work balance issues have also be raised as part of a growing debate over changes to working time arrangements manifested both in individual enterprise negotiations as well as the recent ACTU test case on reasonable hours. In some jurisdictions at least (like NSW) industrial relations tribunals themselves are demonstrating some willingness to consider these issues although a number of unions express frustration that repeated attempts to include OHS issues had been rebuffed (see for example Printed and Kindred Industries Union and Hannanprint Victoria, 1995). Further, in the majority of cases where OHS issues are heard little recognition has been given to the implications of contingent work arrangements. The ACTU has developed a number of public campaigns on specific OHS issues, including stress that have at least touched on work arrangements (such as downsizing). Individual unions covering industries where contingent work is pervasive, such as the Media Entertainment and Arts Alliance, have also developed broad-based campaigns on OHS designed to educate their own members (and encourage them to speak out), raise the profile of particular issues with government and employers. In order to co-ordinate the collection of information and activity a number of multi-union bodies have been formed. Most notable here is the establishment of a OHS and Labour Market Change Working Party under the auspices of the OHS Committee of the ACTU. A significant OHS component can also be found in joint union committees formed to deal with areas like telecall centres and labour hire. Further, unions have taken action in conjunction with, or have supported, community group activity in relation to the OHS risks experienced by particularly vulnerable groups of workers. The most obvious examples are groups campaigning for greater safeguards in relation to the safety children (at work) or young workers, often prompted by tragic incident (examples include Advocates for Workplace Safety formed by Fran Kavanagh in NSW in the mid 1990s and a similar campaign in Ontario led by a parent who lost his son in an incident within days of starting his first job). More recently community campaigns have drawn an explicit connection has been drawn between contingent work arrangements and OHS, including campaigns in relation to the OHS risks encountered by immigrants, especially Hispanic immigrants, in the USA (which has sparked a formal investigation by OSHA). In the USA there have also been a series of community-based anti-sweatshop campaigns, often involving 323 --
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university and even high school students (as has occurred to some extent here). Referrring to one such campaign the AFL-CIO’s Work In Progress on-line reporter stated: Declaring April 27 Sweatshop Awareness Day, New York City high school students participated in an anti-sweatshop fashion show at Hunter College in conjunction with UNITE and the New York Public Interest Research Group. The event was part of a campaign by New York area high school students working with UNITE to support better conditions for garment workers. The students are encouraging their classmates to wear only union-made goods for their prom and are signing pledges to present to formalwear stores, demanding the outlets only provide sweatshop-free brands. For more information about the sweatshop-free prom campaign, and for pictures of the fashion show, see www.behindthelabel.org .
In the UK the death of a young leased worker at Shoreham docks in April 1998 led to the establishment of the Simon Jones Memorial Campaign. In 2002 the Campaign commemorated the fourth anniversary of Simon’s death by organising national day of action against casualisation that included gatherings (with banners etc) outside the offices of major labour leasing firms in a number of cities as well as a picket outside the annual Building Industry Awards dinner in London (Simon Jones Memorial Campaign http://www.simonjones.org.uk/latest.htm and This is Brighton & Hove 24 and 25 April 2002). The remainder of this chapter will discuss union initiatives in relation to particular work arrangements (following the same pattern as earlier chapters of this report). 9.2 Subcontracting/Outsourcing Union initiatives in relation to subcontracting have involved both collaborative ventures with industry under the auspices of OHS legislation, political lobbying (including successfully pressing that OHS be accorded serious attention in the current [Cole] federal inquiry into the construction industry) and direct industrial negotiation. The Labor Council of NSW has negotiated a memorandum of Understanding with the Department for Public Works, binding the Department to deal only with contractors who meet minimum employment and OHS standards and also establishes enforcement responsibilities (Workers Online, Issue 133 2002). In a number of industries unions have also opposed the outsourcing of maintenance and other activities by government, claiming that this action is leading to serious OHS problems. For example, it was claimed that outsourcing of maintenance in hospitals was leading to incidents such as a defective emergency generator (oil and water levels had been ignored) at Lithgow hospital (see Workers Online, Issue 109 2001). Union arguments are that contractors fail to use properly trained personnel, cut corners and are not as careful as 'in-house' staff. On occasion unions have been able to negotiate limits to the use of contractors at particular worksites, though job security and other factors appears to have played a generally stronger role in this than OHS concerns (for two recent examples see WorkForce Issue 1352 24 May 2002: 5). In industries where subcontracting is already the norm unions have supported collaborative interventions. In NSW construction unions were actively involved in promoting attention of the Construction Industry Reference Group to the OHS risks associated with subcontracting and in the development of a MOU on managing contractor safety signed by major construction firms (including Subbypack referred to elsewhere in this report). In essence this development is consistent with calls by International Federation of Building and Woodworkers (Murie, 2002) that clients and contractors associations should OHS provisions 324 --
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are a mandatory component in tender documents (to ensure subcontractors consider OHS in their cost estimates and to remove this as a basis for under-cutting competition) and to ensure all management and workers on site have adequate training and induction. At the same time, as noted earlier the MOU is linked to major construction firms and therefore many small operators (especially in the housing sector) fall outside its scope. One problem for the union here is that their membership is low in relation to the housing sector and small operators, severely limiting the basis upon which they could pursues similar improvements without active government (as in Queensland) and hopefully industry association support. In terms of direct negotiations within the industrial relations sphere, unions such as the Construction, Mining, Forestry and Energy Union (CFMEU) are seeking to limit or control the extent of subcontracting, or more particularly multi-level/multi-tiered or pyramid subcontracting, and to restrict labour leasing by incorporating special provisions into enterprise bargaining agreements with builders. In the public sector where privatisation can effectively entail a permanent form of outsourcing as well as contributing to the outsourcing of other activities) unions have publicly raised a number of safety concerns. For example, in the NSW railways unions have raised a number of concerns about failure to adapt OHS management systems to take account of issues raised private rail freight operators (resulting in multiple users of the track and multiple chains of command). For example, in July 2002 the NSW assistant secretary of the locomotive division of the Rail, Tram and Bus Union responded to a collision between a freight train and a passenger train near Newcastle where the freight train driver had been unable to warn other drivers he was stopped. Every operator on any system of track in NSW must be able to communicate with each other, whether passenger service or freight service. At the moment that is not possible (Sydney Morning Herald 13 July 2002).
The union has argued that the outsourcing of track maintenance has also had serious consequences for OHS, both for those undertaking the maintenance work and those using the lines. During interviews the union cited a number of serious incidents such as one at Cleveland Street (involving seven maintenance contractor deaths between 1996 and 2000) and pointed to the loss then belated reintroduction of a series of rules governing safe working procedures in track maintenance (such as site encapsulation). It was argued that even though ex-rail employees were often used on this work and the contractors were required to have management safety plans these had proved incapable of meeting the challenges of a more fractured setting. Other examples included the use of contractors to undertake vegetation clearing near lines (again examples of potentially serious incidents were cited) and to unload trains at Port Botany (so the train is no longer checked by the driver and guard before leaving). Although contractors were required to receive OHS training union officials expressed concern at the quality and independent auditing of this training. The union linked these developments to the devolution/splintering of state rail operations in 1996 (with the creation of separate entities to run city trains, country passenger trains, freight services and to undertake track maintenance). Given logistical constraints this project was unable to investigate these claims or management responses to them.
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9.2.1 Special award provisions and tracking mechanisms With regard to elaborate multiple outsourcing and subcontracting arrangements, workplace safety requirements cannot be enforced if the enforcement agencies do not know the location where the work is actually being performed. These agencies cannot discover the actual location of the workplace unless there exists a tracking mechanism to track the flow of work down through the chain of contractual arrangements by which work is outsourced. This need has been judicially recognized by the New South Wales Industrial Relations Commission in the matter of Transport Industry – Cash in Transit (State) Interim Award [2001] NSW IR Comm 220. This decision arose following a number of incidents where security guards performing outsourced work were injured or killed in circumstances of inadequate workplace safety arrangements. It should be noted that both the WorkCover Authority of New South Wales and the NSW Government’s Minister of Industrial Relations were parties to the relevant proceedings (which were conducted as Matters No. IRC 4296,5506,5507 and 5508 of 2001). In his judgement handed down on 21 September 2001, Justice Marks made a new interim award entitled the Cash Transportation (Non-Armoured Vehicles) Interim Award precisely in order to protect the occupational health and safety of security workers. At paragraph 12 of his judgement Justice Marks held that is was appropriate to utilize award mechanisms to ensure safe working conditions. In particular, Justice Marks has created an award mechanism to deal with situations where the provision of various security services (for the physical transfer of cash and valuables) involves off-site outsourcing by means of successive contractual arrangements. Justice Marks has inserted into this new security work award a mechanism for tracking the flow of work along the chain of contractual arrangements. This tracking mechanism appears as Clause 12, Chain of Responsibility, of the new interim award. This new interim award mechanism imposes a series of proactive obligations upon each party that outsources relevant security work. More specifically, each party that does this is required to notify the relevant authorities (including the relevant union) about the fact of outsourcing and the details of each outsourcing arrangement. For example, the relevant authorities must be informed about the identity and address of those who agree to perform outsourced security work. These obligations apply to each step in the contracting chain, regardless of how many steps there are. In addition, the party which agrees to perform outsourced work is further obliged to provide working conditions no less safe than the conditions provided by the principal contractor. Finally, the “second person” provisions of this clause make the principal contractor effectively liable for any failure (by subsequent contracting parties) to provide safe working conditions. In a sense, this new interim award creates a mechanism that gives practical effect to the general duty provisions of the OHS statutory framework. As noted elsewhere in the project, the development of tracking mechanisms has occurred or been proposed in other industries where elaborate subcontracting chains have been seen to seriously undermine safety, notably home-based clothing manufacture and long haul road transport. 9.3 Home-based Work, Telework and Telecall Centres Elsewhere in this report reference was made to special legislation introduced into NSW to protect the industrial, OHS and workers’ compensation rights and entitlements of home-based clothing workers (most notably via the Industrial Relations [Ethical Clothing Trades] Act). It 326 --
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should also be noted that both federal and state clothing industry awards contain special provisions that entitle home-based workers to the same minimum wage rates and other entitlements of factory-based workers (and with licensing/registration and union notification requirements to help give effect to this). Leaving this industry aside in practice much home-based work operates in a regulatory vacuum that unions have had very limited success in addressing through conventional negotiation mechanisms. A survey of its enterprise agreement database (ADAM) by ACIRRT (2002: 8) found that only 2.2% of collective agreements and less than 1% of federally registered individual contracts (Australian Workplace Agreements or AWAs) contained working from home provisions. Indeed, the number of such provisions has actually been in decline from the peak year of 1998 (when 4.1% of enterprise agreements contained such provisions). While a number of these agreements contained elaborate provisions in relation to hours of work and OHS this was by no means typical. In relation to another area of concern, namely homecare, in several jurisdictions unions have joined collaborative initiatives with employers and the relevant OHS agency to develop guidance material and the like. As mentioned earlier unions have also formed a national group to deal with the industrial and OHS issues raised by telework and telecall centres. In November 2000 the ACTU Call Centre Unions Group launched a voluntary Minimum Standards Code, which subsequently received support from a number of state governments as well as the NSW Local Government Association. With the assistance of two academics, the ACTU Call Centre Unions Group (2002) undertook a survey of almost 1,000 telecall centre workers from 88 different centres to assess actual wages and conditions with those specified in the Code. Amongst other things, the survey found that only half the respondents always received minimum wages identified in the Code (and less than a quarter of casuals had received to the 25% loading), almost half never received a five minute break every hour and the overwhelming majority (from 78 to 94% depending on the test) did not receive regular voice, ear or eye tests. Only 17% of those surveyed believed they had received adequate training. One quarter of those surveyed reported not having an effective OHS committee in their workplace and just under half of telecall workers engaged by labour hire agencies indicated they were only sometimes or never allowed to participate in staff, company or union meetings (ACTU Call Centre Unions Group, 2002: 3-4). While such findings must be treated with caution they reinforce the findings made elsewhere in this report that there are serious shortcomings with regard to the worker involvement/participatory mechanisms in relation to a range of contingent workers. In order to expedite the debate over the OHS effects of telecall centre work and the introduction of remedial measures the Australian Services Union (2002) has also undertaken a survey of 658 telecall centre workers as part of a longer-term project, examining issues such as work-related stress, injuries, training, performance monitoring and comfort/working conditions. One interesting finding was that, compared to full-time and part-time workers, a significantly higher proportion of casual workers reported that their working environment was uncomfortable (Australian Services Union, 2002: 18). Other union initiatives include the production of guidance material for telecall centre workers, such as a guide on headset safety (see ACTU, 2001) – something also undertaken by unions in the UK and elsewhere (see for example PCS, no date and UNISON, 2001). In this area, and in relation to clothing outworkers, unions could justifiably claim to have pioneered the development of codes that later served as a reference point if not model for government codes 327 --
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(see Australian Services Union Central and Southern Queensland Clerical and Administrative Branch Press Release 6 December 2001). Unions have also sought to ensure that other states and territories take up codes once they have been adopted in one jurisdiction. A number of union representatives argued that, given the intense level of competition within the industry, to be effective codes would need to have the status of regulatory standards. Several claimed that the OHS managers of some large operators had privately indicated support for such an approach because of the difficulty they had encountered in negotiating reasonable standards with other managers within their own organisations. 9.4 Labour Hire/Labour Leasing Some unions continue to seek agreement from employers to limit the use of labour hire in enterprise bargaining agreements. As noted in other parts of this report the shift to outsourcing and labour leasing arrangements can entail a direct cost saving to employers. In NSW the Labor Council has tried to prevent this by launching a test case before the Industrial Relations Commission to establish award wages and conditions for workers employed by labour hire firms equal to those pertaining to employees of the host company. Labor Council argued this action had been taken as response to union frustration at NSW government delays in implementing recommendation of the labour hire working party inquiry (Workers Online Issue No.134 2002). Moves to establish an award covering labour hire have met with some success (Workforce Issue 1350 10 May 2002). However, under present federal industrial relations laws it cannot be presumed the award would cover all operators (even ignoring practical difficulties of identifying and locating some) and minimum rates set would only partially limit the use of labour hire workers to undercut rates. In South Australia during interviews with regulators reference was made to an Australian Industrial Relations Commission decision in the metal industry that a casual worker who had worked steadily over a six-month period must be offered permanent-time work and a minimum shift of 3-4 hours under the state metal industry award (AMWU August 2001). It was believed this decision could affect the use of labour hire and could set a precedent for other casual workers (WorkCover Corporation of South Australia, 2001f). Individual unions have also sought to recruit labour hire workers and highlight the employment and OHS problems they encounter. For example, the Australian Manufacturing Workers Union (AMWU) has established a labour hire activist network and a hotline where labour hire workers are encouraged report under-payment, enforced conversion to selfemployment and OHS problems (such as the failure to provide PPE). The unions also had a strategy of encouraging HSRs (via education) to represent labour hire workers on the basis that in so doing they would be protecting the interests of other workers at that workplace. As noted in the previous chapter, the ACTU has produced a guidance note for Unions entitled OHS & Labour Hire (ACTU, 2000a). This guide highlights the critical responsibilities of labour hire firms, citing WorkCover Authority of NSW v Drake Personnel Ltd [1997] and Drake Personnel Ltd v WorkCover Authority of NSW [1999] in support of this. Stating its own position of labour hire firm responsibilities, the ACTU document emphasises the need to ensure they and the host employer are familiar with legal requirements and guides (and have consistent OHS policies), have appropriate OHS policies and systems in place (in terms of identifying, assessing and managing risks; provide adequate supervision, induction and training; and workers are trained to report incidents/misses and not to commence work until properly trained). In addition, the ACTU document emphasises the need for labour hire firms 328 --
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to take account of legislative requirements in relation to HSRs, workplace committees and other consultative arrangements. The issues raised by unions in Australia are by no means unique. In the United States, for example, the AFL-CIO Building and Construction Trades Department has recently filed a complaint with the Securities and Exchange Commission (SEC) alleging that a blue collar employment agency, Labor Ready, withheld information on injury rates, workers’ compensation costs and money collected for cash payments to workers in its annual 10-K report to the SEC. The AFL-CIO also alleged this was apparently done with the consent of its auditor, Arthur Andersen (AFL-CIO Work in Progress 20 May 2002). 9.5 Casual, Temporary and Itinerant Workers As with labour hire workers, a significant union strategy in relation to casual workers has been to try and reduce the disparity in effective wage costs (by increasing casual loadings) and set procedural rules in relation to their use (conversion to permanent status, minimum call-back times and the like. See for example WorkForce Issue 1225 3 September 1999). Although principally pursued for 'industrial' reasons such changes may have OHS effects. An important AIRC decision in metal industry in noted in the discussion of labour hire above. The South Australian Industrial Relations Commission has recently handed down a similar decision on clerical workers (but requiring 12 rather than 6 months service for conversion to permanency. Workers Online Issue 142 19 July 2002). It is too early to assess the full impact of these decisions on employer use of casual labour, although they clearly enhance the rights of these workers. At the same, consistent with what was suggested in Chapter 6 union representatives indicated that representing the interests of casual workers in relation to OHS and other matters was more difficult because these workers were more difficult to recruit and employers did not facilitate this. We are limited in our ability to deal with them and that’s not because we don’t want to its because employers don’t allow us…(so you get cases where) those people doing repetitive tasks, manual handling are doing it for five hours without a break.
While it is probably fair to say that, with some exceptions, union efforts on behalf of temporary workers is a fairly recent phenomenon, the representational hurdles they face (especially in some regulatory contexts) are serious. As noted in relation to the Simon Jones Memorial campaign in the UK, unions and community groups in a number of countries have sought to highlight risks of casualised employment. In Spain and Italy unions have conducted public campaigns, arguing that the increasing use of temporary workers has led to increased work-related injuries and in the former country unions launched a strike over subcontracting and injuries in the construction sector (eironline 28 April and 28 September 2000). International union bodies have also sought to raise the issue and have it incorporated into employment practices and codes of practice. For example, responding to the risks to media workers – increasingly engaged on a free-lance or part-time basis that weakens if not ignore safety protocols (especially when posted overseas) – the International Federation of Journalists has published a annual report on media staff killed as well as 6-point code of practice. Point 6 of the code (International Federation of Journalists, 2002: 37) states: 329 --
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Media organisations shall protect freelance or part-time employees. They must receive, on an equal basis, the same social protection and access to training and equipment as that made available to fully employed staff.
These community campaigns may perform a value in raising public awareness and reshape the attitude and responses of both employers and regulatory agencies. In keeping with this, union representatives cited several cases where they believed intervention could have been better directed. One case cited was in the retail baking industry where it was alleged that the employer organisation had applied for substantial grant in one jurisdiction so that guards could be fitted to dough making machines. In the union’s view such guarding should have already been undertaken by employers and that funding such as that sought could have been better directed to addressing the issue that the primary victims were young temporary workers. While the relevant agency cannot be held directly responsible for this type of claim by an employer organisation the union representative believed more explicit recognition of work organisation issues by agencies would encourage more effective remedies. 9.6 Part-time work and Mulitple Jobholding Interviews and other research undertaken for this project did not reveal instances where unions had undertaken specific OHS-related actions on behalf of permanent part-time workers or multiple jobholders. From what has been said elsewhere in this report the involvement of permanent part-time workers in consultative arrangements (such as OHS committees and HSRs) and the degree of OHS training they receive would seem to warrant attention from unons. 9.7 Downsizing/restructuring and job insecurity While union claims about a link between staffing levels/worker positioning and OHS are not in any way new (see for examples about the need for bus conductors in the 1960s) there does appear to be both increased union concern and activity in relation to this in the past decade. Union responses have ranged from calling for investigation/closer government regulation to attempting to negotiate improvements in staffing levels/oppose cuts or introduce other protections. In the wake of the Longford gas explosion, the national secretary of the Australian Manufacturing Workers’ Union warned that ‘lean safety’ could lead to more disasters. He called on any judicial inquiry into Longford to consider the role in the incident played by cost cutting of maintenance functions, workforce reductions and the contracting out of maintenance (ICEM Update 78/1998). As noted in an earlier chapter the subsequent Royal Commission found workforce reorganisation did contribute to the incident. The willingness to implement industrial action in support of claims about inadequate staffing appears most apparent when it is seen to involve an increased risk of occupational violence. For example, community-service workers in the NSW Department of Community Services recently refused to work at the Campbelltown Court House near Sydney after a caseworker was assaulted. This followed a requirement since February that case workers remain in the general waiting area, often placing them near families of children they have taken into care (Workers Online Issue No.133 2002). This can be seen as part of a broader campaign, where the union has been arguing that increased case-loads are leading to over-worked staff and inadequate services (Workers Online Issue No.136 2002). 330 --
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A perhaps more proactive form of intervention referred to by one union was its efforts to train HSRs and encourage them to get involved in downsizing/restructuring exercises in order that they might exert some influence on the process, including trying to ensure that some risk assessment was done in relation to the changes. At the same time, it was acknowledged that this was a difficult task given the degree of uncertainty (affecting workers and HSRs) such processes generated. In terms of collective negotiations the focus of union attention itself was also often drawn to those targeted for redundancy rather than mounting cases on behalf of the health and wellbeing of insecure ‘survivors’. Another difficulty was the belief that OHS agencies had done little to assist the process because they had failed to produce any guidance material on workplace restructuring that would indicate employer obligations and also strengthen the ‘hand’ of HSRs in terms of raising such issues. In this jurisdiction (not NSW) at least the union believed the OHS agency was more comfortable dealing with the ‘physical plant’ aspects of changes to work processes (as identified in general duty provisions) rather than changes to work organisation. On the other hand, another union representative from the same jurisdiction expressed grave scepticism about the production of more guidance material, which HSRs (if not employers) might find difficult to comprehend. She believed that the money would be much better spent (ie more cost effective) on re-educating inspectors to better understand the link between forms of work organisation and OHS. 9.8 Small Business In the main, unions have little representation in small business and during interviews for this project few union representatives expressed views on how this gap could be bridged except in relation to subcontracting arrangements. Nevertheless, a number expressed support for the notion of roving or regional HSRs along similar lines to the scheme that operates in Sweden (see discussion in Chapter 7 and Frick and Walters, 1998) and the similar workplace safety advisor system currently being trailed in the UK. As noted in Chapter 6, some union representative have also urged more enforcement activity and prosecutions in relation to OHS breaches by small business. One union representative also indicated that she had been approached by small business that had entered into subcontracting arrangements with large organisations for advice on how to comply with the latter’s demand for an OHS management plan. Indeed, she claimed her union gave regular advice to small business. 9.9 Voluntary and Other Special Category Workers Unions have sought to campaign against the employment of illegal immigrants in hazardous work situations, especially in industries like building and construction. In the course of interviews, representatives of a number of unions made reference to vulnerability of these workers and their desperation to accept work under almost any conditions. These concerns are not unique to Australia. A number of union representatives interviewed were highly critical of the laxity of a number of types of short-term visas, the failure to vet applications by employers, detect breaches or vigorously prosecute breaches. Unions have argued that project level collective agreements would make the employment of illegal immigrants far more difficult but the federal government has vigorously opposed this to pursue its own preferred policy agenda of individual contracts (as at the Lucas Heights reactor site see Workers Online Issue 132 2002). The CFMEU has taken action on behalf of backpackers, as well publicising issues of inadequate induction, underpayment, the failure to pay superannuation, workers' compensation and other entitlements, and tax evasion (for an incident at the Gazebo site see Workers Online Issue 135 2002). As a more general solution, the union has had some success in inserting a provision dealing with illegal immigrants into collective agreements across the 331 --
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industry (Workers Online Issue 133 2002). The exploitation and exposure to risks of large numbers of illegal immigrants in the USA, EU and elsewhere has also drawn increased attention from the International Confederation of Trade Unions.
9.10 Conclusions Overall, unions in Australia have been highly critical of what they see as a muted government response to serious OHS issues associated with contingent work arrangements. Again, there is nothing especially unique in this. For example, the Trade Union Technical Bureau of the European Trade Union Congress (ETUC) made scathing comments on the European Commission’s recent communication on a new community strategy for improving OHS, arguing (Vogel, 2002:4-5): The Communication does not address the existing scope of Community directives which exclude self-employed workers and domestic staff. This is a major flaw in the existing set-up. As things stand, for example, an employer who wishes to disregard asbestos or noise exposure limits merely has to bring in independent contractors. We have repeatedly pointed out that the domestic service exclusion indirectly discriminates against women, who make up the overwhelming majority of domestic help… The Communication’s purported analysis of the relationship between insecure employment and workplace health and safety is bankrupt not say (sic) distasteful. It comes up with the idea that “lack of motivation” may be the cause of the higher work accident frequency rate among such workers. What next – research on suicide trends among temporary workers? …The Communication skirts round chemical risk…Market rules are set to undergo radical changes in the coming years, so it is vital to frame a strategy for the workplace which takes them into account. The recent disaster in Toulouse threw two key factors into stark relief: the lack of effective employee representation, and the dire consequences of multi-tiered subcontracting. Neither of these issues is addressed by the Seveso major industrial hazard directive, and the latter appears nowhere in the health at work directives.
As is clear from the above quote, in several areas (notably in relation to self-employed workers and subcontracting) Australia regulators could claim to be somewhat ahead of the legislative situation in the EU but in other areas it is equally clear that Australia lags the EU (as in the case of the Seveso directive notwithstanding its limitations). For unions, one critical strategy in relation to improving the OHS and working conditions of some contingent workers has been a push for more pervasive minimum labour standards. In some industries, like clothing and trucking, the OHS problems of contingent workers have been closely associated with the weakening or poor enforcement of minimum labour standards, especially those pertaining to wages and hours of work. These problems are by no means unique to Australia and indeed in some there are striking historical parallels with an earlier period. In European and North America community-based anti-sweating bodies (usually operating independent of unions but with their support) have emerged over the past decade to campaign against the exploitation of workers at home or in ‘sweatshops’ engaged in the manufacture of clothing and other goods. In the UK, for example, the GMB joined with the No Sweat Campaign to target the conditions of workers making fashion clothing in 332 --
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London’s East End. These anti-sweating bodies are essentially analogous to the Fair Ware campaign in Australia (a group of religious, ethnic and other community groups) and strikingly similar to anti-sweating leagues prominent in Europe, North America and Australasia between the 1880s and early part of the last century.
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Chapter 10 Worker Entitlements Existing measures to address the problems some changing employment relationships pose for worker knowledge of and access to their OHS legislative entitlements have had, at best, a limited effect. Earlier chapters of this report identified a number of serious problems. These may be summarised as follows. First, available evidence (see too Quinlan and Mayhew 2000:194-95) indicate that subcontractors, temporary workers and home-based workers have a more limited knowledge of their rights and entitlements under OHS legislation. As noted in an earlier chapter, a number of jurisdictions have established interactive web sites so that some workers, especially younger workers (who are generally computer literate) can access OHS information, and do so in an entertaining fashion. These appear to worthwhile measures although it is unclear whether the effectiveness of these devices has been independently assessed. More importantly, special efforts to inform workers of their entitlements are only targeting a small proportion of contingent workers. Moreover, notwithstanding the efforts of regulators to establish the shared duties of particular parties and the over-arching responsibilities of principal contractors this report noted that complex work arrangements are a source of confusions and in some instances these efforts must confront deliberate efforts by some parties to mislead workers as to their rights and entitlements. Second, in addition to the problem of ignorance there is also a question of being able to take advantage of legislative protections. The is report cited evidence that, a number of groups of contingent workers were reluctant to raise OHS issues or in other ways exercise their legislative entitlements for fear this would jeopardise their employment prospects. As with the first problem, this problem is not unique to Australia (see Aronsson, 1999). Third, while participatory mechanisms form a critical part of post Robens OHS legislation in Australia in the main these mechanisms were designed upon the presumption of that most workers were employed in permanent jobs at large workplaces. Little attention was given to how subcontractors, temporary and leased workers and the like should have avenues to participate. Even where, as with temporary workers in large workplaces, they were covered by participatory mechanisms such as workplace OHS committees the evidence presented to this report from regulators and others was that no active efforts are made to achieve this by most employers and nor is the situation vetted by inspectorates. In sum, there are serious shortcomings with regard to worker involvement that need to be addressed both modifying existing legislative mechanisms and by undertaking steps to ensure these and existing requirements are actually implemented by employers. Fourth, the decline of union representation has exacerbated second and third problems just mentioned because it means fewer workers are able to voice OHS problems through their unions and there is less scope for unions to provide support for participatory mechanisms, especially the functioning of HSRs. Again, the international evidence is unequivocal that union presence facilitates better OHS outcomes. 334 --
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Fifth, with some exceptions, existing inspectoral practices do not focus on the sort of work organisation issues that are frequently of critical importance to contingent workers. An important exception is the multi-agency behind the label strategy being implemented in the NSW clothing industry. More inspectoral attention and new enforcement strategies need to be targeted at other especially vulnerable groups of contingent workers. Without such activity there is simply no scope for such workers to achieve the legal protections enshrined in legislation.
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Part 3: Evaluating Existing Remedies and Developing New Strategies: Workers’ Compensation and Rehabilitation
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Chapter 11 Regulatory initiatives, enforcement strategies and sponsored collaboration: workers’ compensation/rehabilitation 11.1 Introduction As noted in an earlier chapter the growth of contingent work arrangements pose a number of problems of workers’ compensation agencies. One major policy issue is the declining overall coverage of such schemes (ie the proportion of the workforce that has access to workers’ compensation entitlements). At present workers’ compensation agencies are faced with the dilemma of whether they should: press for an extended coverage provisions to combat the erosion of their coverage base and thereby avoid situations where amongst workers undertaking essentially identical tasks only some are protected by workers’ compensation; try of manage the administrative complexities of coverage provisions which seek to slightly and specifically extend on the common law contract of employment; or remain tied to or pursue a narrow coverage that effectively excludes a large and in all probability increasing number of workers At a more immediate level, agencies must deal with a number of administrative problems arguably exacerbated by changing employment relationships, namely: o determining whether injured workers are eligible for cover and who is/was their employer at the time they were injured or work-related exposure; o ensuring employers take out workers’ compensation insurance, and do so at the appropriate level; o promoting prevention and adequate treatment and rehabilitation of injured workers in a setting where more workers are employed on a leased or temporary basis. 11.2 Issues of Coverage, Eligibility and Claims behaviour At one level, the growth of work arrangements that are formally excluded from workers’ compensation cover, are only available on a voluntary basis or are associated from a lower level of claims (due to ignorance etc) from otherwise entitled workers may be seen as not being especially problematic for workers’ compensation agencies. This is because they result in a lower number of claims and reduced risk exposure. Formal claims coverage may also be viewed in terms of the administrative efficiency of claims administration rather than in terms of its social and human impact. It is arguable that administrative practicality/efficiency was the dominant theme in the discussion of coverage to be found in the final report on national consistency prepared by the Heads of Workers’ Compensation Authorities (1997: 32-36). In its assessment the report weighs the arguments for expanded coverage (such as consistency and equity) against practical considerations (such as difficulties of contractor coverage) before indicating the HWCA will maintain a watching brief that leaves open the option of either expanding or restricting coverage in the future (Heads of Workers’ Compensation Authorities 337 --
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1997: 35). This approach seems surprising in the light of arguments raised the earlier Industry Commission reports (1994, 1995) on workers’ compensation and OHS and given the explicit recognition of disguised forms of employment in the HWAC’s 1996 interim report. The issue of effective coverage or the claims behaviour of vulnerable groups resulting from labour market changes is not really addressed although evidence in this report indicates they represent equally serious issues. Further, while the report contains a significant section on taxation this refers to the important issue of taxable benefits and no mention is made of the association between certain tax/work arrangements in particular industries and evasion or minimisation of workers’ compensation coverage referred to in chapter 5. However, interviews for this project (conducted five years since the HWCA report) revealed a rather different situation. While acknowledging both the perspectives just referred to, interviewees from most agencies indicated that they viewed the extent of workers’ compensation coverage as a legitimate and important policy question. Indeed, most expressed concern at the both the general community and industry/occupation specific effects of decline in coverage. This included a view that all workers should have entitlements when injured at work as well as concern at the level of ‘hidden’ injuries (ie those not resulting in workers’ compensation claims) in particular industries like construction, due to extensive subcontracting arrangements. From a strictly insurance perspective there was concern that any expansion in coverage had to matched by an ability to collect the requisite funds from employers. As one regulator put it: If we are going to open up the floodgates we’d like to marry up the claim with the premium.
As mentioned in with regard to prevention, one way of dealing with the complexities of employment status is via the use of deeming provisions and this practice is by no means new. For example, for some years in Queensland certain categories of building subcontractors were deemed as employees for the purpose of workers’ compensation if they only provided handtools. According to persons knowledgeable of the industry this extension was significant although it was also noted that drawing the distinction had not always proved unproblematic (with debates for example as to how portable was a particular item of equipment like a nail gun). Several years ago the legislation was amended so coverage was wound back to PAYE taxpayers but this has since been reversed following a change of government. Ignoring political/ideological debates over coverage it is fair to say such changes in policy only add to a level of confusion surrounding entitlements compensation. Nevertheless, several jurisdictions were making efforts to address gaps in existing coverage by redefining their coverage provisions and/or including special deeming clauses. For example, in the ACT new workers’ compensation legislation to take effect from July 2002 has altered the definition of worker to expand coverage and thereby take in a wider array of persons. This followed a Report of the Workers’ Compensation Monitoring Committee (ACT Government, 2001:9-10,35-39) that recommended that the definition of worker be simplified and broadened to include not only those who would fit under the common law definition but also a broad range of self-employed subcontractors. The report also recommended that the onus of determining the status of workers for the purpose of workers’ compensation should rest with those who engage them. These recommendations were explicitly justified via reference to changing work arrangements and the associated problems identified at some length in this report. Criticising the existing complex and constrained coverage definition the report (ACT Government, 2001:35) had stated: 338 --
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The result of these various clauses and sections in the legislation is to create uncertainty in many circumstances as to whether certain persons are workers for the purposes of workers’ compensation legislation. With the changing work environment and the rapid development of new workplace arrangements and agreements, the result is an increasing number of people face uncertainty as to whether they are covered. Similarly, a growing number of employers are facing the problem of determining whether the persons they are employing or retaining are workers for the purposes of the current workers’ compensation legislation.
Further to its rationale for recommending change the report referred to the problem of unincorporated bodies (like self-employed workers), labour hire companies, householders and volunteers. One example of the resulting legislation cited during interviews was in relation to subcontractors. Those doing 80% of their work for the same company will be deemed workers (or employees of the principal contractor) for the purposes of workers’ compensation. This changes was especially targeted at the construction industry although it will pick up subcontract workers in other industries This included owner/drivers in trucking although agency staff interviewed were cautious, seeing this as an especially difficult area due to its interstate character and the mixture of clients (at the same time, trucking was not seen as a major concern as they were aware of only one long haul trucking operator based in the ACT). It remains to be seen how effective the broadening of coverage by altering the definition of worker in the ACT will prove. Deeming provisions to extend coverage have long been a feature of workers’ compensation legislation in Australia. For example, s8 and 9 of the Victorian legislation deems a group of workers, including owner/drivers to be covered by the Act but, as with deeming provisions in the earlier ACT legislation, there is a real question as to their effectiveness. If the ACT legislation has one feature to recommend over most previous attempts to expand the definition of worker for the purposes of the Act it is its simplicity. South Australia was another jurisdiction where current deeming provisions were under reconsideration. As in other jurisdictions it was noted that the basis for cover was founded in the historical master/servant relationship based contract of employment with a few extensions in relation to particular industries like building. Given the inconsistency between the definition of work under different statutes (OHS, workers’ compensation, taxation and industrial relations) and the manipulation of such categories, means of broadening the scope were currently under review so as to include persons who work for a living rather than only those that work for an employer. In other words, the aim was to bring self-employed workers and others into the scheme by re-examining the definition of worker rather than modifying it via deeming provisions. As one officer noted, the issue could not be ignored because: …the move towards more people not being in traditional employment relationships and being set up in traditional ways the workers’ compensation system is going to eventually become more and more irrelevant….And that’s why we’re starting to see data problems because people fall outside of workers’ comp systems but still get injured while doing the work. And (it) also doesn’t get picked up under the enforcement system of OHS (legislation) because that tends to deal with the employer and their relationship with the employee rather than in other ways.
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As noted in Chapter 5, workers’ compensation agencies have issued guidance material and undertaken advertising in an attempt to clarify who is required to take out workers’ compensation cover and on behalf of whom. The WorkCover Corporation of South Australia (2000b-j) has been especially active in this regard, producing simple guides on the workers’ compensation entitlements and exclusions relating to owner drivers, taxi drivers, council drivers, fishing crews, outworkers, cleaners, building workers, ministers of religion, sporting professionals, volunteers, performers and entertainers. As noted in Chapter 5 there is evidence of serious information gaps in relation to workers’ compensations amongst some groups of workers and additional informational would undoubtedly be of benefit. However, as also noted this message has not always achieved its goal, particularly as some principal contractors have used their economic power to place pressure on subcontractors to take out their own policy or discourage the making of claims. While obtaining evidence of such practices may not prove simple a number of targeted prosecutions might reinforce this message. Again, as noted in Chapter 5, changing work arrangements have also raised an issue of shifting coverage between the jurisdictions, most notably where outsourcing and labour leasing entails a shift of coverage out of the federal jurisdiction (ComCare). There is some question (and it was raised by agency staff) as to whether this transfer is leading to any ‘gaps’ both in terms of formal coverage and claims behaviour. A degree of collaboration between ComCare and other state and territory agencies to investigate this issue and, if necessary, take remedial steps would seem to be worthwhile. As in a number of other areas discussed in this report the multiplicity of workers’ compensation schemes in Australia is conducive to a number of problems in relation to co-ordinating coverage, premium setting, enforcement strategies and the like. The issue of coverage is also receiving attention in a number of other countries. In Canada, Germany and the USA some jurisdictions have amended their laws to clarify or extend coverage to independent contractors or other categories of contingent work like agency labour and homework (see Berreth, 1997:43-50; Whittington, 1998:25,27-8 and WCB of BC 1997:17). In Germany the term ‘fictitious’ self-employed was introduced but the practical application of this law remains the subject of debate (Reinhard and Jorens, 1999:14). As noted in Chapter 5 in addition to the question of formal coverage there is also the issue of effective coverage and under-utilizing claims behaviour. The survey evidence presented in this chapter suggests that limits in formal coverage understate the extent of gaps in schemes because where coverage is ambiguous a significant proportion of the members of these groups may not claim their due entitlements. Further evidence was presented to indicate that even amongst workers with unambiguous entitlements to workers’ compensation cover a range of factors including ignorance of this, fear of losing income or future employment prospects will mean that a significant number do not exercise this right. It was shown that these factors appear to weigh heavily on particular groups of vulnerable workers, including many holding contingent jobs. While there is occasionally public debate about fraudulent workers’ compensation claims the issue of under-utilisation by eligible workers is almost certainly a far more extensive problem and one liable to become worse if contingent work arrangements continue to expand. There are grounds for therefore improving the provision of information and this may entail sponsoring bodies that can represent the interests of vulnerable groups of workers. With regard to the better provision of information a number of jurisdictions pointed to recent initiatives they had made to increase worker access. These measures included permanent and 340 --
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special issue hotlines for workers and the reconfiguration of agency web pages to establish specific sections for worker-related information/queries as well as ‘frequently asked questions’ columns. Reviewing this material it was noted that, as indicated in interviews, the web pages did contain some information specifically addressed at temporary workers. Establishing ready links between various government agencies in terms of rights and entitlements under industrial relations, OHS and workers’ compensation legislation could further enhance information availability. However, while such measures appear to be of most value in terms of enhancing general worker access to information and while they may assist some contingent workers the effect is likely to be marginal since it seems reasonable to suggest many contingent workers are unlikely to have ready web access and some, such as home-based workers, may not find the information they need. Quicker access for employers to such information via the web may also benefit contingent workers although this presumes ignorance is the primary reason for non-compliance and that they will seek such information. Overall, the effectiveness of the web-based approach in terms of contingent workers needs to be assessed and other alternate strategies employed where appropriate. In relation to the very last comment it should be noted that most agencies use a range of sources to promote the dissemination of information and some of these other devices may be especially relevant to workers holding contingent jobs. For example, a number of jurisdictions (such as South Australia) produce multilingual brochures and even claim forms in the languages most relevant to their workforce. Translating services are also available for inquiries in some. Other initiatives by some jurisdictions include the provision of OHS and workers’ compensation information in post offices and other outlets. At various times jurisdictions, including New South Wales, have also used advertisements on radio, television and roadway signage to raise awareness. The level of knowledge may vary between jurisdictions (at one point it was suggested that knowledge of the South Australian scheme was high because it was more a social pension than insurance scheme) but the extent of these variations (if any), and whether they apply to contingent workers, is unknown. We do have some evidence that knowledge of workers’ compensation entitlements is low amongst some groups of contingent workers but that it does vary by jurisdiction. For example, the survey of 300 young workers with a fast food multinational referred to earlier (Mayhew and Quinlan, 2002:275) found that overall only just over 50% were aware of being covered but that knowledge was much higher in NSW (81.8%) than Victoria (44%) and Queensland (32.3% with an even lower figure for franchised stores of 29.8%). The reasons for the higher level of knowledge in NSW were not clear. Workers were asked about sources of OHS information but not specifically about workers’ compensation. Their responses to the former were that more stated they got their information from managers than those surveyed in Victoria and Queensland, the response rate in terms of ‘friends’ was about the same and fewer NSW workers reported getting information from safety committees, trainers, union, government or others (Mayhew and Quinlan, 2002). Several agency representatives volunteered the view that most of the new information initiatives had been directed at raising worker and employer awareness of OHS prevention rather than entitlements to workers’ compensation. This was seen to reflect a general shift in government agency priorities in Australia (and in other countries for that matter) towards prevention. The question is has knowledge about workers’ compensation entitlements suffered as part of this transition? With regard to sponsoring bodies to provide information and represent some vulnerable groups of workers such as temporary workers there are a number of existing models as to how 341 --
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this might be achieved. In some Canadian jurisdictions, like Ontario, occupational health or occupational health legal clinics (independent but partly funded by government) and the Office of Worker Adviser (or its equivalent government agency in other provinces) provide an additional source of advice to injured workers. Interviews with representatives from both the OH legal units and Office of Worker Advisor during a visit to Canada in 1999 indicated that both had taken on a useful role in terms of representing contingent workers. Further to this contact was made with an OHS academic at York University in Canada who has served on the board of a number of clinics. In general, despite deficiencies in data he supported the interpretation that workers’ compensation legal clinics and the Office of Worker Advisor were of value to contingent workers (and those involved in the clinics had embraced further action on marginal workers), but this was less apparent in the case of OHCOW clinics: The legal clinics and the OWA will pick up a fairly large number of contingent workers, especially since their focus is the non-unionized work force. I'm on the board of one of the WC legal clinics in Toronto, but I don't know if they keep any data on their client base that would allow them to identify 'contingent workers'. It was through my involvement in the contingent workers project with (names colleagues) that I suggested that the next Bancroft Institute workshop be on marginal workers and people were very enthusiastic. I'm less certain about the effectiveness of the OHCOW clinics in reaching contingent workers. They seem to be more closely aligned with organized labour. I am on the Local Advisory Council of the Toronto clinic…. I hear mixed things from clinics in other parts of the province, but my sense is that most of their resources go into unionized workplaces. Presumably they do have data on whether clients are unionized or not. I don't know whether their databases run deeper. I think it is fair to say that the resources you identify are, on the whole, ones that should be supported and even if there are glitches that one might want to address if it ever got to the stage of setting something like them up in Australia, they would provide useful models to consider.
The closest existing equivalent to the legal clinics in terms of providing advice to workers on OHS and workers’ compensation matters would be workers’ health centres located in some cities (such as Sydney and Brisbane). Women’s health centres located in various suburbs of Sydney (such as Liechhardt and Liverpool) also used to provide information on OHS matters in the 1970s and 1980s but we are unsure whether this activity continues. While both bodies provided information to contingent and other vulnerable groups of workers (especially migrants) in the past the extent of their current activities is unknown. It is likely that without a specific focus on this issue their coverage is patchy at best. Nonetheless, these bodies might provide a valuable non-government conduit for improving knowledge of workers’ compensation amongst contingent workers. The WorkCover Corporation of South Australia has established an Employee Advocate Unit that provides free confidential advice and will represent workers independently of WorkCover, its Claims Agents and the worker’s employer (WorkCover, 2001). In its brochure the Unit states it will also assist workers in expediting claims and those who have English language difficulties. No explicit reference is made to workers who are unsure of their eligibility or who are temporary workers. The effectiveness of these bodies in meeting the needs of contingent workers warrants careful consideration. Overall, government OHS and workers’ compensation agencies have become more adept at providing information to workers in an effective fashion. However, while some of this is 342 --
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relevant to the needs of contingent workers, there is an urgent need to assess effectiveness of this and whether more targeted measures need to be taken. Survey evidence cited in Chapter 5 indicates that workers obtain information on workers’ compensation from a variety of sources and knowledge of this may help to better target future strategies. In concluding this subsection it is worth quoting a very valuable summary of the coverage/access issue and potential solutions to it that is to be found in the recent issues paper prepared as part of the current South Australian government inquiry into OHS and workers’ compensation (Government of South Australia, 2002: 9-10): For the purpose of coverage in relation to employment ‘worker’ is generally defined as someone who is subject to a contract of service. In addition various groups of people who work in other arrangements, usually in specific industries, are deemed to be workers for the purpose of access to workers’ compensation benefits for example, building, cleaning, taxi-cab driving, entertainers, outworkers (Regulation 5 of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations 1999). The deeming of classes of people who perform work under different arrangements to a contract of service, has been a seemingly convenient way to extend coverage of workers’ compensation while relying on the core concept of contract of service. Over time however, the changes is (sic) workplace and employment arrangements have been such that there has emerged a great variety of alternative means of getting work done. Some of these contractual arrangements are essentially contrived to avoid employer obligations, including workers’ compensation. Others are simply innovative and difficult to characterize as contracts of service which would bring them within the coverage of workers’ compensation schemes. The proliferation of these ‘atypical’ forms of employment presents a challenge to the use of deeming provisions to extend coverage of workers’ compensation. It may be impractical in the future because of the size and diversity of the groups which do not conform to the contract of service definition. Further, some of the current deeming provisions are complex, not well known or understood, dated in terms of quantum, and compliance can be quite poor. There are some estimates which indicate a large minority of people who earn their living by selling their labour (‘workers’) are not within the coverage of Australian workers’ compensation schemes. This has important implications for the viability of the schemes, the health safety and welfare of those people, and the position of employers who do not seek to avoid statutory health and safety and compensation responsibilities. There is provision in South Australia for WorkCover to cover self-employed people under s103. An estimated 10% of the SA workforce is self-employed (around 65,000). While there are a number of legal and risk and financial management considerations associated with utilizing this provision, the extension of the safe work programmes of the scheme into this sector would be likely to be of benefit to the community. In addition, working life is far less predictable than even a couple of decades ago. Many people are multiple jobholders at any one time, and over time. As a consequence they may have highly variable access to compensation…. The scope of the OHS general duties and obligations may be a useful reference point for drawing more consistent and comprehensive coverage for those who suffer injury
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and loss as a result of the failure to comply with risk management and care duties and obligations.
The clear thrust of this paper is that, on the basis of simplicity, consistency, effectiveness equity and overall community benefit, there are strong grounds for extending coverage by widening the basic definition rather than extending existing deeming provisions. This is an argument that finds support in other evidence presented in this report. For example, moving the approach to coverage to one more consistent with the broad ranging duties found under OHS prevention law would reduce the existing level of confusion and scope for manipulation as well as facilitating synergies between compensation and prevention activities. In short, a substantial widening of coverage so that it is no longer reliant on the contract of service definition of employment warrants serious consideration. 11.3 Improvement in Information Collection and Premium-Setting By and large agencies have only recently become aware that employment status can affect claims experience and so are in the very early stages of assessing what this could mean in terms of the information they collect and premium setting. No agency spoken to was aware of recent US research indicating substantial differences in claim experience/costs that can be attributed to the use of temporary workers or as a result of organisational restructuring (see Chapter 5). A number expressed keen interest in these findings. When agency representatives were asked whether, if similar findings were made in relation to their own jurisdiction, they would consider whether employment status should incorporated as a factor in premium setting several said they would look at the issue but it is fair to say there no great enthusiasm was expressed for this path. Given the challenges of administering already complex premiumsetting regimes this desire to avoid another complication is entirely understandable. The one clear exception was the desire of a number of jurisdictions to set premiums specific to the labour hire industry (and by so doing effectively set a premium for an industry built on temporary workers). This development is discussed in more detail in the section on labour hire below. Irrespective of whether employment status is used as a further input into premium setting, information on employment status in claim forms could still be collected/analysed and used by agencies to shape their policy interventions and monitoring of employer/industry performance. Further, as noted at several points in the report at least one agency has also undertaken some retrospective investigation of the link between organisational restructuring and increases in the number of stress-related claims affecting particular employers. A number of initiatives with regard to premium setting, involving principal contractors/supply chains are discussed below. Another issue, although somewhat tangential, is worthy of mention. As noted at various points in the report the use of flexible work arrangements can be connected to flexible business arrangements including the transfer of businesses via outsourcing arrangements and the formation of new corporate entities with essentially identical owners (ie use of the corporate veil). In an effort to ensure that new business entities are not used as a vehicle for manipulating workers’ compensation premiums and to encourage a better claims experience more generally one jurisdiction referred to its policy that the new ‘owner’ would inherit the claims/premium history of the firm. It was hoped this approach would affect the pricing of businesses in terms of a higher price for firms with a good claims record and a lower price for firms with a poor history. Agency staff indicated this approach has been upheld following a challenge in the courts. This approach may warrant consideration. It is 344 --
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worth noting that another section (s58B) enables the WorkCover Corporation to impose an additional premium on firms who sacked an injured employee. Further, as noted at various points in the report including Chapter 5, serious deficiencies in existing claims data sets in terms of both reporting and recording, as well as additional deficiencies in the National Data Set due to the disparate recording conventions of the various jurisdictions, mean that workers’ compensation statistics provide a very flawed measure of the incidence of work-related injuries and disease. This has implications for the use of the data, especially in relation to prevention but also in terms of assessing the systems performance in relation to workers’ compensation and rehabilitation. For example, what can we determine from return to work trend data when there is an increasing number of leased, temporary or subcontract workers who have face real difficulties accessing return to work programs? These deficiencies have been insufficiently recognised in the assessment of comparative performance (see Chapter 5) and as yet there have been few attempts to address the problem. This reflects a more general issue about the inadequacy of current data sources that will be addressed in Part 4. Returning to the issue of premium setting, it should be noted that the industry classifications (WIC codes) and other aspects of premium setting has received attention in NSW in recent years as part of a government initiated general review of workers’ compensation as well as internal policy review by WorkCover NSW. Prior to June 2001 premiums were set on the basis of 110 industry classifications. As noted in a recent discussion paper prepared by WorkCover NSW (2002: 3) this was too limited and resulted in a considerable degree of cross-subsidisation between employers undertaking low risk activities and those undertaking high risk activities. After June 30 2001 a classification system was introduced based on the Australian and New Zealand Standard Industrial Classification (ANZSIC), increasing the number of classifications to in excess of 500. The introduction of this system resulted in lower premiums for about half NSW employers and higher rates for others (WorkCover NSW, 2002: 4). At the same time, the discussion paper noted the problems posed by labour hire and group apprenticeship schemes who were eligible for multi-class policies whereby the wages of ‘assigned’ workers are allocated to the industry class most closely associated with the activities they undertake. Echoing concerns of other jurisdictions (see chapter 5 and below), the paper (WorkCover NSW, 2002: 5) that there were a number of problems with this approach. It was susceptible to manipulation to avoid premiums on the part of labour hire firms, involved complex record keeping where labour firms supplied to a wide range of industries with different premium settings, and did not take account differences in the claims experience/costs of labour hire companies compared to general employers in that industry classification. It was noted that one solution to this was to adopt specific labour hire classifications for premium setting and that this approach had been adopted by both Victoria and South Australia (discussed below) and New Zealand. The latter had adopted a fivecategory approach (contract labour-non office, employment placement services, contract labour-both office and non-office, contract staff-office only and nursing bureau). The WorkCover NSW (2002: 6) paper observed: Introducing a separate class or separate classes for labour hire employers would mean that claims incurred by these employers would be separated from claims incurred by general employers. This may be desirable, as labour hire employers may have higher
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claims costs then general employers because of issues with return to work and the provision of suitable duties.
The paper recommended that stakeholder comment be sought on the adequacy of current arrangements and the option of moving to introducing one or more separate classes specifically for labour hire employers. As noted below, the experience of other jurisdiction indicates there is considerable merit in moving to establish separate classes of premiums for labour hire, ones that are both administratively practical and sufficiently discriminatory to account for significant differences in the risks attached to different sets of activity. By and large this report has not examined another critical aspect of premium setting, namely the bonus/penalty premium schemes operated by most jurisdictions (including NSW) to take account of significant differences in the claims experience of particular employers and thereby (hopefully) act as an incentive for improved OHS performance. As has long been recognised (Bohle and Quinlan 2000) such schemes need to be carefully devised and administered so that they do not simply act as an incentive for claims suppression or minimisation rather than a genuine improvement in OHS. In Chapter 5 it was noted that some groups of contingent workers are liable to be very susceptible to both tacit and overt pressure not to make claims (or to redirect treatment to Medicare) and there is some evidence of this actually occurring (although its extent is unknown). Further, an employer may improve their claims experience by either outsourcing an activity (especially high risk activities) or making use of labour hire workers. As discussed elsewhere, at least one jurisdiction believed the latter had been a serious problem, affecting both overall premium revenue as well as the premiums paid by particular employers. Indeed, it was a factor in the introduction of a specific set of premium classifications for labour hire in that jurisdiction. The link between premium discounts and the use of contingent work arrangements requires careful consideration. Like a number of other jurisdictions, WorkCover NSW has produced advisory material on how to secure a premium discount by improving the management of OHS. In 2001 WorkCover NSW (2001) produced a guide on premium discount benchmarking guidance material that closely aligned premium discount benchmarks with the a range of key preventative activities, but most notably the requirement for risk management and control under the OHS Regulation 2001 that mandated risk assessment. This appears to be a well-structure and valuable document (that doesn’t neglect issues like worker input and with a case study illustrating how to implement the process). An especially positive aspect from the perspective of this report is that the guide also emphasises the need to anticipate change with regard to new work/work processes, projects, plant and technology as well as the introduction of labour hire, contractors or new employees (WorkCover NSW, 2001: 4). With some slight modification to take more explicit account of temporary workers, workforce restructuring and several other matters, as well as introducing these into the sections dealing with assessment and implementation/control this guide could serve as a model for other documentation used in the prevention sphere. 11.4 Failure to take out workers’ compensation cover and ‘under-insurance’ As noted in Part 1 (especially chapter 5) evasion or under-payment of workers’ compensation insurance premiums by employers was a serious source of concern for workers’ compensation agencies in most jurisdictions. As noted in this chapter, evasion or underpayment may occur through a number of means, namely: 346 --
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• • • • • • •
Understating the number of employees or wage payments made, including use of cash payments and failure to declare short-term casual or deemed workers Providing other false information, including failure to declare related companies, false statement of business activity and discouraging injured workers from making claims or inducing them to make claims under Medicare Manipulating the classification of workers for the purpose of determining premiums in labour hire arrangements Failure to supply wage declarations and wage estimates resulting in automatic renewal at lower premium levels Failure to declare acquisition of an existing business to avoid the transfer of claims experience or liquidation of a company and its replacement by another company to avoid premium debt Establishing separate companies to avoid or reducing premiums payable Failure to take out a workers’ compensation policy at all when required
Information gleaned from WorkCover NSW and other jurisdictions indicated that the complete failure to take out a workers’ compensation policy was mainly confined to small firms (with the odd medium sized firm). At the same time, the transfer of businesses and legal ‘re-engineering’ of company titles could present opportunities for minimizing workers’ compensation premiums (by avoiding previous claims records) if not evading premiums altogether. While failure to pay was sometimes unintentional WorkCover NSW has identified a number of industries that are especially problematic in terms of the premium evasion/underpayment (the more serious issue), notably construction, contract cleaning and clothing manufacture. Most other jurisdictions also identified these industries as presenting major problems. It would appear more than coincidental that these are industries all marked by multi-tiered subcontracting and are prominent employers of recently arrived immigrants including illegal immigrants (whose ignorance and fear arguably helps such practices to occur). Further, as earlier sections of the report have shown, these industries also present serious problems in terms of OHS prevention (and the enforcement of minimum employment standards more generally). Indeed, wide-ranging forms of regulatory evasion appear to be an endemic problem in thesis industries. At least two of these industries (clothing and construction) have been the subject of dedicated investigation and action by the Australian Taxation Office in an effort to combat widespread tax evasion and the construction industry has also been the subject of a National Crime Authority investigation into money laundering. These connections are not surprising since the widespread use of cash payments in these industries provides simultaneous opportunities for understating wage bills, understating employee lists (or subcontractors covered by deeming provisions), understating payroll and income/company tax obligations and disguising/laundering cash obtained from illegal activities. It should also be noted that these connections were identified during interviews with the agencies not by the author of this report. Essentially failure to pay the appropriate insurance cover can be detected in two ways. First, this may be revealed when an injured worker makes a claim and their employer is found to not have paid the appropriate premium. Second, under-insurance or non-insurance may be revealed in the normal of auditing process carried out by workers’ compensation agencies. Each jurisdiction has there own penalty regime in relation to detected breaches but a common one is to require the employer to pay the premium deficit (backdated a number of years where necessary) plus a penalty payment (of say 100% of the required premium), with prosecution for more serious offences. A number of jurisdictions interviewed referred to large audit 347 --
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programs or specific enforcement measures they had introduced to deal with the failure to pay appropriate workers’ compensation insurance cover. Jurisdictions used a range of enforcement measures in the past. In NSW, which is probably fairly typical, the main mechanism was wage audits of employers, primarily initiated by insurers on a random basis and amounting to about 1.7% of policies being audited on an annual basis (WorkCover NSW 2001d: 10-11). WorkCover investigated notifications of under-insurance or non-insurances from insurers, unions and member of the public (in the year to June 30 2000 it investigated 82 notifications) and also undertook a number of compliance blitzes (see Chapter 5). When non-compliance is identified prosecutions are seen as appropriate (in 1999/2000 87 employers were convicted for avoiding workers compensation insurance and fined a total of $104,634 plus further court-award penalties of $347,369 or double the unpaid premium). However, as noted in Chapter 5 premium recovery in the five years to 1999/2000 amounted to less than 20% of the ULIS payout. As the WorkCover NSW (2001d: 10-11) Green Paper on compliance observed, this approach had only limited success and from early 2000 onwards WorkCover sought to develop a more strategic approach. The new approach was based the use of data mining software, a legislative framework to discourage non-compliance and enhance WorkCover’s investigative and prosecutorial capacity, the strategic use of publicised prosecutions, better stakeholder information on their compliance obligations and optimising enforcement resources (in terms of cost and revenue). WorkCover’s advanced data mining software develops lists of employers that should be investigated. This tool was used in November 2000 to identify around 1800 employers suspected on under-insurance and WorkCover directed insurers to conduct wage audits on these employers for up to five years (WorkCover NSW 2001d: 12). The accuracy of the tool was confirmed by preliminary investigation of identified companies with the Green Paper (WorkCover, 2001d: 12-13) noting that wage audit returns for 2000/2001 had more than doubled over the previous year, as had the average return per $1 of audit cost. The data was also used to establish a taskforce to crack down on premium evasion in the metal manufacturing, construction, cleaning, and clothing industries (WorkCover News December 2001-February 2002, 47: 11). In terms of the legislative framework and offsetting incentives to under-insure, amendments were introduced in November 2000 that provided for new offences such as a general offence of fraud as well as knowingly supplying false information (WorkCover 2001d: 14-15). The amendments also increased fines for non-insurance and fraud to a maximum of $55,000 and/or imprisonment for two years (WorkCover News February-April 2001, 44: 6). As in most other jurisdictions employers supplying false information can be required to pay a substantial penalty on the avoided premium in addition to the fine. Further legislative amendments in 2001 broadened WorkCover and insurer access to any records relevant to calculating premiums and extended liability to culpable directors (WorkCover 2001d: 15; WorkCover News December 2001-February 2002, 47: 11). In several other jurisdictions targeted audits have been undertaken to better identify the overall extent of these problems and those industries and employers most likely to engage in such practices. A number have also resorted to enforcement blitzes (see discussion in Chapter 5) and publicity is also given over to the prosecution of companies found to have evaded or grossly manipulated premium payments. Some jurisdictions have also reorganised their compliance/investigation units to make them more effective, with meeting the problems posed by changing work arrangements clearly forming part of the agenda here. For example, in 348 --
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South Australia the targeted audit referred to in Chapter 5 has been linked into a reorganisation of the investigation area and most notably the attachment of a contingent of analysts to look at compliance issues, including the targeted risks just identified. In other jurisdictions the penalties applying to offences in this area have also been significantly increased. The overall effectiveness of these measures is unclear. The combination of targeted audits, blitzes and highly publicised prosecutions or other enforcement measures would seem more likely to have more effect than isolated rounds of inspection and prosecutions. Representatives from Tasmania indicated that the agency had established a pattern of prosecuting offenders but this did not appear to diminish the number of offenders being detected. At the same time, the view was expressed that recent changes to legislation requiring Tasmanian employers to provide more details of their wage payments would provide a basis for more systematically identifying and addressing compliance problems. In several jurisdictions consideration has been given to strengthening the nominal insurer and enforcement provisions in their legislation. For example, in its report to the ACT Government (2001:70), the Workers’ Compensation Monitoring Committee recommended enhancing the existing legislative provisions relating to the nominal insurer, particularly in terms of recovering funds from the employer who failed to take out cover. While NSW has been at least as active as any other jurisdiction in this regard the 2001 Green Paper (WorkCover 2001d: 18-32) noted that it was too early to judge the effectiveness of some recent legislative changes but also contemplated a number of additional options. It noted proposals from the Construction Industry Reference Group that: • • • • •
WorkCover inspectors have the power to issue a notice directing an employer to take out workers’ compensation insurance together with a penalty for non-compliance; Introduce a requirement that employers make quarterly wage declarations; Require insurers to process premium adjustments quarterly; That the definition of employer be amended to include sole traders and partnerships; That the definition of employer be amended so a person employing workers in NSW for a temporary period would be deemed as an employer in NSW for that period and take out insurance for that period
As can be seen, these recommendations were an attempt to address the evasion of premium requirements due to numerous small employers and independent contractors and elaborate multi-tiered subcontracting. Rather than canvass the Construction IRG proposals in detail the Green Paper examined a range of options that covered many of the issues the IRG raised. The 11 options examined were: • • •
A proposal to remove the uncertainty regarding contractors/deemed workers by defining all individual contractors as deemed workers unless they employ labour or have a workers compensation insurance policy. A proposal to remove the uncertainty regarding contractors/deemed workers by defining all individual contractors as deemed workers but allowing them to opt out if they satisfy strict criteria, including having appropriate insurance. A proposal to remove the uncertainty regarding contractors/deemed workers by defining individual contractors who meet the ATO 80% test as ‘deemed’ workers. 349 --
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• •
•
• • • • •
A proposal to remove the uncertainty regarding contractor/deemed workers by amending the legislation to require sole traders and partnerships to obtain workers compensation insurance. A proposal to address non-insurance or the under-declaration of wages by subcontractors by making principal contractors responsible for ensuring that their subcontractors are properly insured under the correct tariff classification and that the subcontractor has declared the correct wages. A proposal to address non-insurance or the under-declaration of wages by the introduction of a requirement that the employer’s full legal name and the workers compensation insurer be shown on the worker’s pay slip and that the employer notify the worker in writing if the employer changes. A proposal to address premium avoidance through company splitting by the introduction of grouping provisions to enable premiums to be assessed at a group level (ie all related employers to be considered together for assessing premiums). A proposal to address premium avoidance by expanding the related corporations provisions to non-corporate trusts, partnerships and other business arrangements. A proposal to address premium avoidance by company splitting by amending the application of the ‘two times’ rule so that it does not apply to related corporations. A proposal to address the under—declaration of wages by the introduction of a requirement that employers provide the workers compensation insurer with a monthly list of the names of all the employer’s workers. A proposal to address premium avoidance by requiring employers to provide full and complete information to insurers for the correct allocation of industry classifications and the calculation of premium, and to enable insurers to retrospectively amend incorrect allocations and recover underpaid premium.
In concluding this section it is worth referring to important recent developments in NSW. WorkCover NSW and the Office of State Revenue have commissioned consultants to investigate issues of non-compliance re payroll tax and workers’ compensation (see Le Couteur and Warren, 2002). This follows the public issue by WorkCover of green paper on workers’ compensation insurance compliance (WorkCover NSW 2001d). The report recommended bringing wages calculations for workers compensation into line with payroll tax, with the eventual goal of alignment with federal definitions. The harmonisation of definitions between payroll tax and workers’ compensation jurisdictions will entail adopting standard definitions of key terms such as ‘employee’ and ‘employer’ and definitions of related commercial entities (grouping of companies for purposes of assessing liability). In addition the interim report proposed data matching between enforcement agencies. Finally, the consultants proposed that subcontractors be deemed to be workers for the purposes of workers’ compensation insurance (and the principal contractor who provide the subcontractors with work will be liable for the workers’ compensation coverage of those subcontractors) unless: o the contract provides services that are ancillary to the supply of goods (ie the labour value of the contract is less than 50% of the total value of the contract); or o the provision of services is ancillary to the use of the subcontractor’s vehicle (eg owner-drivers); or o the services are provided under the contract by two or more people, at least one of whom is an employee of the subcontractor; or o for workers’ compensation purposes only, the contract is with an incorporated body. 350 --
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Effectively, these exclusions are so wide-ranging and open to manipulation that they were unlikely to ensure workers’ compensation compliance in complex supply chains – chains that this report have shown to be typical of a number of industries where contingent work is pervasive such as road transport (including freight and taxis), building and clothing. Therefore, the consultants’ recommendations imposed inadequate obligations on principals at the top of subcontracting chains and in particular failed to deal with contracting steps that do not involve immediate employment relationships. Specifically, the consultants’ recommendations proposed a framework that failed to create principal contractor obligations (in relation to workers’ compensation coverage) in respect of the following four categories of contract, namely contracts with an owner driver; contracts with an incorporated body; contracts for more than labour (ie more than 50% value of contract not for labour); and contracts performed by two or more people (with one of those people an employee of the contractor. A superior alternative, in the view of this report, would be to construct to a regime of principal contractor obligations in relation to these four categories of contracts. In particular, the party that gives out the work must have a certificate of compliance which includes the following details about their own situation a) insurer; b) identity of employer (including ABN number.); c) number of employees and wages total (including real time updates on these figures); d) WIC code e); and period of insurance. In addition the party that receives that order of work must also have the same sort of certificate of compliance and further must provide (to the party giving out the work) a statutory declaration which has the following elements: a) the statutory declaration must be required to affirm that the contents of the declaration are true and correct; b) the statutory declaration must also be required to affirm that the certificate of compliance covers all activity of the subcontractor c); the party receiving the work must agree to provide information (to the party giving out the work) on all further subcontracting (on demand of the party giving out work); and d) whether the party receiving the work is insured for workers’ compensation. In addition, the party giving out the work must affirm that they have examined the documents relating to parties further down the contracting chain (such as the statutory declarations provided by the party that receives the work) and the principal contractor believes the contents of those documents to be reasonable. If those documents (such as the required statutory declaration) are not (on their face) complete, then there should be an on the spot fine imposed on the party giving out work. In particular, such a fine should be imposed if the documents (such as the required statutory declaration provided by the party receiving the work) are not available, complete and onsite at the premises of the principal contractor. Further, if those documents are not (on their face) complete, an effective remedy should be imposed analogous to a prohibition notice whereby the parties receiving the work are compelled to cease working on the work provided (by the original party) until workers’ compensation coverage is proven in relation to each person performing that work (even if the person is not working at the principal contractor’s premises). However, even if the documents provided by the party receiving the work are apparently complete on their face, there should be a further series of remedies that apply if the documents provided to the party giving out work are not reasonable. Where the contents of those documents are unreasonable, an investigation should occur in relation to accuracy of the contents of the documents (such as the declared wage totals). If that investigation discloses inaccuracies in the contents of the documents provided, the principal contractor should be fined (and preferably pays a multiple of the workers’ compensation premium such as the double rate WorkCover now imposes) and the subcontractor should also be fined. The 351 --
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principal contractor should be able to sue intervening parties in the contract chain to recover fine moneys from down the chain. This proposed system would for the first time use of the power of principal contractors (ie both commercial power and legal authority) to promote workers’ compensation compliance down through each succeeding level of the subcontracting chain. By contrast, in the current situation, principal contractors commercially benefit from non-compliance by the succeeding steps in the subcontracting chain. Ie at the present, those who supply work to principal contractors can supply at a cheaper price by failing to enforce workers’ compensation and OHS standards in their own work processes. So currently the principal contractors have a vested interest in non-compliance further down the subcontracting chain. But if the proposed system is introduced, the principal contractors face the prospect of losing these commercial benefits of non-compliance. For example, the performance of work given out by a principal contractor could be halted under this proposed regime. The consequent delay would eat into any profit benefits that the principal contractor derives from non-compliance by subcontractors. In addition, the principal contract would face further costs in the form of heavy penalties such as fines and multiple premium charges. Finally, this alternative must also create a tracking mechanism to enable enforcement authorities to track the flow of work down the chain of subcontracting. Currently, the principal contractor in NSW is faced with a potential legal liability for workers’ compensation non-compliance in relation to on-site workers working for succeeding parties down the subcontracting chain (see s20 NSW Workers’ Compensation Act). However, the problem faced by enforcement authorities in making this provision work is as follows: if WorkCover finds an on-site worker who has not been insured for workers’ compensation, how do they know the identity of the ultimate principal? With an appropriate tracking mechanism this would no longer be a problem. It is suggested that the proposed system can be simply and easily modified so that principal contractors do not just have the legal power to inquire into the details of further subcontracting. Instead the principal contractor should be required to make one specific inquiry ie the supplier of work to the principal subcontractor must be obliged to inform the principal contractor every three months about the name and address of all parties to whom the work (originally given out by the principal contractor) is further subcontracted. This same obligation would apply at each step of the subcontracting chain. Such a simple modification would create a trail that could be followed by the enforcement authorities in order to tie the identity of the principal contractor to the ultimate place of work. An additional element to be considered in the context of tracking mechanisms would be a simple requirement that the ABN identity of the principal contractor be included in each succeeding contract for the giving out of that work. What current policy considerations in NSW also highlight is that the issues of compliance and coverage are inextricably linked as far as changing work arrangements are concerned. Changing work arrangements are simultaneously reducing both the nominal and effective coverage of workers’ compensation regimes whilst also providing more ambiguous categories to tax the time of administrators and provide opportunities for both accidental and deliberate manipulation of eligibility, benefits (especially return to work) and workers’ compensation premiums (including outright evasion as well as fraudulent under-insurance). This provides an additional important argument for undertaking rather more substantial steps in terms of expanding coverage or rather re-covering workers who have been lost to the system by the shifting if not outright manipulation of legal categories. Expanding coverage, if undertaken carefully, can help address the compliance issue. 352 --
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11.5 Inter-jurisdictional Issues, Foreign and Illegal Workers In Chapter 5 reference was made to a series of inter-jurisdictional issues. With regard to the problems posed by the jurisdictional confusion that might arise from multi-employer worksites, ComCare noted that the agency had initiated an approach in the ACT of visiting such workplaces to explain both ACT WorkCover’s responsibilities as well as their own. A similar approach or other forms of collaboration may be of benefit in other jurisdictions although the logistical demands of undertaking this are liable to higher. 11.6 Return to Work/Rehabilitation As noted in Part 2 since the mid 1980s governments have given far more attention to facilitating return to work of injured workers. New initiatives continue to occur in this area. For example, in April 2002 Victoria launched a information campaign (including a CD Rom) in relation to new guidelines on risk management and return to work (to come into force in July) with the support of both employers and unions (Occupational Health News, 9 April 2002). As yet it is fair to say only limited attention has been given the impact of contingent work arrangements on these programs. The television advertisement accompanying the Victorian launch features a delivery boy called Rob who has injured his knee but is still eager to work. What the advertisement fails to contemplate is that many if not most delivery workers/couriers are outsourced/subcontractors, leased or temporary workers with a very limited prospect of getting alternative duties. The point is not that the Victorian initiative is not worthwhile but rather that it is hard to see how it will address the issue of more flexible work arrangements. As with OHS prevention, workers’ compensation agencies had begun to give attention to exploiting government contracting by putting additional conditions on those wanting to supply goods and services. In South Australia it was noted that discussions were occurring to extend the (now previous) government’s scheme to use government contracts to promote the employment of apprentices to include requirements regarding OHS performance and also the employment of injured workers (ie to demonstrate records of employing injured workers). This was also a factor in the urgency of measures to deal with the ‘third-party wrongdoer’ legislation (at least as far as workers under apprenticeship/group training schemes were concerned) referred elsewhere in this chapter and chapter 5. A number of initiatives to encourage return to work in the case of leased workers and those working for small business are discussed below. While these schemes appear to have considerable merit it seems fair to say that the growth of contingent work poses a considerable challenge to the development of effective return-to-work procedures – a problematic area at the best of times (and made worse when the high levels of unemployment and job insecurity weaken inducements employers might have to retain jobs/engage injured workers). When return to work fails the result is more costly claims, a lost of productivity and long-term claims on other sources of taxpayer funded support such as Medicare and social security. Another aspect that needs to be recognised here is that return to work needs to be assessed in relation to particular types of injury and illness, the incidence of which vary between industries. For example, some industries – like parts of manufacturing and construction – are responsible for a relatively higher level of permanent disability (WorkCover Corporation of South Australia, 1998). One consequence of this is that if, as seems reasonable to suggest, achieving a return to work is more difficult in relation to permanent disability (or at least 353 --
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many categories of this) then anything that reduces these prospects further – such as substantial use of subcontractors, leased and temporary workers - could impose a serious additional cost burden on the community (ignoring all the associated human suffering). If, as a growing number of studies suggest, these work arrangements also increase the incidence of injuries (including those leading to permanent disability) then the additional cost burden is magnified. There is no logic to allowing such cost externalisation to continue without penalty. One response might be to impose an additional premium charge on industries (or employers within that industry) that make extensive use of contingent workers and there is a significant resulting cost burden on the community. For example, the premium could be imposed on the industry with a rebate to those employers who can demonstrate that make little use of contingent work arrangements. It should be noted that Queensland has recently launched a major initiative on return to work that is targeting general practitioners (GPs), giving them up to date information on workplace rehabilitation. The impact, if any, of this strategy on return to work for contingent workers is unknown but the scope for integrating GPs into such a strategy may warrant investigation. Finally, it should be observed that the effectiveness of return to work is to some degree dependent on employment security provisions in workers' compensation legislation because these reinforce employer incentives to rehabilitate workers (as well as affecting scheme finances and equity). It may be added that the rigorous enforcement of such provisions is essential if employers are to treat more vulnerable groups of workers as anything but dispensable. Unfortunately, a recent survey of state and territory provisions on employment security (Purse, 2002) identified a number of deficiencies as well as an almost complete lack of enforcement. Purse urged that there was a need to revise existing requirements and also accompany this with serious and persuasive levels of enforcement. This proposal would seem to have considerable merit. The remainder of this chapter will turn its attention to workers’ compensation/rehabilitation initiatives in relation to specific work arrangements. 11.7 Initiatives in relation to specific work arrangements 11.7.1 Outsourcing/Subcontracting As noted in the general discussion section of this chapter, the workers’ compensation coverage of subcontractors has been given attention by a number of jurisdictions (such as the ACT). Efforts have also been made to improve employer awareness of coverage requirements, deeming provisions and the like in an effort to address premium evasion/understatement and enhance the prospects of injured workers who are deemed to be covered making a claim. Most jurisdictions appear to provide hard copy and on-line information on the issue of contractors and taking out workers' compensation cover. In NSW the issue is addressed under frequently asked questions on the WorkCover website. It is also incorporated in general information for employers. For example, a document/file entitled Workers' Compensation for Contractors and Subcontractors states: Anybody who operates a business and employs workers or engages contractors must obtain a workers' compensation insurance policy.
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All employers have legal liability to pay compensation to workers who are injured in the course of their work and employers are required by law to hold a workers' compensation insurance policy from a licensed WorkCover insurer to cover that potential liability. Who is a 'worker' for workers' compensation insurance purposes? The Workplace Injury Management and Workers' Compensation Act 1998 defines a worker to be: any person who works under a contract of service or apprenticeship with an employer, whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, or is oral or in writing,… For the purposes of workers compensation, a group of people may be 'deemed workers' are entitled to workers compensation benefits if injured, and the person or company who engages their services is obliged to provide workers' compensation insurance just as they would for a direct employee. These 'deemed workers' include: outworkers, salespersons, some contractors, some rural contractors, some timbergetters, jockeys, taxi drivers and ministers of religion. A business that engages contractors who are 'deemed to be workers' is considered to be 'an employer' even if the business has no direct employees. For information about the special provisions applying to other situations, contact the WorkCover Authority. It is not always necessary to conclusively determine whether a person is an 'employee' or a 'contractor'. In borderline cases, the person, even if a 'contractor', would be 'deemed' to be a worker for workers compensation purposes, under the provisions of the law. The law does not solely use a person's tax status to determine whether they are a 'worker', 'deemed worker' or contractor.
The document then spends a page and a half on points to distinguishing an employee from a contractor before turning to a series of related issues. This includes determining 'declared wages' for contractors who are deemed workers, requirements in relation to record keeping (and auditing by insurers) and penalties for uninsured employers. The document emphasises that a workers' compensation insurance policy is required even when there are no workers: Any person or company which operates a business and engages contractors should obtain and maintain a workers compensation policy. Even if the business does not have 'employees', and the contractors engaged appear not to be 'deemed' workers, the business still has a potential workers' compensation liability. A contractor, or a contractor's worker, may be found by the court to be a worker, and the employer of the contractor would be liable to pay compensation. A worker compensation policy operates to cover all workers and deemed workers whom the employer engages. It is not necessary to arrange separate cover for contractors.
Like their counterparts in prevention, a number of jurisdictions have begun to look at this issue of multi-tiered subcontracting and supply chains. For example, in recent years South Australia has built into self-insurers’ administrative fee (the exempt levy) a series of 355 --
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conditions on which they get a rebate, one of which is that the self-insurer will take a lead role in the community in seeing that their contractors and suppliers perform well. Agency staff believed this approach had already born ‘some fruit’ but was trying to extend its effect. The agency was in the process of examining the different geographic profiles of self-insurers. It was noted that, for example, manufacturers based in urban centres might use suppliers whose business was only partially dependent on that manufacturer whereas in regional centres the situation was more likely to be one of overwhelming dependence of suppliers on the principal contractor giving the latter very substantial commercial power or leverage. By why of illustration, reference was made to BHP Whyalla, which was seen to have an exemplary contractor management system. Another example cited was Western Mining Company at Roxby Downs (and there is evidence of similar controls being exercised over building contractors at Queensland mine sites. See Mayhew and Quinlan, 1997a). In a similar vein, where only a small number of large companies dominate an industry (such as with regard to automobile manufacturing) they can exert considerable combined influence on suppliers. It was argued that where firms chose to use this commercial leverage there was a measurable impact on the claims profile of suppliers. The strategy was to work with the self-insurers association to try and achieve this bridging at a broad level. Agency staff saw this approach as analogous to the community/town-based approach used in Canada. The South Australian agency was also currently looking at a five-year plan to build even stronger financial incentives into premium setting so as to affect the approach of large firms to their supply chains (ie via premium discounts). 11.7.2 Home-based Work, Telework and Telecall Centres With a few notable exceptions, clarifying the workers’ compensation entitlements of homebased workers and ensuring those covered receive their entitlements has not received much attention from workers’ compensation agencies in Australia. In its report to the ACT Government (2001:38), the Workers’ Compensation Monitoring Committee canvassed a number of options in relation to providing coverage for persons brought in to work in domestic situations (gardeners, baby-sitters, ironing, cleaning, meal preparation and aged care). It recommended that publicity be used to remind householders be of their obligations to take out cover on behalf of such workers although it recognised some form of compulsory charge may be necessary. In Victoria, agency staff made reference to a project currently running as to the workers’ compensation access of home-based workers engaged under multi-tiered subcontracting arrangement organised by several local government authorities. In South Australia, too, agency staff referred to the need to examine supply chains in terms of ensuring groups like home-based clothing workers received their entitlements when injured at work. This is, of course, the approach adopted in the ‘Behind the Label’ strategy in NSW that has been referred to elsewhere in this report. A senior officer in one jurisdiction described telecall centres as a ‘black hole’ in terms of workers’ compensation claims experience. Overall, with several exceptions (most notably the NSW ‘Behind the Label’ strategy), homebased work has been largely neglected in terms of the provision of workers’ compensation. In the chapter on OHS legislation extensive reference was made to a recent Canadian report on home-based work (Bernstein et al, 2000). In relation to workers’ compensation this report (Bernstein, 2000: 243-44) recommended that legislation should be modified to remove 356 --
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technical language that might be seen to exclude homeworkers and clarify provisions dealing with trans-border issues. The report also recommended that coverage provisions be amended to include self-employed individuals who work primarily for a single contractor, presume coverage unless it is demonstrated the individual is an independent contractor (and multiple contracts with employers or sharing work at home should not of itself exclude cover), eliminate exclusions pertaining to outworkers and undocumented workers (ie illegal immigrants) and allow independent contractors to take out voluntary cover. In keeping with the recommendation made in the earlier chapter on prevention it is urged that the report proposed to be prepared on home-based work cover workers’ compensation issues with a view to expanding effective coverage and devising practical means of securing a return to work for injured home-based workers. 11.7.3 Labour Hire/Labour Leasing In order to meet the problem of understated or manipulation of workers’ compensation premiums in association with labour leasing a number of jurisdictions, such as Queensland and South Australia, have established a specific range of premiums for the labour hire industry. The agencies have not used an identical approach to do this. South Australia set a limited set of WIC codes for labour hire and Queensland has a WIC code for each industry where labour hire is used. In Victoria all labour hire workers currently fall under two WIC codes (basically a blue collar code and a white collar code). This was seen as too crude and has been subject to some manipulation/abuse. Overall, the level of payments under both classifications was increasing rapidly but the agency was unsure as to whether revenue should be increasing even more rapidly (given the growth of labour leasing). At the time of interviews (ie December 2001) this premium-setting scheme was under review. In South Australia the three-tiered approach (with premiums rates set at 6, 2.5 and 0.9 depending on whether they came into risk category 1,2 or 3) was introduced in January 2002. Perhaps at least as important as the change in premium-rate, the agency has engaged in a major project to test compliance with the three new ratings. At the time of interview (January 2002) it was too early to judge the effects of this change (the testing project was only just being initiated). Nevertheless agency managers were of the view that the new premiums were affecting behaviour. Several noted that a significant self-insurer group to use labour hire firms were manufacturers and that an immediate effect of the change was that the premium for labour leased into these firms went up (to the maximum risk category rate of 6). The manager’s awareness of the impact of this arose when a number of manufacturers complained to him that the cost of leased labour had gone up (as labour hire firms passed on the cost of the higher premium). This change was seen to affect the claims experience of a number of industries – something entirely consistent with references to the distorting effects of labour hire/outsourcing in Chapter 5. The point was made that evidence of these effects highlighted the danger of simply examining/analysing claims data without reference to shifting patterns of labour usage at industry or workplace level. The view was also expressed that the additional premium cost had discouraged some firms to reduce use of leased labour. From the agency’s perspective, this simply meant that the cost of obtaining leased labour by manufacturers now more accurately reflected the risk exposure. Australian jurisdictions have not been alone in introducing labour hire specific premium ratings or ratings that reflect a higher risk for this activity. For example, in 1998 Germany the 357 --
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Berufsgenossenschaft adopted a higher premium for agency work based on ‘accident’ risk (Storrie, 2002: 52). Not all jurisdictions have followed or even considered the path of setting distinct premium ratings as yet although its fair to say that the tenor of concern expressed by agency staff in virtually every jurisdiction indicates that this or some other action is likely to be given serious consideration in the near future. Across a number of jurisdictions there is ongoing consideration about modifications to the systems just mentioned or the introduction of new systems, including expanding the number of generic labour hire WIC codes (say to 10 or 12) to enable better differentiation in relation to risk or to make the WIC code for labour hire the WIC code that applies to the workplace where that work is being undertaken. The advantage of the latter from a regulatory perspective was that it was seen to take labour hire out of the equation although it was recognised that labour hire firms were unlikely to appreciate the additional premiums/administrative burdens such a scheme would impose on them. Apart from dealing with problems of premium manipulation, the use of WIC codes specific to labour hire has enabled at least two jurisdictions (Victoria and South Australia) to analyse the claims experience of the industry in some detail. Some consideration has been given to differentiating the workers’ compensation responsibilities of labour hire firms. In its report to the ACT Government (2001:38-39), the Workers’ Compensation Monitoring Committee observed: Many labour hire companies advise their clients that they have provided workers’ compensation cover for the staff available to those companies. The cost of this cover is then built into the fees charged by the labour hire companies to their clients. However, where the role of the labour hire company is purely to bring two parties together, eg in casual arrangements, such as baby-sitters and gardeners, and the remuneration for the service is passed directly from the client to the service provider, then responsibility for workers’ compensation cover should rest with the client. …labour hire companies should be encouraged to advise household clients if there is a need to have a workers’ compensation policy in place.
At least one agency (a small jurisdiction) argued it had had a dichotomous experience in relation to labour hire firms. It was argued that some labour hire firms were highly resistant to paying workers’ compensation premiums while at the other extreme (and staff indicated there was no ‘middle ground’ group) were labour hire firms who accepted their responsibility and viewed the premiums as incentive for them to take steps to ensure that the host employers they dispatched workers to had adequate OHS management. Beyond differential premium setting another option would be to preclude cover altogether to labour leasing in high-risk settings (or to set premiums at such a level that labour leasing was strongly discouraged). As mentioned earlier, in the USA a number of private insurers have refused to provide worker’s compensation cover where labour is leased into particular industries. In an analogous move, in recent years insurers in the long haul trucking industry in Australia effectively refused comprehensive insurance cover to a number of trucking companies deemed to have unacceptable safety/claims records (Quinlan, 2001). When this issue was raised with workers’ compensation agencies the general response (including those who were monopoly insurers) was that this was not a policy option available to them due to mandatory nature of workers’ compensation cover. Due to logistical constraints the project 358 --
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team were unable to speak to enough private workers’ compensation insurance providers to get a meaningful response (several were spoken to in the course of IRG meetings). However, one area where there may be an effect is in relation to public liability. WorkCover Corporation of South Australia officers suggested that the issue of public liability exposure of self-insurers (discussed in Chapter 5) was having an effect on behaviour both these and labour hire firms as they began ‘to feel the effects of liability.’ It was noted that some insurers had refused public liability cover to employers using leased labour. Responses to the ‘third party wrongdoer’ issue were currently under consideration. They also believed the public liability issue was impacting on labour leasing arrangements in other countries but this aspect could not be explored within the confines of this project. In sum, to address the considerable premium understatement/manipulation problems in relation to labour hire there would seem to be strong case for setting a dedicated set of premium-ratings for labour hire or in other ways modifying premium-rating so that premiums for leased workers more accurately reflected risk exposure and were difficult if not impossible to manipulate. Of course, the foregoing presumes worker coverage or eligibility is not an issue. As noted in other parts of the this report in some instances labour hire workers may be self-employed, and unless addressed under the definition of worker/deeming provisions, exempt from workers’ compensation coverage. While investigation for this report identified a number of instances where labour hire firms had configured themselves and their contractual arrangements to avoid their worker’s being designated as their employees as yet this was not as major concern of workers’ compensation agencies. Nevertheless, several saw it as a potentially serious problem and given that it avoids coverage altogether (rather than being a dispute as to who is the employer) this aspect may warrant further attention. Leaving the last issue to one side, there is still the question of achieving a return to work for labour hire workers. In South Australia, agency staff argued that they have been able to use the higher level of self-insurance to address this issue in part by developing the principle that it was condition of self-insurance for the self-insurer to ensure that labour hire workers injured on their premises could participate in rehabilitation. This was also seen to have the potential to cause employers to think more carefully about the long-term consequence of entering into labour leasing arrangements although managers believed short-term exigencies still dominated these decisions. In addition, agency staff members were working with the labour hire industry to improve rehabilitation and return to work via the Labour Hire Industry OHS Working Party established under the WorkCover Corporation’s SAfer Industries Program. As part of this new injury management guidelines had been produced to help labour hire firms to identify their legal requirements for injury management and rehabilitation, provide practical strategies for managing injured workers and the issues that may arise, explaining the steps in injury management and rehabilitation, and including pro-forma documents to assist firms develop their own systems (WorkCover Corporation, 2001g). The guide tries to address common problems, including those in relation to securing a return to work. With regard to difficulties getting a placement the guide recommends that labour hire firms should negotiate a clause in their contracts stating that if a worker is injured in that host’s premises the host will be responsible for providing suitable modified duties. It is also recommended that the labour hire firm liaise with the host regarding suitable duties. Alternative solutions suggested include marketing the worker to new organisations at a competitive rate and providing duties 359 --
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in the labour hire firm’s own office (WorkCover Corporation 2001: 31). The guide further recommends that the labour hire firm and its Claims Agent (an insurance agent contracted to WorkCover) closely monitor the rehabilitation of the injured worker and make up a suitable duties list (a document to assist with this is included in the guide). To establish a close working relationship with host employers the guide recommends a series of strategies including negotiating contract provisions on rehabilitation prior to placement, explaining the benefits of rehabilitation (more stable workforce, less training costs), and supplying injured workers at a discounted rate. Other recommended steps include having their preferred medical provider visit the worksite to gain a better understanding of the available duties and emphasising the moral obligation host employers to assist labour hire workers injured at their worksite. Finally, the guide notes that it is a legislative requirement for the labour hire firm to provide suitable duties where this is reasonably practicable (WorkCover Corporation, 2001: 32). Overall, this guide provides a deal of practical advice mixed with relatively gentle persuasion. The recent nature of this development means it is too early to judge its effectiveness although, given the problems identified elsewhere in the report, the concern would be that somewhat more powerful incentives might be necessary. 11.7.4 Casual, Temporary and Itinerant Workers As noted above, a primary factor in a number of jurisdictions targeting under-insurance has been in response to the scope for employers to understate their workforce by using temporary workers. Less attention has been given to ensuring temporary workers are aware of their entitlements and can access these free from prejudicial influence from unscrupulous employers. However, some initiatives have been undertaken such as the provision of OHS and workers’ compensation information to school leavers in South Australia. As with their prevention counterparts, with the exception of labour leasing the compensation and rehabilitation problems posed by temporary workers have largely been overlooked by workers’ compensation agencies. While these workers are all covered by workers’ compensation the data sets kept by most agencies do not allow them to identify any differences permanent and temporary workers in the frequency, length, cost or handling of claims. As was proved in the case of labour leasing, such information is likely to prove vital to more effective policy interventions. Of course, this is predicated on the development of reliable data and, as indicated earlier, most if not all jurisdictions appear conscious of problems in this area (such as the recording of return to work status). 11.7.5 Part-time work and Multiple Jobholding As in other areas, part-time work evinced little interest from jurisdictions and this report could identify no special initiatives under way in this area. WorkCover NSW does collect data on claims experience that differentiates full-time and part-time applicants (see Chapter 3) that suggests the worker’s claims rate amongst part-time workers appears very low (when roughly measured against both the overall and industry specific proportion of the workforce engaged in part-time work. The explanation for this may be that the incidence of part-time workers is conspicuously lower than for full-time workers, that this reflects the lower level of hours and therefore risk exposure of part-time workers, that there are recording errors in the data or there is significant under-reporting of injury. These explanations are not mutually exclusive and there is evidence to support several (such as ABS evidence on under-reporting/claiming 360 --
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by part-time workers referred to elsewhere in this report). Multiple holding also evinced relatively little concern from a workers’ compensation perspective although certain industries were seen to pose more problems here. Most agencies indicated they reviewed individual claims where this might be a complicating factor but had not developed programs in this area. As noted elsewhere in this report, labour leasing provides opportunities for workers engaging in multiple jobs, including those in industries such as rail freight where this might have catastrophic consequences. A closer evaluation of the NSW data on claims by part-time workers (including testing the four explanations posited) as well as multiple jobholding in high-risk industries (or fatigue effects might pose serious risks) would seem to be a worthwhile investment in better claims management. 11.7.6 Downsizing/restructuring and job insecurity As noted in earlier chapters, a number of jurisdictions had identified (either anecdotally or through investigation of the claims experience of particular employers) a connection between downsizing/restructuring by organisations and an increase in workers’ compensation claims. While consideration was being given to this information, or obtaining further data, in a number of jurisdictions at the time of interviews for this project no specific proposals or interventions were identified. It is understood the WorkCover NSW has commissioned an investigation into downsizing. This appears to be a very worthwhile project. One aspect that may be worthy of including in this project is consideration of the impact of WorkCover claim histories in the selection of workers for redundancies. There have been a number of allegations that these records have been used to target workers for retrenchment (see for example a claim by seven workers in Smith and Others v Moore Paragon Australia Ltd, [2001] and Occupational Health News Issue 503 14 November 2001: 4) that, while as yet unsubstantiated, would (if confirmed) raise serious concerns in terms of both claims management and worker entitlements. 11.7.7 Small Business In chapter 5 references was made to a number of issues in connection with small business, notably a higher rate of failure to take out workers’ compensation policies and greater difficulties in relation to achieving favourable return-to-work outcomes. As in the area of prevention a number of jurisdictions have produced guidance material on injury management and rehabilitation. In some cases like NSW and the ACT this information has been included as part of a general guide for small business that deals with both prevention and workers' compensation matters. Other jurisdictions (see for example WorkCover Western Australia, 2000) have produced detailed stand-alone guides for small business on injury management and workers' compensation (including injury notification and management, rehabilitation and even premium setting). In relation to the non-insurance cover issue several points can be made. The recent review of compliance in NSW by Le Couteur and Warren (2002: ix) argued ignorance was a significant reason for non-compliance amongst small business and for this reason, as well as the implications of reforms they proposed, recommended the WorkCover NSW should embark on an education campaign. At the same time, as noted elsewhere in some industries such as construction and clothing outwork non-compliance appears systemic and this was also the view of the vast majority of regulators spoken to. In other words, interventions in relation to 361 --
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small business need to recognise a mixture of ignorance and calculation on the part of small business operators that may vary between industries and require specifically targeted interventions. One agency argued that although small firms made up a disproportionate number of employers it detected as having failed to take out workers’ compensation insurance cover small business were also responsible for a less than proportionate number of claims. It argued that, from a strategic perspective, the allocation scarce resources to non-compliance needed to be marry both the extent of evasion and the level of risk as evidenced by claims experience. In general, agencies have targeted industries where distinguished by a high level of noncompliance and claims and it just so happens that small business are especially prevalent in a number if not most of these (such as building, taxis, trucking and fishing). Without questioning the focus on these industries it needs to be noted that there may be other areas deserving of attention once reporting effects referred to elsewhere in this report are considered. Certainly, a clear majority of studies of small business (most using other data sources) have found their OHS performance is actually inferior to large firms (see Chapter Two and Appendix). The targeting of small business generally may not be warranted. However, a broader approach that identifies industries where small business compliance is low and there are significant OHS problems (not simply workers’ compensation claims) could yield benefits in terms of coverage, prevention and worker entitlements. As already mentioned, return-to-work and rehabilitation can be a serious problem with regard to small business. When asked what measures they were undertaking to address access the rehabilitation problems relating to small business, workers’ compensation agencies referred to a number of initiatives, ranging from informal and formal policies through to those based on new legislative requirements. In South Australia where (as mentioned in Chapter 5) there was a strong legislative focus on return to work there was an incentive for small employers to take back workers in the sense that that the expected employment period (one year) was only half that applying to larger employers. During interviews it was noted that a review was currently under way in relation to the legislation and the operations of the small business unit and one of the three objectives of this was to look at alternative employers for other than host employers or pre-injury employers (ie small business). Like several other jurisdictions, trying to provide return to work opportunities via a pool of employers was one of the options being considered. Another example of legislative requirements was in the ACT where the agency was trying to foster synergies amongst different employers by facilitating small firms forming groups to provide injury management services and to create a pool of opportunities for injured workers. As with a number of other changes already mentioned, this had been recommended by the Workers’ Compensation Monitoring Committee (ACT Government, 2001:32) and was incorporated in new legislation to take effect from July 2002. The agency had asked the Chamber of Commerce to act as broker for these arrangements. Further, as in the Northern Territory scheme, the agency provided legislative assurance that the new host employer would not take on responsibility for the existing injury problems (ie a ‘second injury’ scheme), making the scheme more attractive to prospective employers. Again, this followed a recommendation of the report of Workers’ Compensation Monitoring Committee (ACT Government, 2001:32-33). The new legislation contained other requirements in relation to injury management and rehabilitation. Since the previous legislation contained no-injury 362 --
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management regime at all this development was viewed as representing an abrupt shift towards ‘best practice’. Another initiative used in several jurisdictions is to provide even more direct incentives (in terms of wage subsidies) to encourage employers to take on workers displaced from their original job as a result of injury. At least one jurisdiction indicated that industry agents were exploring other incentives. Of course, the use of subsidies though perhaps justified on grounds of cost effectiveness and return to work objectives effectively represents an externality in that the state has taken over a cost that could not otherwise be internalised to the employer. The problem is that the shift to flexible work arrangements is almost certain to increase the situations where state agencies must intervene, representing both a logistical and financial burden. 11.7.8 Voluntary and Other Special Category Workers As noted in Chapter 5, the entitlements of some categories of volunteer workers to workers’ compensation are either ambiguous or partial. The notable exception were emergency service workers where coverage was seen to be clear and agencies in a number of jurisdictions saw this as a significant factor in promoting a more responsible approach to managing the risks these workers encountered. Indeed, there was an argument here for expanding or clarifying the coverage of other groups of voluntary workers. Another potential financial incentive was where state legislation made incorporated bodies vicariously liable for the actions of their volunteers (as in South Australia where a education campaign was running in tandem with recent legislative changes to achieve this). Although the situation of voluntary emergency and rescue workers has not been seen as especially problematic a number of jurisdictions, including NSW, have introduced additional measures. In NSW the Workers Compensation (Bush Fire, Emergency and Rescue Services) Act 1987 gives coverage to persons duly appointed under the State Emergency Services Act 1989, an executive member of the NSW Volunteer Rescue Association and a surf life saver appointed, elected or affiliated to Surf Life Saving NSW (WorkCover NSW 2002c). In 2002 a new regulation, the Workers Compensation (Bush Fire, Emergency and Rescue Services) Regulation 2002, was proposed that would expand the classes of members to include: • •
duly enrolled members of auxiliaries formed in accordance with the State Emergency Services Regulation 1991 (which has been replaced by the State Emergency Regulation 2001). additional persons by reference to a list of rescue squads (all of which are volunteer associations affiliated with the NSW Volunteer Rescue Association Inc. WorkCover NSW 2002: 2)
Another proposed regulation, the Workers Compensation (Workplace Injury Management) Regulation 2002 (WorkCover NSW 2002d) builds on the just mentioned regulation and gives effect to Chapter 3 Injury Management of the 1998 Act. It modifies provisions applying to self-insurers, imposes an obligation on employers to establish a return to work program for injured workers (to be made available to relevant parties), the appointment and functions of return to work co-ordinators and offences/penalties for failure to comply with these provisions. In essence, it requires insurers and employers of emergency and rescue workers to comply with injury management and return to work plans and establishes an accreditation 363 --
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process for those providing return to work support under the employer’s return to work program. As part of its report on workers’ compensation in ACT, the Workers’ Compensation Monitoring Committee (ACT Government, 2001:10) recommended that: That the definition of a worker be extended to include certain types of community safety and similar community support work.
In Victoria, agency staff noted that s138 of the workers’ compensation Act gives the Authority power to seek contributions from negligent third parties and this had been used regularly, mostly against host firms when apprentices or trainees in group training schemes (their employer) were injured due to the host’s negligence. It should be noted that in some jurisdictions there is a separate WIC code for prostitutes. Overall, the situation with regard to groups of voluntary workers other than those in the emergency and rescue sector remains ambiguous, especially in practice. 11.8 Conclusion Thus far, workers’ compensation authorities have only begun to address the burgeoning coverage issue created by changing employment arrangements. As this report has tried to indicate, while it might seem that workers’ compensation agencies could serve their own interests by ignoring coverage issue there are a number of serious costs which impact on these agencies (such as additional administrative costs) and, more importantly perhaps, serious flow-on costs to the community of ‘vacating the field’. Thus far, the action taken has been overwhelmingly directed at the issue of formal coverage. A majority of agencies also saw value in at least considering a more consistent set of definitions of ‘worker’ under different bodies of legislation (ie industrial relations, OHS, workers’ compensation and taxation). A broader and more consistent definition would seem to restrict the scope both for confusion and deliberate manipulation of existing legal categories. While the issue of coverage is being examined, the effective take-up of workers’ compensation entitlements by contingent workers has been largely ignored even though evidence presented in this report indicates this affects at least as many workers (and probably many more). Again, there are strong grounds for addressing this issue, not the least of which is to ensure that all injured workers receive their legal entitlements. Other arguments include the need to avoid making the evasion of minimum OHS standards (standards that the community is likely to regard as entirely reasonable) a basis for business competition and to avoid the risk of cascading effects where the failure to provide coverage (formal or effectively) to one group of workers induces pressure for similar ‘discounts’ amongst other workers in the same industry. Further, the report identified serious economic externalities from such a shift in worker entitlements that demand recognition and attention. In terms of assisting some groups of workers such as home-based workers and those working under elaborate multi-tiered subcontracting arrangements references was made to a number of remedies. First, improving the level/quality of information available to groups likely to lack knowledge of their entitlements and how to proceed with a claim. In general, despite some potentially positive initiatives more needs to be done in this area. Building on information provision through third parties with contacts with such workers such as Workers’ Health 364 --
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Centres, Women’s Health Centres and Ethnic Community groups (in a way analogous to some community support structures operating in Ontario Canada) are worthy of consideration. Second, targeting elaborate supply chain arrangements that appear to entail deliberate regulatory evasion. Initiatives in this area are in their early stages but that being developed in the clothing industry in NSW may provide a model for other industries with similar problems. The supply chain focus can be used both in terms of access to workers’ compensation as well as creating incentives to counteract the weakening of conventional return to work processes that has been associated with some work arrangements (such as labour leasing). Third, better targeting non-insurance/under-insurance to minimise instances where information on entitlements or making a claim is discouraged. A number of agencies are using increasingly sophisticated enforcement strategies in this area but better targeting of specific industries and work arrangements where these practices are common (but which have been neglected in the past such as road transport) would be of benefit. In terms of dealing with the issues of both formal coverage and actual claims behaviour as well various forms of cost shifting another possible solution would be a comprehensive insurance persons from injury and illness whether they are at work or not along the lines of the New Zealand accident compensation scheme. Several regulators raised this possibility though it was not really pursued as an option by those responsible for workers’ compensation (probably for a number of entirely understandable reasons). This chapter also identified a number of positive developments in terms of improving injury management/rehabilitation with direct relevance to changing employment relationships. A number of these (including the setting of specific premiums for labour leasing firms or changes to injury management requirements affecting small business) have been driven by formal changes to internal rules or legislation. This approach was justified on the basis that while there were exemplary or ‘good practice’ employers there was a need to generalise behavioural requirements and establish a level playing field so that more responsible employers did not experience a competitive disadvantage. At the same time, staff from a number of agencies (such as the ACT) stressed the importance of seeking industry collaboration and assistance as an essential component of effectively implementing new regulatory solutions.
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Chapter 12 Voluntary employer/industry initiatives 12.1 Introduction In contrast to the question of prevention, few employers made reference to particular initiatives in this area and logistical constraints on the project prevented further interviews or a more thorough search for documents. With this caveat, it still appears that in contrast to at least some areas of prevention, activities by employers to adapt their workers’ compensation and rehabilitation/return to work practices to take account of changing work practices are relatively rare. The obvious exception is labour hire (discussed below). As the next chapter will show, much the same response applies to unions. 12.2 Outsourcing/Subcontracting No employer or employer association representative interviewed for this project expressed an opinion in relation to any special measures being undertaken with regard to home-based workers, teleworkers or those in telecall centres in terms of information provision or the handling of workers compensation claims. 12.3 Home-based Work, Telework and Telecall Centres As with the last category, no employer or employer association representative expressed an opinion in relation to any special measures being undertaken with regard to home-based workers, teleworkers or those in telecall centres in terms of information provision or the handling of workers compensation claims. 12.4 Labour Hire/Labour Leasing From the host employer perspective, few employers or employer/industry association representatives spoken to expressed much concern in relation to workers’ compensation issues and this is hardly surprising given that the labour hire firm takes on this responsibility (though note the third party liability issue discussed in the previous chapter). With regard to the mining the industry, the use of more specialist labour hire operators was also seen to prevent a number of potential problems. As one OHS manager observed: A lot of our labour hire, particularly for production issues come from the industry originally so we have access to their (claims) history and the two labour hire firms I know we use do a reasonably good job of checking their history… We have at times had some minor rehab issues – whose responsibility is it to care for this person injured elsewhere or even individual sites and so you take on the same responsibility as for your own employees.
This report was unable to fully canvass labour hire industry views on the move to setting specific premium rates for the industry. Understandably, amongst those that did express a view there was concern that a single premium rate would entail problems for a labour hire firm that leased a wide array of different categories of labour into equally diverse industries 366 --
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and workplaces. The fear was it expressed that this could make the firm uncompetitive in supplying some types of labour while, possibly, giving it a competitive advantage elsewhere. It was suggested that where jurisdictions had introduced a limited set of labour hire premium categories (such as three in the case of South Australia) companies providing a diversity of labour might respond by splitting into a similar number of specialist companies to avoid being hit by an ‘average’ rate. That WorkCover might move to pre-empt such corporate splitting (as raised by the recent green paper see WorkCover NSW 2001d) was acknowledged, with the proffered response being that the labour hire firm would specialise in those areas where it could remain competitive. While these views may not fully comprehend the actual effects of separate premium setting they should be taken into account if NSW moved to follow the example of other jurisdictions in adopting labour hire-specific premiums. On a positive note, some within the labour hire industry indicated that the current rationalisation occurring within the insurance industry might of itself resolve the problems posed by hold harmless contracts. Referring to the US experience one labour hire company manager observed: Hold harmless contracts are an interesting phenomenon. I suspect the insurance industry will probably eliminate them. I am aware that there are a number of similar types of contract in the US and the story in the US is that, five years ago there 200 suppliers of workers’ compensation to the industry now there’s four. There’s tremendous rationalization and once you get that rationalization competitive forces will say this is a silly insurance we not going to do that anymore
12.5 Casual, Temporary and Itinerant Workers As noted earlier in this report, a number of employers interviewed in the course of this project identified a problem in relation to engaging temporary workers who, after being injured on the job, became long-term workers’ compensation claimants. If this view is widespread it may provide an incentive for using leased workers in preference to directly hired temporary workers. During the admittedly small number of interviews with individual employers none indicated that had introduced special measures either to address this, to ensure that temporary workers were conversant with their entitlements or provide targeted return to work programs. 12.6 Part-time work and Multiple Jobholding The main issue of concern for employers with regard to multiple jobholding was where it complicated workers’ compensation claims. While it was recognised the workers’ compensation systems had established clear principles on claims employers associations were aware of problems where dual employment was widespread. However, such problems were generally seen as isolated to particular industries where employment was heavily casualised such as hospitality and meatworks. 12.7 Downsizing/restructuring and job insecurity No employer or employer association representative interviewed for this project expressed an opinion in relation to any special measures being undertaken with regard to home-based workers, teleworkers or those in telecall centres in terms of information provision or the handling of workers compensation claims. A number did mention that these changes had led to an increase in claims, which was seen as both a response to impending job loss and also as 367 --
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an effect on worker health and wellbeing as a result of poorly managed restructuring. It is possible that some employers have modified their claims handling practices as result but this could not be investigated. 12.8 Conclusion As noted at the outset of this chapter, the limited number of interviews (and associated documentary searches) able to be completed within the logistical confines of this project revealed little information about voluntary initiatives by employers in relation to workers’ compensation. At one level, the clear impression gained was that employers are less likely to have responded to any effects of changed work arrangements on workers’ compensation claims handling than has been the case in relation to prevention issues. If confirmed, this has implications for workers’ compensation agencies (and insurers). At the same time, there is probably a need for further investigation of employer practices. In the one area where voluntary measures were identified, namely labour hire, it is fair to say that the balance of opinion amongst all those interviewed was that these efforts appear to have had modest effects at best.
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Chapter 13 Union sponsored or endorsed initiatives 13.1 Introduction In Australia unions have played a significant though often unrecognised role in providing information to workers on their workers’ compensation entitlements as well as providing the support for them (legal advice etc) pursing claims or suing employers for negligence (where this option is available). In attempting to represent contingent workers they have encountered a number of difficulties, not least of which has been the low levels of union membership amongst many of these groups of workers. As noted in Chapter 11, in Canada (or more precisely Ontario) unions have been able to provide representation to contingent workers through community-based clinics and this option is worthy of serious consideration here. As with employers, given logistical constraints, it was impossible to fully explore union activities with regard to the provision of workers’ compensation and rehabilitation of contingent workers. However, one general point worthy of note was in relation to the value of workers’ compensation data – an issue also raised by both regulators and employers. In a number of jurisdictions union representatives expressed reservations about the reliability of existing data, given omissions in coverage (with regard to self-employed subcontractors and the like) and what they saw to be serious problems of non-reporting. In at least two jurisdictions unions had raised the issue with regulatory agencies and government. At the same, some still saw value in compensation data for both prevention and compensation/rehabilitation purposes. When union representatives were asked whether having workers compensation data broken down by employment status (notably permanent or casual/temporary/fixed term; part-time or full time; leased labour and non-leased labour) the answer was an emphatic yes (across all jurisdictions where union representatives were interviewed). As noted in the previous chapter, some employer association representatives also desired more detailed breakdowns of workers’ compensation data. While insurers were not interviewed for this project it is likely that they would have a similar view, especially where (as in the US) employment status might be seen to affect claims experience. Another potentially important union initiative in NSW and other jurisdictions has been to lobby governments to take account of contingent work arrangements by expanding and clarifying coverage provisions under workers’ compensation legislation by altering the general definition of ‘worker’ or amending deeming provisions that modify this definition for the purposes of the Act. Unions have also pressed for more resources to be devoted to implementing existing provisions. More recently, unions in NSW have sought other reforms to workers compensation legislation (such as the introduction of tracking mechanisms to deal with multi-tiered subcontracting arrangements) as part of a current review of compliance arrangements under the workers compensation scheme. As this review is still under way and has been discussed elsewhere in the report further details will not be repeated here. Turning to specific work arrangements a number of observations can be made.
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13.2 Outsourcing/Subcontracting The absence of comprehensive workers’ compensation coverage in industry with significant numbers of self-employed subcontractors such as building and construction is a source of concern to unions international. The International Federation of Building and Woodworkers (Murie, 2002) has call for ‘compulsory employers’ liability insurance to cover all workers on site.’ 13.3 Home-based Work, Telework and Telecall Centres In the area of home-based work union efforts to enhance worker access and entitlements has taken two forms. First, an attempt to expand, clarify or have implemented deeming provisions under workers’ compensation legislation. Second, in relation to clothing outworkers the TCFUA has run a sustained campaign of pressing for regulatory reform that would enable workers to access these and other entitlements. The strategy is presently being implemented in NSW and the union is attempting to extend the reach of this to other jurisdictions. As this strategy is described in some detail elsewhere in the report it will not be repeated here. 13.4 Labour Hire/Labour Leasing As noted elsewhere in this report, unions such as the Construction Division of the NSW CFMEU have raised a range of concerns about the manipulation of workers’ compensation premiums and the implications this might have for workers accessing their entitlements. In the case of the CFMEU these matters were referred to WorkCover. 13.5 Casual, Temporary and Itinerant Workers Given the generally low union membership levels of temporary workers it is difficult for unions to take action on behalf of their workers’ compensation entitlements. A number of unions indicated that they believed that temporary and itinerant workers were especially susceptible to forms of premium manipulation (by not being declared in the wages bill) or claims manipulation (pressure to not make a claim or to use sick pay or Medicare). In some cases these issues were raised with workers’ compensation agencies (who as noted in previous chapters are not unaware of these issues). 13.6 Part-time work and Multiple Jobholding In the course of interviews the issues of workers’ compensation access and entitlements for permanent part-time workers and multiple jobholders was not raised by union representatives. 13.7 Downsizing/restructuring and job insecurity As noted earlier, union representatives saw downsizing as a problem both by contributing to an deterioration in OHS and, via its effect on job security, discouraging workers from making workers’ compensation claims. At the same time, they did not mention any initiatives to address the latter problem.
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13.8 Small Business In the course of interviews, the issue of workers’ compensation access and entitlements of workers in small business was not raised by union representatives, except with regard to expressing concerns about illegal employment practices (such as ‘trial employees’) underreporting and the suppression of claims. No specific proposals were made although presumably workplace health and safety advisers or roving HSRs they proposed (see chapter 9) could circulate information on workers’ compensation in addition to their prevention activities. 13.9 Volunteers and Other Special Category Workers In Chapter 5 it was noted that while illegal immigrant workers were generally entitled to workers’ compensation fear of exposure and dismissal inhibited their willingness to pursue these matters. A number of unions, such as the CFMEU, have tried to address this issue by both publicising rorts (such as the introduction of workers under tourist visas) and lobbying for action by the Department of Immigration as well as taking action on behalf of individual workers. In one case (Thomas, 2002: 9) the CFMEU took action on behalf of Korean tiler (part of a group of 40 allegedly brought out under tourist visas who had their passports confiscated by the employer and were paid half the award rate) who fell from a ladder an incurred $15,000 in medical bills. The union alleged that the employer told the worker to leave the country or he would be arrested but that it was able to intervene and obtain compensation after being contacted by community group. The project was informed of a number of similar cases but was, given logistical constraints, unable to determine precisely how many such cases unions pursue or the impact of this on employer behaviour. Since many of these workers will be unaware of the entitlements, afraid of authorities and not union members unions face a real difficulty in representing them. This provides further support for community-based information/support networks on workers’ compensation (see Chapter 11) although it also raises issues about the federal government’s need to tighten the misuse of short-term and tourist visas, including the activities of some employers that could clearly be discouraged were efforts to be spent on detecting, prosecuting and imposing substantial financial or other penalties on offenders. 13.10 Conclusion With several conspicuous exceptions, union efforts to improve the access of contingent workers to workers’ compensation and return to work programs appear to have been minimal. Unions have raised a number of concerns during interviews (including the vulnerability of insecure workers to pressure not to make claims, to take sick pay or to use Medicare) but it was not always clear whether the matter had been referred to workers’ compensation agencies. As unions themselves acknowledged, these activities are not necessarily new although their contention was that workers holding insecure or temporary jobs, or whose access to workers’ compensation is ambiguous, are more susceptible to such pressures and as a result of recent trends the size of this group is growing.
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Chapter 14 Worker entitlements At present evidence suggests there are serious impediments to some groups of contingent workers accessing their entitlements in NSW and other Australian jurisdictions. First, changing employment arrangements are associated with more frequent changes of job, occupation, workplace and employment status as well as increases in multiple-job holding. As was noted, where workers (often though not exclusively part-time) hold multiple jobs simultaneously, where they work from home or where they hold a succession of jobs, even relatively uncomplicated trauma-based claims can be problematic. With regard to exposure to hazardous substances, the problems for contingent workers with complex job histories will be manifestly greater given the difficulties workers’ compensation systems already have in addressing occupational disease. Given the proliferation of potentially hazardous substances in industrialised societies, the potential significance of this issue should not be underestimated. Indeed, even job changes where the worker remains in the same industry, the hazardous substance is well-known and the worker’s disease/illness can be clearly ascribed to exposure to that substance at work – all by no means typical of work-related disease - become problematic in the sense of identifying the specific employer responsible for the exposure. Indeed, this scenario is being played out in the United Kingdom at the moment as the House of Lords reviews a Court of Appeal ruling in December 2001 that workers suffering mesothelioma as a result of exposure to asbestos and who worked for more than one employer could not claim compensation as they are unable to prove which company is at fault (ie the source of the ‘fatal fibre’ Financial Times 20 April 2002). Subsequently, the Law Lords agreed to hear appeals against the Court of Appeals ruling and criticised an 11th hour effort by insurers reach a settlement with the claimants, which would have pre-empted the House of Lords hearing and left the Court of Appeal judgement standing as a precedent (Financial Times, 23 April 2002 and APIL 2002). Irrespective of the outcome of the UK case, attributing exposures when workers changes jobs remains a potentially serious problem, especially in a labour market where such changes are more common. Further, the UK asbestos case dealt with generally less problematic issues of linking exposure to disease than is the case with other hazardous substances. Unlike most other diseases, the only known cause of mesothelioma (an invariably fatal cancer of the lung lining) is exposure to asbestos. In more typical situations where associations are more ambiguous (due to multiple potential causes and exposure points as well as the potential for combinant effects of exposure to multiple hazardous substances) the problems that arise from job changes are magnified. In many cases the worker may have long left the job/employer that is primarily responsible for their illness. In a recent case heard before the Supreme Court of Tasmania (State of Tasmania v Brett [2002]) concerned a worker who contracted a disease while engaged to an employer but was not incapacitated until after they had left. The employer argued that in the case of an injury being a disease there was no liability to pay workers' compensation under s3 (5) (which refers to the day on which an injury occurs). However, the Court ruled that s3 (5) did not govern the words in s25 "arising out of and in the course of employment" and found that liability attached where, regardless of the time it became incapacitating, the worker suffers from a disease to which employment contributed to 372 --
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a substantial degree. While a similar outcome could be expected in other jurisdictions the cases highlights a number of problematic issues that are relevance to the question of worker entitlements. Most notably, how exceptional are such cases given limited likelihood of workers holding contingent jobs being in a position to make disease-related workers' compensation claims? Further, given this do workers' compensation agencies need to take a more proactive role in facilitating such claims and how likely is this given the current costcontainment pressures on such agencies? Second, changing work arrangements are also affecting the capacity of workers to make workers’ compensation claims or to secure rehabilitation because they are formally excluded from mandatory cover and do not choose to take up a voluntary policy (as in the case of many self-employed workers) or they fail to exercise their rights to claim due to ignorance, loss of earnings or for fear of losing their job/diminishing future job prospects. An additional factor here is that contingent workers are far less likely to be unionised, denying them an alternative source of information and representation in workers’ compensation or common law proceedings. These problems are by no means unique to Australia and increasing reference to them can be found amongst policy makers, researchers, employment lawyers and others. For example, referring to the case of agency (labour pool) supplied manual day labour in the USA Rosenberg (no date: 6) states: Day laborers face similar obstacles in securing workers compensation. To qualify, the day laborer must show the law covers the type of injury and that the injury arose out of the course of employment. If the injury developed over time, such as a back injury, this will be difficult. Day laborers tend to work for many labor pools over a period of several months, going to numerous job sites. It is a common defense of the labor pools to claim that the injury did not occur during their employment, but while the worker was at another job. Similarly, many states exclude from coverage casual labor. If the worker is so classified, coverage will be denied.
The issue of worker entitlements has been discussed in some detail at various points by other chapters in this report. This chapter will bring these points together while making a number of further observations. One way of addressing this issue is to enhance the range of information sources to vulnerable groups of workers and also to sponsor bodies that can represent their interests. In Chapter 11 a number of other issues were raised that are relevant to worker entitlements. First, an effective expansion in coverage of workers’ compensation and measures to better clarify the ambiguous standing of some groups of workers would enhance worker entitlements. Second, measures designed to reduce the number of employers failing to take out workers’ compensation cover or engaging in various forms of premium manipulation would also benefit worker entitlements. Available evidence indicates these practices have a disproportionate effect on the rights of some contingent workers such as temporary workers, leased workers, subcontractors deemed as workers for the purposes of workers’ compensation legislation, immigrants (especially illegal immigrants and those on short term work visas), backpackers, and those in small business. It would reduce the incentive of some employers to discourage their employees to make a workers’ compensation claim and it would also remove the unfair competitive advantage some unscrupulous employers derive from avoiding or illegally minimising their obligation to pay workers’ compensation premiums.
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In terms of assisting workers with entitlements to make claims, unions have long performed an important role but in some countries at least (like the USA and Australia) contingent workers are far less likely to be unionised and thereby have access to this help. In some Canadian jurisdictions, like Ontario, occupational health or occupational health legal clinics (independent but partly funded by government) and the Office of Worker Adviser (or its equivalent government agency in other provinces) provide an additional source of advice to injured workers. The effectiveness of these or similar bodies in meeting the needs of contingent workers warrants careful consideration. Another issue worthy of consideration that was only fleetingly referred to in earlier chapters is the role of general practitioners. General practitioners are often the first port of call for a worker with an injury or illness arising from work and they often act as critical gatekeepers for the workers’ compensation system. In general, the level of education their receive with regard to recognising occupational disease and illness is very limited and this probably contributes to a significant under-recognition of work-related health problems (Bohle and Quinlan, 2000). At the same time, the situation is even more problematic in the case of some groups of contingent workers. A general practitioner is less likely to be able to make an occupational link to a disease with regard to workers who have complex employment histories or who change jobs or even occupations on a regular basis. It will also be more difficult for the worker themselves to suggest an association in the case of disease. There may be other reasons why general practitioners may be reluctant to find an association. For example in recent years occupational stress related workers’ compensation claims have emerged as highly contentious issue. On the one hand, concerns have been expressed by a range of parties, but especially unions, that downsizing/restructuring and other forms of work intensification have contributed to an increase in such claims. On the other hand, some employer groups have questioned the definition and extent of the problem while some workers’ compensation agencies appear to be seeking to curb claims in this area. Two Western Australian researchers of the Royal Australian College of General Practitioners conducted a study of 200 general practitioners (using s scenario based on a workplace restructuring). They found the general practitioners were reluctant to initiate work stress claims and that employer mistrust of such claims, and the risk of the worker being stigmatised, contributed to this (OHS Alert, May 2002 3(5): 1,11). Overall, there is little knowledge of how the activities of general practitioners affect the workers compensation claims of workers occupying contingent jobs or whose has been affected by restructuring. The issue requires further consideration.
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Part 4: Regulatory Collaboration and Other Measures
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Chapter 15 Regulatory Collaboration and Other Measures 15.1 Introduction While it is possible to identify a number of valuable measures on the part of regulatory agencies in Australia and elsewhere they do not amount to a comprehensive strategy for addressing these issues. First, most interventions only address one specific work arrangement, such as subcontracting, leaving other problematic arrangements like temporary employment untouched. Second, despite some promising developments there is as yet limited exchange of ideas and remedies between agencies at either the national or international level. Third, with some notable exceptions there has been little attempt at coordinated multi-agency strategies. 15.2 Coordinated Multi-Agency Strategies As this report has noted, in some industries at least – such as clothing and road transport – it is impossible to neatly disentangle OHS aspects of changing employment relationships from industrial relations issues because payment levels/systems or hours of work significantly contribute to OHS and workers’ compensation problems. In New South Wales recognition of this has resulted in a coordinated strategy on clothing outworkers and analogous ideas are under consideration in the long haul trucking industry. How far these connections extend to other industries is unknown but obviously where agencies discover a coincidence of industrial award/agreement evasion, OHS and workers’ compensation problems then collaborative interventions may prove far more effective. In one jurisdiction at least a meeting of representatives from agencies responsible for industrial relations, OHS and workers’ compensation have raised the prospect of database matching/information exchanges to identify ‘problem’ areas (such as where there was a coincidence of award evasion, underpayment of workers’ compensation premiums and OHS breaches) that could be targeted, and the possibility of joint inspections was also canvassed. One possibility for productive information sharing is the cross matching of workplace registration (where it exists) data or payroll tax data with workers’ compensation policy data, or compensation claims data with serious incident notification data to identify both inconsistencies and the simultaneous breach of a number of regulatory requirements. Further, where evasion appeared to be product of deliberate manipulation of legal forms there may be value in pursuing the scheme promoters such as law and accounting firms – a tactic used with some measure of success by the Australian Taxation Office. Of course the ATO has especially wide-ranging powers (although it needs to be said that a joint meeting of different agencies in one jurisdiction led to an interesting interchange about the powers of their respective inspectors, especially those responsible for workers’ compensation). That being said there is some mutuality of interest with the ATO on these issues (and even some evidence of overlap in terms of those promoting these schemes). The advantage of the latter, as with other top of ‘food chain’ strategies referred to elsewhere in the report, is that they enable the agency to concentrate its resources and energy at a smaller number of targets than trying to address the downstream effects. 376 --
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Another area of information sharing raised earlier in this report was where research by a workers’ compensation agency identified a correlation between restructuring and additional stress claims. This could provide the basis for the OHS prevention agency investigating the measures these employers took to manage OHS during the restructuring and its aftermath. An important caveat to greater sharing of information is the quality of the information to be shared. As this report has repeatedly observed there are serious deficiencies in workers’ compensation claims data that has implications for both prevention and workers’ compensation/rehabilitation. Therefore a critical development in terms of a more collaborative approach is to develop improved information sources. This should entail enhancing the existing workers’ compensation data set in terms of improving recording conventions and enabling the data to be interrogated in terms of employment status as well as addressing issues of reporting and coverage. At the same time, given the likelihood that some deficiencies cannot be remedied in a short time frame there is also a need to consider other data sources to complement workers’ compensation statistics. Two options already mentioned are the use of hospital admission data and undertaking a large workforce survey at regular intervals along the lines of that conducted in the European Union by the European Foundation for the Improvement in Living and Working Conditions. The latter would be especially useful in that it could be benchmarked against the results of the EU survey and the EU survey has been especially tuned to examine the OHS effects of changing work arrangements. An additional advantage is that the survey is being used to develop as part of the quality of working life benchmarking-tool. It would provide OHS agencies in Australia such as WorkCover NSW with the basis for an ongoing international dialogue on this and other issues. As part of the strategy of reviewing existing information sources it would be valuable to consider inventories of injury and health data sources and surveillance activities undertaken in Australia and other countries in recent years (for a Canadian review see Injury Surveillance Sub-Group, 2002). As should be clear from the last point, the issue of collaboration is not simply one of sharing information and efforts at co-ordination but also recognising that the resourcing of compliance in one area may have affects elsewhere. At several points reference was made to the connection between the maintenance or rather the evasion of minimum labour standards in some industries and OHS. Unfortunately, if evidence from various state industrial relations agencies to the recent trucking inquiry (Quinlan, 2001) is any guide enforcement of basic entitlements (wages, annual leave and the like) is not proactive but largely complaint-based. The limitations of this approach have been recognised in New South Wales that has adopted a more proactive approach to enforcement. Reinforcing this, the NSW Minister for Industrial Relations, John Della Bosca recently announced the appointment of 13 additional industrial relations inspectors. He noted: The Department will place greater emphasis on preventative activities, industry targeting campaigns, and will be better placed to provide improved access to expert assistance.
Another aspect of collaboration is with regard to agreed or complementary strategies or targeting. For example, at a number of points in this report reference has been made to the particular problems posed by multi-tiered subcontracting/elaborate supply chains. In the main, OHS agencies have demonstrated more awareness of this issue and have begun to develop remedies. However, multi-tiered subcontracting has also long presented problems in terms of ensuring workers’ compensation coverage, worker entitlements and countering non377 --
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insurance/under-insurance on the part of some employers. In some industries at least there are possibilities for a complementary supply chain focus on the part of OHS and workers’ compensation agencies and this has been explicitly recognised. Referring to a specific fiveyear project to address supply chains a senior workers’ compensation agency manager in one jurisdiction observed: …what we’re looking at now is the supply chains and that’s even going to get to the stage where its going to be affecting the larger employer’s premium. To gain maximum incentives with their premium they may need to go down their supply chain and ensure that their supply chain is promoting safe work practices. So this is the sort flexibility we’re looking for in premium charges…tying our entire premium system into an incentive scheme whereby you get a range of points to make up the magic 100 for a particular incentive off your premium. The bigger the employer the more the resources, the more intensive the commitment needs to be for promotion of safe work, OHS etc…Their choice of supplier and their ability to affect the work practices of their suppliers is a lot of cases a heck of a lot better than ours. So we’re using that influence. So you give them a discount of say 20% or 10% or whatever if their major suppliers have engaged in the same OHS program - that they have been included too.
Of course, to achieve this efforts must be made to ensure it does not simply result in further manipulation of workers’ compensation claims experience amongst supplies and a joint supply-chain approach with the prevention-side may be one way of achieving this (matching with incident reporting requirements, inspection records, payroll data, workplace registration and contractual tracking devices and the like). At the same time, this approach could be mutually reinforcing in achieving both OHS and workers’ compensation compliance objectives. Another area of co-ordination that has been raised at a number of places in this report and warrants serious consideration is the harmonisation of key definitions (worker, employer etc) under different bodies of legislation (industrial relations, OHS, workers’ compensation, payroll, income tax and superannuation) within and across jurisdictions. This option has been proposed by a recent report on workers’ compensation compliance prepared for the NSW government (Le Couteur and Warren, 2002). The option will require careful exploration to avoid any serious unintended consequences (such as a diminution of worker entitlements) or a lowest common denominator path to harmonisation that would effectively defeat the purpose of the exercise. Nevertheless, the report identified that definitional ambiguities were creating significant problems for OHS and worker’s compensation agencies (and industrial relations regulators too for that matter). The inconsistent definitions of key terms across different bodies of legislation promote confusion amongst different parties and, in some instances at least, appear to encourage outright manipulation that effectively defeats the intent of these laws. Finally, with regard to some industries there are grounds for not simply co-ordination of activity amongst a number of agencies but a fully integrated strategy. In two industries, clothing outwork and trucking, such an approach is already arguably under development. These developments are worth examining in a little detail.
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15.2.1 Clothing Outworkers: An Integrated Approach to Minimum Labour Standards, OHS and Workers’ Compensation Perhaps the first instance of an integrated approach to the problems of minimum labour standards, OHS and workers’ compensation is in the process of being developed by the NSW government to tackle the exploitation of clothing outworkers. The NSW Government’s strategy recognises that these problems (ie under-payment and long hours; increased risk of injury and occupational violence; and effective inability to access workers’ compensation) have common causes located in the structure of the industry. Effective control of the industry and its working conditions lies with the major retailer sector that exercises oligopolistic power over manufacturers of clothing. Therefore, there can be no effective solution of the interrelated problems faced by clothing outworkers without explicit recognition of this commercial power and corresponding obligations upon major retailers to assist in their remedy. Accordingly, there are three prongs to the legislative package introduced in NSW under the Industrial Relations (Ethical Clothing Trades) Act 2001. First, as mentioned in an earlier chapter, a tripartite body – the Ethical Clothing Trades Council - has been established to recommend whether mandatory legal obligations should be imposed upon the retail sector in relation to the supply of clothing. In particular, the Council will consider whether major retailers should be compelled to disclose information about the supply of clothing products so that the flow of work can be tracked through the clothing supply chain – the pre-requisite for effective enforcement of award, OHS and workers’ compensation obligations. Second, the Act entrenches the employment status of clothing outworkers to ensure they obtain the industrial entitlements of award employees. The NSW government is currently considering corresponding protection for employment status of clothing outworkers in relation to their OHS rights. Third, the Act creates an innovative right of recovery that enables outworkers to directly recover their pay and other industrial entitlements from the principal manufacturers at the top of the contracting chain – regardless of how many intervening parties there are. The government is also considering a parallel right of recovery directly against the principal manufacturer (at the top of the contracting chain) in relation to workers’ compensation entitlements. This strategy is currently under active consideration by all other state and territory jurisdictions throughout Australia. The Victorian government is currently undertaking a parliamentary inquiry into outworkers that has taken considerable evidence on the NSW strategy from both experts and interested parties. There are two especially noteworthy aspects to the development. First, as already noted, the explicit integration of minimum industrial standards, OHS and workers’ compensation in both a legislative and policy sense. Second, there has been the simultaneous development of regulatory recovery and tracking mechanisms that follow the flow of work (and workers) along each stage of the commercial supply chain. In other words, regulation designed to enshrine protection of workers has been reshaped to match the increasingly complex commercial contractual arrangements governing the provision of goods and services (and the reconfiguring of work arrangements associated with this). Clothing is by no means the only industry where a problematic connection between minimum labour standards, OHS and access to workers’ compensation entitlements has been identified and an analogous strategy has also been proposed for the long haul trucking industry. Even where this problematic connection is less significant there may still be a need to consider 379 --
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regulatory recovery and tracking mechanisms where it can be shown that a link between flexible work arrangements and complex commercial arrangements has weakened parties understanding of their regulatory responsibilities (or the ability to share this responsibility in a way that does not place OHS standards at risk). 15.2.2 Another Multi-Agency Strategy – Road Transport As just observed, a strategy that seeks to simultaneously address minimum labour standards and OHS problems associated with contingent work/subcontracting has been proposed in relation to the long haul trucking industry. The central elements of this strategy include enhanced award enforcement in relation to employee drivers, the setting of a minimum ‘safety rate’ for self-employed owner-drivers, the introduction of a safe driving plan to replace the logbook system, operator licensing/mandatory accreditation and the establishment of a multiagency to co-ordinate OHS enforcement strategies. In addition to its role as a risk assessment device, the safe driving plan provides the evidentiary basis, both for enforcing minimum labour standards and tracking the flow of work (and reciprocal OHS responsibilities) through often elaborate the chains of subcontracting/outsourcing. It is not intended to elaborate on these features as the proposal is still under consideration, some key elements have been discussed elsewhere in this report, and most OHS agencies (especially WorkCover NSW) are familiar with its contents. What is worth noting here is that the road transport industry represents an exceptional case with regard to inter-agency coordination. Unlike all but a few other industries (like maritime and sea transport as well as some areas of mining/oil production) the principle instrument used to regulate safety in long haul road transport was not OHS legislation but another body of law – in this case, road transport legislation. Historically, while OHS legislation had coverage of the industry (and thereby OHS agencies shared responsibility with road transport authorities), OHS agencies left much of the running to road transport legislation and enforcement agencies (road transport inspectors and the police). Since the mid 1990s this situation began to change in response to perceived deficiencies with existing enforcement regimes (not insubstantially linked to commercial pressures and the problems posed by subcontracting). The OHS agencies in most, if not all, Australian jurisdictions have increasingly become involved in collaborative measures with road transport agencies aimed at improving safety in the long distance road freight industry (including the establishment of joint body, the production of new guidance material, joint enforcement activity and information sharing). Moves to implement similar collaborative measures have occurred more slowly Europe and North America, although there is certainly evidence of growing cooperation (for example, in the USA OSHA recently formally lent its support Federal Highway Administration’s ‘stay alert’ campaign to protect highway workers, including truck drivers, OSHA Trade News Release 4 April 2002) and that the matter is being considered. In NSW an important outcome of the long haul trucking inquiry was the formation of taskforce with multi-agency representation (chaired by the Motor Accidents Authority of NSW and with a small permanent staff headed by a senior WorkCover NSW officer) to oversee the assessment and introduction of reforms. Most of the agencies in other jurisdictions spoken to in the course of interviews for this report referred to the growing collaboration between OHS and road transport agencies. This has also meant more contact at national level between state/territory agencies (in part facilitated by the National Road Transport Commission which has, itself, increased its contact with the National Occupational Health and Safety Commission). A number of jurisdictions (such as South Australia and 380 --
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Tasmania) arranged joint meetings during our visit for this project in order to obtain more information on the NSW trucking inquiry and indicate their own recent policy/enforcement initiatives. Several initiatives under consideration specifically focused on minimum labour standards while other noteworthy proposals under consideration included the licensing of road transport inspectors as OHS inspectors. In sum, what is emerging in the road freight transport industry are multi-agency enforcement strategies that are rather more elaborate/complex (in terms of the number of agencies involved) than that found in the clothing industry due to a particular regulatory framework and interstate nature of that industry. At the same time, there is also a growing recognition of the importance of commercial pressures/elaborately outsourced supply chains and minimum labour standards to OHS outcomes. There is evidence of similar concerns in Europe and North America although the move to a collaborative regulatory response appears to be more advanced in Australia. The need for a multi-agency approach is being considered in other areas of road transport, most notably the taxi industry where issues of bailment/subcontracting, low remuneration and poor OHS have also aroused concern. In Queensland, the departments of Industrial Relations and Transport undertook an investigation (Queensland Department of Industrial Relations and Queensland Transport Interdepartmental Review Committee 2001) of remuneration levels, OHS and other working conditions, including the effect on this of bailor/bailee arrangements (analogous to a legally constrained form of subcontracting) that are widespread in the industry. While its terms of reference specifically include the relationship of the bailor/bailee system to OHS the Committee has little to say directly on this. However, the committee does identify major standards/compliance problems associated with contractual arrangements and its own survey of 140 drivers revealed both serious concerns with long hours, low remuneration and poor OHS (including the risk of assault). These concerns were seen to significantly contribute to high driver turnover. The committee examined the situation in other states such as NSW where it noted that although there was contract determination covering taxi drivers NSW Department of Industrial Relations officers indicated it was not widely known of amongst drivers and further educative measures were being undertaken. The report recommended that s276 of the Industrial Relations Act on the voiding of unfair contracts (including remuneration) be amended to include contract for bailment under contract for services and also to permit collective applications. The report also made a series of recommendations for Queensland Transport to amend contracts with booking organisations to enhance driver safety (including training, emergency procedures, driving hours/fatigue management, and incident reporting). Further, another set of critical recommendations was for Queensland Transport and the Division of Workplace Health and Safety to establish a Taxi Industry Health and Safety Committee. Proposed tasks for this committee included developing an OHSM system for the industry and liasing with Police in the area of vehicle maintenance. Finally, it recommended that Queensland Transport examine the feasibility of establishing a driver complaints mechanism (Queensland Department of Industrial Relations and Queensland Transport Interdepartmental Review Committee 2001: 7). Responding to this report, the Queensland government introduced amendments to industrial relations legislation so drivers could take complaints of unfair working conditions to the Industrial Relations Commission, introduced a new regulated code of conduct and established an industry health and safety committee (CCH OHS Alert 26 August 2002). While welcoming these moves, the president of the Queensland Taxi Drivers Association argued that driver payments remained below community standards (CCH OHS Alert 26 August 2002): 381 --
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Its not all dollars and cents but definitely workers’ superannuation, holiday pay and sick pay, long service leave and proper workcover for drivers instead of having to pay for their own, and proper medical insurance when they’re injured, is definitely a must for our industry.
While there are a number of distinctive features of the Queensland situation, many of the issues raised by the Queensland inquiry are relevant to NSW and other jurisdictions. 15.2.3 Labour Hire: A Potential Area for a Multi-Agency Approach In addition to the two industries just mentioned reference should be made to the labour hire industry as a potential site for a multi-agency enforcement strategy. As noted in Chapter 7 the final report of NSW Labour Hire Task Force recommended that labour hire firms be required to be licensed. This recommendation was a direct outcome of the Task Force's finding that regulatory avoidance/evasion affecting OHS, workers' compensation, minimum wage rates and other statutory entitlements (such as those pertaining to leave) was a feature of the industry and was especially difficult to discourage using existing regulatory tools. It was difficult to discourage given the number of operators, the rapid turnover of some operators, and the intensity of competition, which meant that there was always pressure for some operators to gain an edge by disregarding regulatory standards. This recommendation, while receiving support from some within the industry itself, has faced opposition because such forms of proactive regulation are currently unfashionable, being viewed as an impediment to competition. This argument, while presently persuasive in policy making circles, ignores the economic, social and human costs when untrammelled competition results in the evasion of minimum regulatory standards and the so-called level playing field is either non-existent or set at the level of the lowest common denominator. Both the NSW Labour Hire Task Force and this report have cited evidence of such effects in relation to labour leasing. As with the tracking mechanisms discussed in relation clothing outworkers and road transport, licensing in the labour hire industry could be used as a vehicle for ensuring labour hire firms meet all their statutory obligations. For example, in order to be licensed a labour hire firm would need to demonstrate that it could meet the requirements of a code of practice in relation to OHS (and other issues for that matter). Renewal of the licence would be contingent on demonstrating it has abided with minimum regulatory standards. This option warrants the most careful consideration. The need for special regulatory measures in relation to labour leasing is neither new nor confined to Australia. As noted by Hall (2002:11-12) since the early 1980s the European Union has sought to develop a Directive on temporary agency work, with several attempts being stymied by opposition. Nonetheless, in October 2001 representatives of the social partners, the European committee of the International Confederation of Temporary Work Businesses and the European regional organisation of the Union Network International made a joint declaration on temporary agency work. One principle in the declaration was equality of treatment between agency workers and host organisation workers (eight EU countries have already enacted legislation guaranteeing that agency workers receive the same wages and conditions as host workers. Hall 2002: 13).
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15.2.4 Managing Health Risks Affecting Diverse Groups of Workers and the Community at Large As noted in earlier chapters, most of the initiatives in relation to changing work arrangements have been predominantly concerned with safety to the exclusion of health risks such as exposure to infectious diseases and the long-term health effects of work overload. For example, reference was made to the potential for downsizing and other changes in work practices to affect both patient and staff exposure to infectious diseases such as AIDS via needle sticks. Another group at risk of exposure to infectious disease are both paid and voluntary community workers assisting the homeless, youth and prostitutes. In some areas the diverse nature of the exposed population (including both workers and other members of the community) and array of different work arrangements they engage in make a single agency single target group strategy unworkable. An example of this is Q fever. As noted in Chapter 4 devising an effective immunisation program for abattoir workers was by no means a simple task given the temporary nature of some jobs and the not unrelated transient nature of a significant component of the workforce. It also needs to address other workers involved in meat processing such as livestock transport drivers. However, this is only part of the problem because Q fever can also affect a wide range of other workers including vets, sheep shearers and dairy and livestock farmers as well as those living in close proximity to these groups. From an OHS agency perspective the problem is that these workers are engaged in a variety of employment arrangements ranging from employees in small and large firms, to contractors, labour hire workers and small business operators and they are geographically dispersed. To address such risks therefore requires a multi-agency and community-focused approach. A recent initiative by the Victorian Health Department has been to establish a series of regional screening and immunisation clinics targeting sheep shearers and dairy and livestock farmers (CCH Latest OHS Headlines 23 July 2002). This might form the basis for a more effective collaborative approach with WorkCover on this issue. The potential for such joint activities to address significant health-related risks at work should be investigated. 15.3 Consistent Regulatory Policies and a ‘Whole of Government’ Approach At one level the multiple agency approaches described earlier in this chapter can be seen as part of an emerging ‘whole of government’ approach to policy development. Such an approach has often been well received by the subjects of such regulation as it is seen in resulting in greater consistency in standard setting and enforcement activity. A whole of government approach has also been identified as a key outcome of the national priority of strengthening government influence on OHS, itself part of NOHSC’s National OHS strategy 2001-2002. At the same time, as indicated elsewhere in this report, a number of the problems that OHS and workers’ compensation agencies are trying to grapple with in relation to changing employment relationships are partly the result of policies pursed by other government agencies (that promote outsourcing or the use of hold harmless contracts for example). Some OHS regulatory staff saw the reasons for this inconsistency in terms of other government agencies responding to budget/cost efficiency pressures and the need to pursue managerial styles that were closer to the private sector (using competitive tendering, efficiency/productivity targets, performance-based pay and the devolution of responsibility to 383 --
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agency management sometimes referred to as the New Public Management). Nonetheless, there was clearly some frustration at this because it made the task of OHS regulators more difficult and could also be taken by private industry to indicate that the government was setting standards for them it refused to meet itself. Whether it would be more efficient to introduce mechanisms so that an assessment of OHS effects had to form part government agency decision-making and to try and ensure greater overall consistency in policy development and implementation is a moot point. What can be said is that the sooner the costs of such contradictions in policy-making are identified and assessed as part of policy deliberations the better. Another ‘whole of government’ issue worth examining is the relationship of different levels of government. As noted in various sections of this report, the growth of contingent work arrangements has increased the scope for an effective transfer of costs between different healthcare support structures (most notably from employer-funded workers’ compensation schemes to the taxpayer funded Medicare and social security systems) that also generally entails a transfer of costs from state and territories to the federal government. On the other hand, as was also noted increased outsourcing and use of leased labour by federal government agencies and enterprises has also seen a growing shift in the reverse direction from ComCare to state/territory workers’ compensation schemes (or to no cover whatsoever in the case of self-employed subcontractors which of course may return to the federal Medicare and social security system). Given variations in the use of contingent workers and different patterns of injury/disease the size of these transfers may vary significantly between industries. Since the size of these cost transfers is potentially substantial (see Industry Commission, 1995) a strong case can be made for the heads of workers’ compensation/Workplace Relations Ministers Council commissioning research to identify these effects to provide the basis for developing appropriate policy responses. 15.4 Conclusion While it is too early to suggest some of the more elaborate forms of collaboration described in this chapter (such as those in relation to the clothing industry and long haul trucking) can be justified on a more general basis they are certainly worth of investigation to identify potential synergies as well as problems. Further, there is an urgent need to address deficiencies in existing workers’ compensation claims data as well as complementing this by using alternative data sources.
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Part 5: Strategic Options and Recommended Priority Actions 5.1 Introduction At the outset it is important to make a number of general observations, which should be read in conjunction with the specific recommendations made below. First, the recommendations made in this report have been, as far as possible, aligned with WorkCover NSW’s corporate objectives. These objectives are to optimise legislation, regulation and policy to deliver the vision of safe, secure workplaces, to ensure a high level of compliance with statutory requirements and to actively engage key stakeholders and the broader community towards the vision of safe, secure workplaces. Second, with regard to prevention in particular, interventions should be informed by and addressed the risk factors associated with contingent work arrangements identified in this report (see especially chapter 3). Remedies that ignore or are not informed by why and how risks arise in relation to these types of work arrangement are likely to fail and there is evidence of this (for example setting rules on subcontractors in way that fails to take account of the incentives/pressures that may encourage evasion). Third, the effectiveness of major remedies/interventions should be subject to internal assessment by WorkCover NSW augmented by independent assessment (by evaluators appointed by WorkCover). This approach has already been used successfully in relation to construction industry initiatives in NSW (and the same point can be made in relation to construction industry initiatives in Queensland. See Johnstone, 1999s). Such assessments provide a way of assessing the effectiveness of interventions as well as identifying ways the intervention can be improved, modified or further developed. Fourth, the report identified a small number of especially problematic industries that would seem to require collaborative remedies. In one of these industries, clothing outwork, a collaborative multi-agency approach has already been developed and in another (trucking) such a proposal is currently under review. Fifth, the report found that inconsistency of definitions of worker and employer under OHS, workers’ compensation, industrial relations and other legislation (such as taxation) was a source of confusion that exacerbated compliance difficulties. While these inconsistencies may be unavoidable some consideration should be given minimizing this mismatch to the extent this can be achieved without sacrificing existing worker entitlements Sixth, it is also presumed that WorkCover NSW will continue to draw on the initiatives of other jurisdictions and the framework of national collaboration established at the meeting of all federal, state and territory OHS agencies and national employer and union representatives in May 2001. Given the scope and potential ramifications of the issues and problems raised in this report, there are significant advantages in WorkCover NSW maintaining an ongoing 385 --
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dialogue with government agencies in other Australian jurisdictions. In a critical sense this report was only possible because of the co-operation of other agencies and this indicates the potential benefits of such a dialogue. Seventh, following on from the last point it is equally critical to establish a dialogue with regulatory agencies and OHS research agencies internationally that are turning their attention to these issues. This report has already referred to a number of relevant bodies such as the HSE. NIOSH, EFILWC (Dublin), the European Agency for Safety and Health (Bilbao), the NIWL and Finnish Institute for Occupational Health. A definite addition to this list not already mentioned is the French National Research Institute (INRE), which has done much pioneering research on the OHS problems posed by temporary and leased labour. Establishing a national and international dialogue will ptimize the resources that can be brought to bear on these issues, expedite the ptimize tion of existing knowledge and enable a productive exchange in relation to potential remedies. A key recommendation of this report is for WorkCover to develop the links essential to initiate and sustain such a dialogue. Recommendation 1: WorkCover NSW should take steps to further develop a dialogue with other agencies in Australia and overseas that are researching or developing interventions on the OHS issues surrounding changing employment arrangements. This dialogue should entail the exchange of information and experience and hopefully some visits if not short term exchanges of personnel. For convenience, the remainder of the recommended options have separated into those addressing prevention and those dealing with issues arising in relation to workers’ compensation and rehabilitation. 5.2 Prevention One of the most significant deficiencies identified by this report in relation to regulatory responses to the challenges posed by changing employment arrangements was the patchy nature of program initiatives and failure, in most cases, to assess their effectiveness. This report has sought to identify gaps that should be addressed as a matter of priority, including the OHS needs of temporary workers. It is also recommended that both existing and proposed remedies be subject to assessment on a periodic basis. This approach can and should form part of any move to a more strategic approach to prevention entailing goal setting as agreed by the NSW Workplace Safety Summit (2002) – an approach also now being pursued by overseas agencies in the UK (see HSC, 2001a) and elsewhere. It is worth noting that the HSE (2001a: 14) Strategic Plan 2001-2004 makes specific reference to changing employment patterns and has targeted a number of sectors, namely transport, agriculture, construction and health services where contingent work arrangements are pervasive (in the case of the first three) or have grown substantially (in the case of the health sector). Reinforcing points on risk transfer and supply chains made throughout this report the HSC (2001a: 14) stated: Continuing outsourcing and contractorisation and the close working relationships many small businesses have with larger firms as contractors and suppliers raises issues of transfer of risk from large to small and places a premium on effective systems for managing health and safety and for ensuring an informed relationship between partners.
A number of the industries (plus several others) identified by the HSC are identified in this report for special attention although the report also recommends a predominantly industry386 --
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based approach that will mean other important industries (such as hospitality) will not be overlooked. Moreover, this report makes a number of critical recommendations in relation to collecting information on OHS performance so as to provide for more effective goal setting and targeting of problem areas that, for various reasons, do not appear so important in terms of workers’ compensation claims. Recommendation 2: That priority targets on the OHS problems associated with changing employment arrangements be incorporated within WorkCover’s strategic planning. The interventions arising from this should be subject to both internal and independent external assessment over time so that more effective programs can be devised. 5.2.1 Policy and Legislative Reform
The scope and application of general duty provisions and key definitions One corporate goal of WorkCover is to optimize legislation, regulation and policy to deliver the vision of safe, secure workplaces. This report identified a problem in relation to present general duty provision that is especially relevant where outsourced work is not carried out at the employer’s premises. Recommendation 3: The expression “while they are at the employer’s place of work’ should be removed from section 8(2) of the OHS Act of NSW 2000, so that it resembles section 22 of the Victorian OHS Act. A similar amendment should be made to section 9 of the OHS Act of NSW 2000 (the self-employed person’s duty). In addition to the above problem there is a more general issue in relation to the understanding of employers, labour hire firms, subcontractors and other parties have of their responsibility under general duty provisions of the OHS Act of NSW 2000 (and the laws of other states for that matter). In other words, there appears to be widespread lack of awareness of how the general duties apply to particular work arrangements, such as subcontracting and labour hire, what may be deemed adequate induction, training and supervision of temporary workers, and an ignorance that downsizing/restructuring will often entail a significant change to work processes. To address this problem this report would make two recommendations. It is recognised that the first of these (recommendation 4) regarding potential legislative amendment is more difficult and care would need to be taken so that better identifying the duties in relation to some parties was not to be seen to delimit the ‘cover’. At the same time, it would have the advantage of sending a clear message on the importance of these requirements in a way that explanatory notes and other guidance material might not. The following recommendation (recommendation 5) should be pursued irrespective of the outcome of the examination undertaken under recommendation 4. Recommendation 4: That WorkCover undertake an examination of the present general duty provisions to see whether amendments to these provisions to better enunciate responsibilities in relation to temporary workers, labour hire (both employers and labour hire firms), subcontractors and major workplace restructuring (such as downsizing). 387 --
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Recommendation 5: That WorkCover revise existing guidance material and advisory notes on the OHS Act to clearly enunciate responsibilities (under the general duty provisions) with regard to temporary workers (ie that they must be accorded adequate induction, training and supervision), labour hire arrangements and that changes in work processes includes changes in work organisation such as outsourcing or restructuring/downsizing. As noted above, the report found that inconsistency of definitions of worker and employer under OHS, workers’ compensation, industrial relations and other legislation (such as taxation) was a source of confusion that exacerbated compliance difficulties. While these inconsistencies may be unavoidable some consideration should be given minimizing this mismatch to the extent this can be achieved without sacrificing existing worker entitlements Recommendation 6: That WorkCover NSW examine the alignment of key definitions (worker etc) under the OHS Act of NSW 2000 with those under NSW workers’ compensation and industrial relations legislation with a view to minimizing inconsistencies where possible.
Consultation/participation This report identified that these changes in work arrangements were seriously weakening the effectiveness of consultation/participator mechanisms in OHS legislation. In addition to the Swedish model of regional HSRs a similar initiative of roving Worker Safety Advisers was initiated in the UK in March 2002 to work with small business and their workers is being trialed in the building industry (in 3 regions), the voluntary sector (again in 3 regions), auto fabricators (1) and pubs and clubs (2 regions). The construction advisers have been selected by the building workers union UCATT, paid for by the HSE and trained by TUC tutors (Hazards 78 2002: 6-7) The trial will be formally and independently assessed .In order to address this, three specific recommendations are made. Recommendation 7: Amend regulatory provisions on participation so that subcontractors, their employees and leased workers who visit the site on a regular basis or who conduct work for the employer for more than a specified period of time must be incorporated in consultation/participative mechanisms. The WorkCover NSW Regulation 2001 (clause 23) and OHS Consultation Code (2001c) offer the beginnings of a model to achieve this. Recommendation 8: Revise guidance material to better inform employers of their obligations in relation to the involvement of temporary employees and others (subcontractors etc) in consultation processes. Recommendation 9: Introduce a system of mobile workplace safety advisors or roving health and safety representatives to provide advice on OHS to workers in small business and other areas who would otherwise lack any form of representation. The system could be introduced on a trial basis (as in the UK) in particular regions and covering particular industries (with suitable independent evaluation). In the UK the advisors have been nominated and trained by unions and paid for by the HSE. 388 --
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Industries requiring specific additional measures This report has identified a number of industries that pose particular challenges in relation to changing work arrangements, namely construction, clothing outwork, road transport (long haul trucking and taxis) and contract cleaning. In these industries the turnover of business and opportunities to evade regulatory requirements render normal compliance activities ineffective. These compliance problems extend beyond OHS to workers’ compensation and minimum employment standards. In relation to one of these, clothing out work, this problem has been recognised and a work tracking/workplace registration system is under consideration (elements have already been introduced) in NSW. It should also be noted that a recent inquiry into quality in the NSW building recommended the licensing of all builders. Recommendations to achieve a similar outcome are under consideration with regard to long haul trucking. To address these issues it is recommended that: Recommendation 10: That consideration be given to reintroduction of workplace registration or a tracking mechanism that achieves the same outcome in construction, clothing, trucking, taxi and contract cleaning industries. Another industry to pose particular problems is labour hire. Consistent with the view of the Labour Hire Task Force report it is the view of this report that: Recommendation 11: That WorkCover NSW recommend that legislation be enacted requiring the licensing of all labour hire firms in NSW.
Home-based work In the course of this project home-based work emerged as an area where there was considerable ignorance as to the extent and nature of the practices, the extent and nature of OHS risks and the application of existing regulation and compliance regimes. Many small businesses operate from home and there is a strong gender dimension to home-based work. In some industries at least, such as clothing outwork, there is a disturbing association between this type of work arrangement and the use of child labour. There is a need to obtain more information on the nature and use of home-based work (including telework) so that, if necessary, more effective measures to protect the OHS of these workers can be devised. In Canada a national review of the regulatory situation in relation to home-based work was recently undertaken (see Bernstein et al 2000). In Victoria there is a review of child employment laws currently taking place. Recommendation 12: WorkCover NSW should commission a research project on the extent and OHS issues (including workers’ compensation entitlements and child labour) and suitability of existing regulatory controls/compliance practices in relation to homebased work.
Hazardous substance exposure and health effects A second significant omission identified in the report was neglect by researchers, employers, unions and other parties the impact of changing work arrangements on the handling of hazardous substances and hazard exposures and health effects more generally (as distinct from safety). 389 --
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Recommendation 13: WorkCover NSW should commission a special research project on the impact of outsourcing, temporary and leased workers on the handling of hazardous substances and, if serious problems are identified, to indicate suitable remedies that may be used to address this. Information As noted throughout this report a number of contingent work arrangements pose a particular problem to existing data sources (especially but not exclusively workers’ compensation claims records) used to help direct enforcement activity to the areas of greatest need. Additional information sources are needed to remedy this problem. Additionally, these measures can provide an indication of the nature and extent of limitations in workers’ compensation data that will be of benefit to both the prevention and compensation streams within WorkCover. Methods of securing additional information on work-related injuries worthy of consideration include: o Adapting hospital treatment records (including admissions) so that work-related injuries can be identified. This approach was adopted in Queensland with QISP, which while it only applied to a limited number of hospitals provided valuable information (for example of the large number of injuries in the building/construction industry that did not result in a workers’ compensation claim. o Following the example of the USA which produces an annual census of workrelated fatal injury data on the basis of death certificates, use should be made of the national occupational fatality reporting scheme that has been developed through coroners offices of each state and territory. This will provide valuable data on at risk groups who, due to their contingent employment status, are underreported in workers’ compensation claims data. o In conjunction with agencies in other jurisdictions the federal government might be approached about adding a box to the Medicare claim form to indicate whether the injury or illness claimed for was work-related. Should this prove impossible an alternative would be to commission a research project to analyse Medicare claims in a particular region over time to try and identify those that are workrelated. o Undertaking a large workforce survey at regular intervals (say every 5 years) along the lines of that conducted in the European Union by the European Foundation for the Improvement in Living and Working Conditions. Adapting/using the latter would be especially useful in that it considers health (not simply safety indicators) and could be benchmarked against the results of the EU survey and the EU survey has been especially tuned to examine the OHS effects of changing work arrangements. An additional advantage is that the survey is being used to develop as part of the quality of working life benchmarking-tool. It would provide OHS agencies in Australia such as WorkCover NSW with the basis for an ongoing international dialogue on this and other issues. Informal discussions with Foundation staff indicate that they would have no objection to such a development. In terms of filling the gap in existing data sources this is viewed as the most cost effective comprehensive strategy of those canvassed here and thereby should be seen as the first priority. o WorkCover could keep a record (and obtain copies) of major studies/surveys of work-related injury and disease undertaken in NSW or Australia that provide 390 --
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additional information on the extent of OHS problems in particular industries (especially those where there are known to major gaps in workers’ compensation records). Examples include recent surveys of OHS amongst long haul truck drivers undertaken by Dr Ann Williamson and colleagues and a survey of occupational violence in the NSW Department of Health undertaken by Dr Claire Mayhew. Recommendation 14: That WorkCover NSW adopt the five yearly workforce survey developed by European Foundation for Improvement of Living and Working Conditions. Other jurisdictions could be approached to see if they wish to join this venture but failing this WorkCover should proceed alone. Recommendation 15: That WorkCover NSW approach the NSW Department of Health with a view to introducing a system for recording work-related hospital admissions. Recommendation 16: That WorkCover NSW keep a record (and the library obtain copies) of major studies/surveys of work-related injury and disease undertaken in NSW or Australia that provide additional information on the extent of OHS problems in particular industries (especially those where there are known to major gaps in workers’ compensation records). 5.2.2 Compliance and Enforcement Another objective of WorkCover NSW is to ensure a high level of compliance with statutory requirements. As noted throughout this report, the growth of flexible arrangements poses a particular challenge to these activities, and some industries are especially problematic. The following recommendations are designed to address these issues. They build on the experience of a number of positive initiatives. Improved awareness of legal obligations and methods for promoting compliance This report noted that despite prosecutions there appears to be a significant level of ignorance amongst employers and other parties as to their legal duties in the cases where, for example, they outsource; are subcontractors; lease labour; or use temporary, leased or home-based workers. It was noted that there are considerable gaps in existing guidance material in terms of reference to these issues in general material as well as an absence of guidance material on specific work arrangements (both generic and industry-specific). It is recommended that in addition to enforcement activity that helps establish these responsibilities, WorkCover improve information in these areas by adapting existing guidance material, issuing new guidance material where appropriate and incorporating these issues into its advertising, training and awareness raising activities (note particularly observations made in relation to the Risk Assessment Regulation). One issue to arise from the last point is whether the focus on information delivery should be on generic or industry-specific documentation. The short answer is that both types are necessary but that focus should tend to be towards the latter. Generic material/information is essential in order to raise awareness of the issues and to ensure that all parties are aware they have obligations in these areas. To not produce this material would be to risk leaving major gaps in the information network since it would be logistically difficult to produce specific information for every industry and issue related to contingent work. Further, contingent work 391 --
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is simply too widespread for an entirely selective strategy. Industry specific information/compliance strategies, on the other hand, will provide practical and targeted advice on compliance, with examples and reference to risk factors, the parties are more likely to apply to their own circumstances. It can also be used to support industry specific strategies in areas of particular concern. Given the diversity of work arrangements found even within particular industries focusing or modifying material for specific industry subgroups may be desirable (see for example comment on the mining and quarrying industry in Chapter 6). In sum, there is a need to produce both generic and industry specific guidance material but the focus should on the latter and such material should be produced in a ‘cheap’ and effective format so that resources can be concentrated on activity-based remedies (see below). Recommendation 17: That WorkCover NSW should develop generic guidance material to better explain duties re temporary work, agency labour, subcontracting, telecall centres, home-based work and voluntary work. In so doing, this guidance material should: o Emphasise overarching duty of principal contractors o Include more on work organisation risks o Consider both health and safety risks o Cross reference material to other guides o Indicate overlaps eg many small business home-based and/or subcontractors Recommendation 18: WorkCover NSW and its IRG’s should develop or adapt existing industry specific guidance material to better explain duties re temporary work, agency labour, subcontracting, telecall centres, home-based work and voluntary work. This guidance material should: o Deal with work arrangements specific to that industry (existing guides should be adapted) o Be cheaply produced (ie not glossy, A4, short eg 20-30 pages, pull apart, faxable and written for small employer) o Be web-accessible and linked to hot-line/FAQ sections o Use clever distribution (eg regional launch, small business evening meeting, and advertised in industry/commercial papers) As noted above, production of guidance material that addresses different work arrangements is important but should not be the major focus of ‘positive’ compliance activity. Rather, attention should focus on proactive measures by WorkCover (see the discussion of compliance audits above) and collaborative industry-specific ventures involving the IRGs supported by a mandatory component and enforcement. In terms of industry specific developments this report noted a number of positive examples, especially those marked by a high level of industry and union involvement such as those emanating from IRGs and their equivalents. The MOU/Subbypack approach involving influential parties provides a model for this though the precise structure adopted, methods used and work arrangements targeted will need to be devised to meet industry characteristics. At the same time, interventions should focus on the critical risk factors identified in this report. There is also a need to ensure industry level initiatives are not narrowly confined to one particular work arrangement (such as subcontracting) – as is the case now - when a number need to be addressed. Hopefully, this report will provide information that can be used to guard against this potential limitation. 392 --
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Recommendation 19: A priority recommendation of this report is that WorkCover NSW should promote further initiatives to address flexible work arrangements in all key industry groups where these arrangements are widespread and there is evidence they are affecting OHS outcomes (including compliance levels). In achieving this, WorkCover should draw on the expertise and collaborative framework of the IRGs and previous initiatives as well as those being undertaken in other jurisdictions (such as small business/accounting profession link being built in South Australia and others identified in this report). Finally, these initiatives should be evaluated at appropriated intervals to assess their effectiveness and to enable program modification where necessary. Recommendation 20: WorkCover NSW should develop and promote the adoption of codes on labour leasing, telecall centres, downsizing/restructuring, subcontracting, and temporary workers by government departments, agencies and business units in NSW. Improved compliance information and targeted enforcement Given the serious information gaps identified in this report there is an urgent need for WorkCover NSW to obtain better information so as to make best use of compliance resources. A number of measures to provide better information have already been recommended. One measure is the use the targeted compliance audits. While increasing use has been made of such audits (for example in the construction industry), a more systematic two-stage process could be pursued. o First, a compliance audit of a representative sample (by size) of employers’ workplaces across a range of industries (especially those known to make extensive use of contingent work arrangements). Ideally, this audit would be collaborative venture involving both prevention and workers’ compensation officers of WorkCover NSW plus Department of Industrial Relations inspectors. At the very least these bodies should share information obtained from an audit process undertaken by each. o Second, based on the following information selective use can be made of target audits based on inspections of a number of workplaces plus other information sources (workers’ compensation claims record, NOHSC research and data analysis, Australian and international research, hospital admission records, and feedback from inspectoral visits) could provide a model for enhancing information on industries or sub-sectors where contingent work arrangements are extensive and weaken the reliability of workers’ compensation data. Recommendation 21: WorkCover NSW should make more systematic use of compliance audits and use this information to enable it and IRGs to better plan interventions. In industries where there are interrelated patterns of non-compliance with standards under a number of legislative heads of power WorkCover should conduct collaborative compliance activities with Department of Industrial Relations and the workers’ compensation division of WorkCover. Enforcement practices, including the selection of appropriate penalties, are critical to reinforcing the message about the respective responsibilities of various parties. While the selection of parties to be prosecuted and the level of fines imposed are valuable indicators the evidence presented in this report suggest that, of itself, this is not enough. In addition to more explicitly publicising prosecutions where these messages can be highlighted it is also suggested that consideration might also be given to other penalties/remedies that might clearly 393 --
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target the problem and address its underlying causes. For example, the use of probation sentencing or enforceable undertakings (as presently under consideration in Tasmania) may be a more effective remedy in relation to employers failing to manage subcontractor safety or irresponsible subcontractors who simply reconfigure their business (ie new company with a different name) following a serious incident. Prescribed behaviour enables the regulatory agency to fit the penalty to the party and minimise the chance of a further offence. It is suggested this option be given consideration. Recommendation 22: WorkCover NSW should examine whether the improvement can be made in the present array of enforcement measures to better address situations entailing complicated work arrangements. This should include consideration of more proactive measures such as targeted compliance audits and selective publicized blitzes (in conjunction with more general awareness raising in that subsector). It would also include the targeted enforcement (using both blitzes and ‘signal’ prosecutions) of key issues, especially those neglected in the past, such as inadequate induction, training or supervision of temporary workers (in industries like hospitality and manufacturing) and hazardous work organisation (and failure to consult) arising from restructuring. Compliance and enforcement practices also need to take explicit recognition of the capacity of different parties to adopt systematic OHSM (reinforced by the exemption of small business from the risk assessment requirement) and the enforcement tools. Given this it is recommended that WorkCover NSW should adopt the two-track model developed by Gunningham and Johnstone (1999). As part of a two-track model some consideration may need to be given the present structure of the inspectorate. The most obvious change would be to arrange the inspectorate into two divisions, each responsible for one track. Another possibility would be to establish separate sections to address particularly problematic areas (in the UK the HSE has recently established a Construction Division to develop a dedicated compliance strategy including regional blitzes, when it became aware this industry accounted for more than one third of all work-related deaths in 2001, HSE Press Release E071:02-22 April 2002). Recommendation 23: WorkCover NSW should adopt the ‘two-track’ model of compliance/enforcement but also give recognition to intervening supply chains where these are significant. Consistent with comments made in this report (and extending on recommendation 10) several industries present serious compliance problems relating to a range of legislative standards (OHS, workers’ compensation and industrial relations) warrant multi-agency intervention strategies. Recommendation 24: WorkCover NSW should explore the development of multi-agency compliance programs in relation to clothing outwork, trucking, taxis, contract cleaning and building and construction. Finally, even with the more effective use of existing resources and strategic targeting it is difficult to see how WorkCover can address the demands associated with complex and changing work arrangements, home-based work and the like without some additional resources. One way of providing additional resources would be to allocate a larger amount (moiety) of penalties imposed by prosecutions for breaches of OHS legislation and the failure to pay the correct level of workers’ compensation insurance premiums. 394 --
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Recommendation 25: WorkCover NSW should receive additional funding from fines associated with its compliance activity and this funding should be directed to better addressing the problems identified in this report. Enhanced awareness of and capacity to address these issues amongst inspectoral, accredited OHS trainers and other parties If inspectors are to incorporate recognition of the effect of work arrangements on OHS factors into their activities then existing inspectors will require some additional training/awareness raising while this aspect should be incorporated into entry training for inspectors at appropriate points (for example in the treatment of general duties). Recommendation 26: WorkCover NSW should ensure existing inspectors receive training to enable them to better recognise and incorporate relevant work organisation/employment arrangement issues into their workplace monitoring and compliance activities. 5.2.3 Communication and Influence A third objective of WorkCover is to actively engage key stakeholders, workplace service providers and the broader community towards the vision of safe, secure workplaces. A way of achieving greater employer, worker and community awareness of how employment arrangements can and do affect OHS is via new or modifying existing electronic and print media campaigns. For example a television or radio advertisement featuring an incident with a young worker could highlight that they were temporary, leased or a subcontractor. In another case, the hazardous consequences of a poorly planned organisational restructuring could be highlighted (and one where workers were not consulted on the changes). Given what has been already said in this report the message you can’t outsource your responsibilities for OHS should be promoted. Recommendation 27: WorkCover NSW should incorporate recognition of different employment arrangements into media campaigns. Serious consideration should be given to a specific campaign on this issue. Measures should be undertaken to ensure that WorkCover accredited OHS trainers have knowledge in this area (this process has already begun when the issue was included in a conference of accredited trainers held in Brighton in 2001). It should be noted that in the USA OSHA has recently sponsored an education program on home-care health and safety for OHS trainers at the University of Illinois (OSHA Trade News Release, 10 April 2002). There is also a question as to whether WorkCover should contribute to enhancing knowledge and awareness of these issues amongst OHS professionals and practitioners. In the USA NIOSH financially supports educational programs concerned to train OHS professionals (occupational physicians, occupational nurses, safety engineers and the like) and it has also funded training in occupational health psychology to specifically address psychosocial factors including work organisation. This is seen as part of a broader strategy for managing losses due to occupational injury and disease (Chao, 2002).
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Recommendation 28: WorkCover NSW should explore ways of incorporating information on the relationship of work arrangements and OHS into the education of accredited OHS trainers and it should also promote awareness of this issue amongst the OHS professions. Finally, public release of this report (less recommendations) could used to promote public debate and community awareness of these issues as well as a climate for change (see recent NSW Safety Summit). Circulation of the report will also enhance WorkCover’s capacity to establish a dialogue with other OHS agencies in Australia and overseas Recommendation 29: WorkCover NSW should publicly release this report (excluding these recommendations).
5.3 Workers’ Compensation and Rehabilitation Coverage, claims behaviour and worker entitlements This report identified a potentially significant decline in formal coverage of workers’ compensation due to changing employment arrangements. It also appears that these changes are having an impact on claims behaviour that is of at least equal magnitude. While the evidence is patchy these changes could weaken workers’ compensation regimes as means for dispensing mass justice to injured workers while also encouraging inequitable practices that effect worker entitlements. The report identified serious problems in relation to worker entitlements or rather workers accessing their entitlements. Information produced by WorkCover NSW (including Industry Reference Groups) should provide due acknowledgment of the rights and entitlements of workers in contingent work arrangements who may not be aware of their entitlements, including temporary workers. Further, the use of bodies to improve the distribution of information and assistance with workers’ compensation claims to contingent workers should be explored. The report identified a number of models as to how this might be achieved. This included occupational health or occupational health legal clinics (independent but partly funded by government) and the Office of Worker Adviser (or its equivalent) operating in some Canadian provinces. The closest existing equivalent to the legal clinics in terms of providing advice to workers on OHS and workers’ compensation matters would be workers’ health centres and women’s health centres These bodies might provide a valuable nongovernment conduit for improving knowledge of workers’ compensation amongst contingent workers. The WorkCover Corporation of South Australia has established an Employee Advocate Unit that provides free confidential advice and will represent workers independently of WorkCover, its Claims Agents and the worker’s employer Recommendation 30: WorkCover NSW should re-examine coverage/deeming provisions with a view to expanding and clarifying cover with regard to ‘disguised’ employees. Recommendation 31: In industries where non-compliance with workers’ compensation is endemic such as clothing outwork, building, cleaning and taxis (despite deeming provisions) and many workers cannot access their entitlements WorkCover NSW should 396 --
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seek regulatory controls to address this using rebuttable presumption/tracking mechanisms. Recommendation 32: WorkCover NSW should examine ways to compel employers (especially those in small business and industries making extensive use of temporary and leased workers) to provide information to their employees on workers’ compensation. Recommendation 33: WorkCover NSW should develop generic and industry specific information on workers’ compensation entitlements for temporary workers etc and target distribution to relevant industries such as hospitality (involving IRGs where appropriate). Recommendation 34: WorkCover NSW should facilitate the development of community-based sources of information and advice on workers compensation (eg Ontario model) In keeping with findings of the Industry Commission (1994) some years ago, this report identified substantial cost transfers between employers and the community as work-related injury and illness claims are referred to the Medicare system, social security or other support mechanisms (other forms of insurance, self-help and community aid) rather than being addressed under workers’ compensation. The Industry Commission identified the connection between this process and subcontract work arrangements. The evidence of this report, admittedly fragmentary, would support this conclusion. However, it would also suggest that a range of other contingent work arrangements (such as labour hire, temporary employment and home-based work) also contribute to this process. This is a serious issue warranting further research and attention from policy makers. As the issue is best addressed at a national level this report makes no formal recommendation but does urge that state, federal and territory government agencies collaborate on investigating the extent and nature of these problems. Information and claims management The report found evidence that outsourcing and the use of leased labour could affect workers’ compensation claims data at an aggregate, industry or individual employer level. Evidence of these effects highlighted the danger of simply examining/analysing claims data without reference to shifting patterns of labour usage at industry or workplace level. As indicated above, a number of information sources identified in the previous subsection are relevant to workers’ compensation and rehabilitation functions. In addition to this, other sources will, for example, provide information into groups of contingent workers who are either ignorant/confused about their entitlements to workers‘ compensation or who are reluctant to make claims. These groups could then be targeted by information strategies. One method would be to get the Australian Bureau of Statistics to undertake a survey of workers in NSW (as was done in 1993) or, in conjunction with other jurisdictions a national survey (similar but more detailed than one recently carried out and referred to in this report) to identify those with work-related injuries, the proportion of whom made workers’ compensation claim, and the reasons given for not making claims when injured. This survey should be broken down by employment status (part-time/full-time, temporary/permanent, leased/direct hire, self-employed/employee as well as employer size and industry. Ideally, the survey should be repeated every five years. Consideration should also be given to data matching although this may take some time to negotiate given privacy concerns.As indicated 397 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
in this report a study providing information on this was undertaken in the 1980s and more recently in British Columbia (by Hertzmann and colleagues using cross-matched hospital treatment, workers’ compensation and disability support claimant records). Recommendation 35: WorkCover NSW should research claims behaviour/injury reporting to identify and target information to vulnerable groups such as itinerant home-based workers. This could be achieved by modifying the existing ABS surveys of injury reporting. Consideration should also be given to the data matching approach being used in Ontario. Recommendation 36: WorkCover NSW should verify and analyse existing workers compensation claims data relating to the claims behaviour of permanent/non permanent workers, leased workers and changes to claims following downsizing. This analysis could be used to inform both compensation and prevention interventions. It would assist if this were accompanied by an analysis of data quality. Recommendation 37: WorkCover NSW should assess premium setting in relation to labour hire (and those using it) with a view to introducing a separate set of premiums for labour hire. In so doing it should liase with other jurisdictions regarding their methods and experience with setting specific labour hire premiums. Recommendation 38: WorkCover NSW should increase compliance audits and penalties in conjunction with current data mining to detect evasion or understatement of insurance premiums. In so doing it should consider industries not already targeted but which are significant users of subcontractors, temporary and leased labour. Return to work A study should be undertaken on the overall impact of the growth of contingent work arrangements on the effectiveness return to work procedures, including the relative effect on different types of injury and industry-specific cost burdens resulting from this. For those industries where the cost burden is high consideration should be given to imposing an exemplary premium to defray these costs to the community. Recommendation 39: WorkCover NSW should examine the implementation of existing provisions relating to employment security with a view to making them more effective and ensuring these provisions are rigorously enforced. Recommendation 40: In collaboration with employers, labour hire representatives and unions WorkCover NSW should produce a guide on injury management for the labour hire industry. Recommendation 41: WorkCover NSW should examine ways of ensuring labour hire firms provide return to work/rehabilitation. As inducements are unlikely to be enough given competitive nature of industry/small operators consideration will need to be given to mandatory obligations on host at time of injury to provide job while labour hire firm pays costs Recommendation 42: WorkCover NSW should facilitate pooling as a method for small business engaging in return to work (with suitable second injury claim protection) 398 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
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Walters, D. (1997), 'Preventive Services in Occupational Health and Safety in Europe: Developments and Trends in the 1990s', International Journal of Health Services 27(2):247-71. Walters, D. (2001), Health and Safety in Small Enterprises: European Strategies for Managing Improvement, PIE-Peter Lang, Brussels. Walters, D. (2001), 'Participative approaches to managing health and safety in small enterprises in Europe: Strategies for trade union renewal', paper presented to the International Industrial Relations Association 6th European Congress, Oslo, June. Walters, D. and Frick, K. (2000), ‘Worker Participation and the Management of Occupational Health and Safety: Reinforcing or Conflicting Strategies?’, in K. Frick, P. Jensen, M. Quinlan and T. Wilthagen, eds. Systematic Occupational Health and Safety Management: Perspectives on an International Development, Pergamon, Oxford, 87-98. Walton v Hector Trucking 13 Conn Workers’ Comp. Rev. Op.239, 1835 CRB-1-93-9 13 April 1995 WCB of BC, (1997), Determining who is a worker under the Workers’ Compensation Act: A Briefing Paper, Workers’ Compensation Board of British Columbia report to Royal Commission on Workers’ Compensation. WCB of Queensland, (1994), Workers’ Compensation – Miscellaneous Issues Discussion Paper, Workers’ Compensation Board of Queensland, Brisbane. Weissman, R. (1997), ‘Bad Claims on Workers’ Comp’, The Nation, 265(15):22-6. Westerlund, H., Theorell, T. and Bergstrom, A. (2001), ‘Psychophysiological effects of temporary alternative employment’, Social Science and Medicine, 52:405-415. Western Australian Prevention of Mining Fatalities Taskforce (1997), Report on the Inquiry into Fatalities in the Western Australian Mining Industry, Western Australian Mines Occupational Safety and Health Advisory Board, Perth. Westin, S. (1990), ‘The structure of a factory closure: Individual responses to job-loss and unemployment in a 10-year controlled follow-up study’, Social Science and Medicine, 31, 1301-1311. Whittington, G. (1998), ‘Workers’ compensation legislation enacted in 1997’, Monthly Labor Review, 23-8. Wiatrowski, W. (1994), Small business and their employees. Monthly Labor Review 117(10):29-35. Wilcox, T. & Lowry, D. (2000). ‘Beyond Resourcefulness: Casual Workers and the HumanCentered Organisation’, Business and Professional Ethics Journal, 19(3&4) 29-53. Willborn, S. (1997), ‘Leased Workers: Vulnerability and the Need for Special Legislation’, Comparative Labor Law Journal, 19:85-95. Williams, C. and Windebank, J. (2002), 'Why do people engage in paid informal work? A comparison of higher- and lower-income urban neighbourhoods in Britain', Community, Work and Family, 5(1): 68-83.
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Williamson, A., Feyer, A., Friswell, R. and Saduri, S. (2000), Driver fatigue: A survey of professional heavy drivers in Australia, draft of report prepared for the National Road Transport Commission. Wilson, J. (no date), Improving Performance in Group Training Companies, Report for the WorkCover Corporation of South Australia, Adelaide. Winder, C., Gardner, D. and Trethewy, R. (2001), ‘Occupational health and safety management systems: recent Australasian developments’, Journal of Occupational Health and Safety – Australia and New Zealand, 17(1): 67-77. Witmer, E. (1997), ‘Workers’ Compensation Reform Clears Another Hurdle’, News Release Communique, Ontario Ministry of Labour, October 9. Wooden, M. (2001), 'How Temporary are Australia's Casual Jobs?' Work, Employment and Society, 15(4): 875-884. Wooden, M. (2001a), Working Time Patterns in Australia and the Growth in ‘Unpaid’ Overtime: A Review of the Evidence, Report commissioned by the Australian Chamber of Commerce and Industry, Melbourne. Woodward, C., Shannon, H., Cunningham, C., McIntosh, J., Lendrum, B., Ronsebloom, D. and Brown, J. (1999), ‘The impact of re-engineering and other cost reduction strategies on the staff of a large teaching hospital: A longitudinal study’, Medical Care, 37, 55669. Woodward, C., Shannon, H., Lendrum, B., Brown, J., McIntosh, J., and Cunningham, C. (2000), ‘Predictors of job stress and satisfaction among hospital workers during reengineering: Differences by extent of supervisory responsibilities’, Healthcare Management Forum, 13, 29-35. Work in Progress (AFL-CIO)
[email protected] Work matters Issue No.26 September 2000 (newsletter of Workplace Services, Department of Administrative and Information Services, South Australia). WorkCover NSW, (1996), Occupation Health and Safety – Why Bother? An OHS implementation guide for managers of small manufacturing businesses, WorkCover New South Wales, Sydney. WorkCover NSW, (1996), Working from home: A guide to occupational health and safety, rehabilitation and workers’ compensation requirements, WorkCover New South Wales, Sydney. WorkCover NSW, (1996a), Preventing violence in the accommodation services of the social and community services industry, WorkCover New South Wales, Sydney. WorkCover NSW, (1997), Due diligence at work, WorkCover New South Wales, Sydney. WorkCover NSW, (2001), Premium Discount Scheme: Benchmark Guidance Material, WorkCover New South Wales, Sydney. WorkCover NSW, (2001a), Small Business Safety Starter Kit, WorkCover New South Wales, Sydney. WorkCover NSW, (2001b), Plant Hire and Lease: What Suppliers Must Know, WorkCover New South Wales, Sydney. 438 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
WorkCover NSW, (2001c), OHS Consultation – Effective Decision Making and How to Establish OHS Consultation Arrangements: Code of Practice, WorkCover New South Wales, Sydney. WorkCover NSW, (2001d), Workers Compensation Insurance Compliance Green Paper, WorkCover New South Wales, Sydney. WorkCover NSW, (2001e), Safely Building New South Wales: Priority Issues for Construction Reform, WorkCover New South Wales, Sydney. WorkCover NSW, (2001f), Working Safely in the Cotton Industry: Cotton Safe, WorkCover New South Wales, Sydney. WorkCover NSW, (2001g), Industry Reference Groups Current Project Summary: Quarterly Report July-September 2001, WorkCover New South Wales, Sydney. WorkCover NSW, (2001g), Industry Reference Groups Completed Project Summary: September 2001, WorkCover New South Wales, Sydney. WorkCover NSW, (2002), Review of the WorkCover Classification (WIC) System: Discussion Paper, WorkCover New South Wales, Sydney. WorkCover NSW, (2002a), When an Inspector Calls – A Guide to WorkCover’s Compliance Strategy, WorkCover New South Wales, Sydney. WorkCover NSW, (2002b), OHS Regulation 2001 with margin notes, WorkCover New South Wales, Sydney. WorkCover NSW, (2002c)., Workers Compensation (Bush Fire, Emergency and Rescue Services) Regulation 2002 Regulatory Impact Statement, WorkCover New South Wales, Sydney. WorkCover NSW, (2002d)., Workers Compensation (Workplace Injury Management) Regulation 2002 Regulatory Impact Statement, WorkCover New South Wales, Sydney. WorkCover NSW, (no date), Violence in the Workplace, WorkCover New South Wales, Sydney. WorkCover NSW, (no date A), Safety at Work: A Guide to Young Workers in the Hospitality Industry, WorkCover New South Wales, Sydney. WorkCover NSW, (no date B), Protecting Young Workers from Workplace Hazards, WorkCover New South Wales, Sydney. WorkCover NSW, Workplace Violence Fact Sheets, various issues. WorkCover Corporation of South Australia, (1995), Occupational Health and Safety in SA: Part 1 – Setting the Scene, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (1996), Occupational Health and Safety in SA: Part 2 – Trends, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (1997), Guidelines for Managing Health and Safety in the Labour Hire Industry, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (1998), Occupational Health and Safety in SA: Part 3 – Permanent Disability, WorkCover Corporation of South Australia, Adelaide.
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Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
WorkCover Corporation of South Australia, (1998a), Employing a new work? Employer’s guide to ensuring a safe start for new workers, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia (2000), Labour Hire Task Force Report, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia (2000a), Safety in horticulture: An OH&S Resource Kit, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2000b),, A guide to Taxi Drivers, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2000c),, A guide to Performers and Entertainers, WorkCover New South Wales, Sydney. WorkCover Corporation of South Australia, (2000d),, A guide to Council Drivers, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2000e),, A guide to Outworkers, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2000f),, A guide to Cleaning Work, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2000g),, A guide to Building Work, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2000h),, A guide to Fishing Crews, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2000i),, A guide to Miscellaneous Classes, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2000j),, A guide to Owner drivers, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2001), Employee Advocate Unit, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2001a), Workplace Environment Survey: Hospital – Workers form, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2001b), Workplace Environment Survey: Aged/Convalescent Home – Workers form, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2001c), Workplace Environment Survey: Hospital – Employers form, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2001d), Workplace Environment Survey: Aged/Convalescent Home – Employers form, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia (2001e), Historical Table of SAWIC Levy Rates as at 1 July 2001, WorkCover Corporation of South Australia, Adelaide. WorkCover Corporation of South Australia, (2001f ), Strategic Briefing No.16, WorkCover Corporation of South Australia, (2001g), Injury management guide for labour hire companies, WorkCover Corporation of South Australia, Adelaide. 440 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
WorkCover Corporation of South Australia Investigation Unit, (no date), Innovation in Investigations, WorkCover Corporation of South Australia, Adelaide. WorkCoverCorporation Small Business, Working to Live Newsletter, various issues. Workers Online (organ of the Labor Council of New South Wales), various issues. WorkCover News (WorkCover NSW), various issues. WorkerCover NSW Press Release 5 February, 1997 WorkCover Western Australia, (2000), Work-Related Stress 1995/96-1998/99, WorkCover Western Australia, Shenton Park. WorkCover Western Australia, (2000a), Small Business Guide to Injury Management and Workers’ Compensation, WorkCover Western Australia, Shenton Park. WorkCover Western Australia, (no date), A Complete Guide to Workers’ Compensation, WorkCover Western Australia, Shenton Park. Workers Online (organ of Labor Council of NSW), various issues. Workplace Relations Ministers’ Council, (2000), Comparative Performance Monitoring: The Second Report into Australian and New Zealand Occupational Health and Safety and Workers’ Compensation Programs, Commonwealth of Australia, Canberra. Worksafe Australia (1994), The Cost of Work-Related Injury and Disease, AGPS, Canberra. WorkSafe Victoria (2001), Recent Prosecutions, 1 January to 30 December 31 2000, WorkCover Authority of Victoria, Melbourne. WorkSafe Western Australia, (no date), Workplace safety priorities, WorkSafe Western Australia, Perth. WorkSafe Western Australia, (no date a), The First Step: A guide to properly managing your safety and health hazards, WorkSafe Western Australia, Perth. WorkSafe Western Australia, (1999), Code of Practice: The safety and health of children and young people in the workplace, WorkSafe Western Australia, Perth. WorkSafe Western Australia, (2001), ‘Safety priorities for young people in the workplace’ fact sheet 03/2001, WorkSafe Western Australia, Perth WorkSafe Western Australia, (2001a), Composition of Western Australian Labour Force and Growth Trends 1990/91- 2000, WorkSafe Western Australia, Perth WorkSafe Western Australia, The Safety and Health of Children and Young People in Workplaces: Code of Practice, WorkSafe Western Australia, Perth Wright, C. and Lund, J. (1996), 'Best Practice Taylorism: “Yankee Speed-Up” in Australian Grocery Distribution', Journal of Industrial Relations 38(2):196-212. Wright, C. and Lund, J. 'Under the clock’: trade union responses to computerised control in US and Australian grocery warehousing', New Technology, Work and Employment 13(1):3-15. Yamada, Y., Kameda, M., Noborisaka, Y., Suzuki, H., Honda, M. and Yamada, S. (2001), ‘Excessive fatigue and weight gain in cleanroom workers after changing from an 8-hour to a 12-hour shift’, Scandinavian Journal of Work Environment and Health, 27(5):318326. Yann, Cambell, Hoare, Wheeler Strategic Research and Planning, (1999), Employment Security and Working Hours: A National Survey of Current Workplace Issues: July 1999, report prepared for the ACTU Melbourne.
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Yates, A. (2000), Government as an informed buyer: Recognising technical expertise as a crucial factor in the success of engineering contracts, The Institution of Engineers, Australia, Barton ACT. Zeitlin, L. (1995), ‘Organisational downsizing and stress related illness’, International Journal of Stress Management, 2(4): 207-19. Zinn, C. (2001), ‘Health service ranked as most violent work environment in Australia’, British Medical Journal, 323:1386-7. Zwerling, C., Ryan, J. and Orav, E., (1991), ‘Workers’ Compensation Cost Shifting: An Empirical Study, American Journal of Industrial Medicine, 19:317-325. Zwerling, C., Miller, E., Lynch, C. and Torner, J. (1996), Injuries amongst construction workers in rural Iowa’, Journal of Occupational and Environmental Medicine, 38(7):698-704.
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Persons Interviewed or Assisting the Project The following persons were interviewed for the project, submitted material or in other ways facilitated research for this project. The project team is very grateful for their support. Adams, Brian - OHS Consultant Customer Operations, WorkCover Corporation of South Australia, Adelaide Adams, Denise – Director, Workplace Health & Safety Policy, Queensland Division of Workplace Health and Safety, Brisbane Allan, Jeremy – OHS Officer, Construction, Mining, Forestry and Energy Union, New South Wales, Sydney Andryszak, Henry – Program Manager, Industry Programs Customer Operations, WorkCover Corporation of South Australia, Adelaide Azzopardi, Sonny – Director Operations, Tasmanian Chamber of Commerce and Industry, Hobart Baker, Philip – Tasmanian State Secretary, Australian Manufacturing Workers’ Union, Hobart. Balcombe, Leonie – Vic? Barton, Philip – union Tas? Beadnall, Geoff – Senior Consultant Community and Business Services Team Workplace Services, Department for Administrative and Information Services, South Australia Blake, Paul – Industrial Organiser, CPSU, Hobart Tasmania Bowen, David – General Manager, Motor Accidents Authority of New South Wales Brown, David – Manager Workers’ Compensation Business and Systems, WorkCover Corporation of South Australia, Adelaide Brown, Dr Denise – Principal Policy Advisor, Workplace Standards Tasmania, Rosny Park Bryant, RJ - Trades Hall, Western Australia Bull, Helen – Manager Policy and Coordination Group, ComCare Australia, Canberra ACT Butcher, Cathy – Occupational Health and Safety Officer, Victorian Trades Hall Council, Carlton South, Victoria Carey, Martin – Queensland? 443 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
Carey, Ron – Research Consultant Policy and Research Portfolio, WorkCover Corporation of South Australia, Adelaide Carmichael, Mark - Secretariat Executive Manager Recruitment and Consulting Services Association of New South Wales Chellew, Jennifer – Policy Officer Strategic Policy Branch, Health and Safety Department, Victorian WorkCover Authority, Melbourne Clayton, Alan – Accident Research Center, Monash University, Melbourne Coleman, Ian – member, Utilities Industry Reference Group, WorkCover NSW Coleman, Richard – Manager of Health and Safety, NSW Minerals Council, Sydney Collins, Peter - OHS Consultant Customer Operations, WorkCover Corporation of South Australia, Adelaide Cooke, Anthony – Secretary, Trades Hall, Western Australia Coulter, Stan - WorkCover Corporation of South Australia, Adelaide Crack, Anthony – Senior Industrial Policy Officer, Industrial Relations Policy, Private Sector Industrial Relations, Department of Industrial Relations, Queensland Government, Brisbane Craig, Maureen - WorkCover Corporation of South Australia, Adelaide Crittal, John – Queensland Workplace Health and Safety Act Review, Department of Industrial Relations, Brisbane. Davis, J. Assistant Secretary, Newcastle and Northern Branch, Australian Meat Industry Employees Union. Davison, Teresa – Call Centre Project Officer, ASU Victorian Branch, Melbourne Dertiles, John - WorkCover Corporation of South Australia, Adelaide Dias, Sriyani – Manager of Performance Evaluation Team, WorkCover NSW. Dickson, Julie - The Australian Gas Light Company, North Sydney Doncaster, Nic - OHS Consultant Customer Operations, WorkCover Corporation of South Australia, Adelaide Duncan Debra, Q-Comp, Brisbane Ellis, Sue – Workplace Liaison Officer Customer Support, WorkCover Corporation of South Australia, Adelaide
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Elson, Bert – Manager Vehicle Operations, Department of Infrastructure, Energy and Resources, Tasmania, Hobart Evans, Gwynnyth - Health and Safety Officer, Australian Meat Industry Employees Union, Melbourne Evensen, Catherine – fylkesleder, Norsk Sykepleierforbund, Arendal, Norway Fitzgerald, Lynne – Secretary of the Tasmanian Branch of the Australian Council of Trade Unions, North Hobart Flanagan, Robert – Industrial Officer, Australian Workers’ Union, Tasmanian Branch, North Hobart Foale, Tania – Senior Policy Adviser Workplace Standards Tasmania, Rosny Park Ford, Tina – Health and Community Services Industry Reference Group Co-ordinator, WorkCover New South Wales Fox, Jo – Industrial Officer, Tasmanian Divison of the National Tertiary Education Union, Sandy Bay Fulham, Margaret - NSW Road Transport Association, Sydney Fullerton, Sue – Transport and Storage Industry Reference Group Co-ordinator, WorkCover New South Wales Gallagher, Dr Clare – Industry Strategy Consultant Health and Safety, WorkSafe Victoria, Melbourne Gallant, Mick – industry OHS consultation, WorkCover Corporation of South Australia. Gilroy, Pat – Chief Executive Officer, Mining and Resource Contractors Safety Training Association, Bentley, Western Australia Goldsworthy, Sherree - senior project officer, Legislation and Policy Development, Transport South Australia. Grace, Grace – General Secretary Queensland Council of Trade Unions, South Brisbane Haywood, Gregory – Project Officer Public Sector and Community Services and Inspector, WorkSafe Victoria, Melbourne Hazard, Maryann - Industrial Officer, Australian Workers Union New South Wales, Sydney Heneker, Derek – Senior Project Officer Smart Compliance, Transport South Australia, Adelaide Hollis, Susanne – Retail Industry Reference Group Co-ordinator, WorkCover New South Wales 445 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
Hosking, Emma - Manager Policy and Research Portfolio, WorkCover Corporation of South Australia, Adelaide Hryce, Michel, Secretary, Media Entertainment and Arts Alliance, NSW Branch, Sydney. Hyam, Steve – General Manager, Workplace Standards Tasmania, Rosny Park Iland, Rod – National Electrical Contractors Association NSW, Sydney Imber, David – Senior Policy Officer Strategic and Economic Analysis, Victorian WorkCover Authority, Melbourne Jones, Trevor – Strategic Policy Coordinator Policy and Research Portfolio, WorkCover Corporation of South Australia, Adelaide Jury, Indra - Industry OHS Consultant Customer Operations, WorkCover Corporation of South Australia, Adelaide Kandelaars, Gerry - Branch Secretary CEPU T&S Branch South Australia/Northern Territory Karlis, George - Industry OHS Consultant Customer Operations, WorkCover Corporation of South Australia, Adelaide Kempster, Sarah – National Workers’ Compensation Manager, Metcash Trading Ltd, Blacktown NSW Kernich, David – Project Manager Policy Implementation, Transport South Australia, Adelaide Kingham, Megan - The Australian Gas Light Company, North Sydney Kolan, Rick -, WorkCover New South Wales Lambkin, Graeme - Consumer Services and Utilities Industry Reference Groups Co-ordinator, WorkCover New South Wales Lamm, Felicity – Department of Management, University of Auckland, New Zealand Lee, Kit – Industry OHS Consultant Customer Operations, WorkCover Corporation of South Australia, Adelaide Levinson, Hugh – Project Manager, Transport South Australia, Adelaide Loechel, Kay - OHS Consultant Customer Operations, WorkCover Corporation of South Australia, Adelaide Lyhne, Nina – A/Executive Director Strategy, Department of Consumer and Employment Protection, Government of Western Australia, Perth 446 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
McHugh, Myrna – Senior Statistician, Workplace Standards Tasmania, Rosny Park McCall, Ken – Manager Health Safety & Environment, Australian Gas Light Co, North Sydney McGowan, Gail – A/Director Policy and Education Department of Consumer and Employment Protection, Government of Western Australia, Perth McIntosh, Iain – Auckland, New Zealand Mannion, Marie – Manager Regulatory Leadership ACT WorkCover, Canberra, ACT Miller, Brian – Safety Coordinator Construction and General Division, Construction (NSW Branch), Forestry Mining and Energy Union, Lidcombe Miller, Kelly – Workplace Standards Tasmania, Rosny Park Millikan, Mal – Manager Provider Systems, WorkCover Corporation of South Australia, Adelaide Minnett, T - WorkCover Corporation of South Australia, Adelaide Mitchell, Rose – Manager Customer Operations, and Presiding Officer Mining and Quarrying Occupational Health and Safety Committee, WorkCover Corporation of South Australia, Adelaide Moylan, Peter – OHS Unit, Australian Council of Trade Unions, Melbourne Muldowney, Michael – Senior Project Officer, Best Practices Initiatives Unit, WorkCover New South Wales, Sydney Nieass, Dr Chris – Corporate Manager – OH&S, Sydney Water, Sydney Nossar, Igor – Legal Officer, Textile, Clothing and Footwear Union, NSW Branch, Campsie Page, Sarah – Inspector, UK Health and Safety Executive, London Parkins, Russell – Unit Manager Compliance, Transport South Australia, Adelaide Pearce, Robert – Director Policy, Planning and Services, Workplace Standards Tasmania, Rosny Park Pellham, Natalie – Manager of Consumer and Business Services Team, WorkCover New South Wales, Sydney Pickett, Ray – Manager Rehabilitation and Compensation, Workplace Standards Authority Tasmania, Rosny Park Plummer, John – Recruitment and Consulting Services Association of New South Wales, Sydney 447 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
Pope, Gregory - ComCare Australia, Canberra ACT Pugsley, Robert – Manager Operations and Investigation Group, Regulatory Services Division, ComCare Australia, Canberra ACT Quinn, Steve – Co-ordinator Mining & Construction Industry Reference Groups. WorkCover NSW Ricci, Peter - Research Consultant Policy and Research Portfolio, WorkCover Corporation of South Australia, Adelaide Rositano, Joe – Manager Industry Development and Planning, Transport South Australia, Adelaide Rudgforth, Anita – Vic? Sax, Michael – Group Manager Statutory Claims, WorkCover Queensland, Brisbane Seljak, Rob – General Manager, Queensland Division of Workplace Health and Safety, Brisbane Sciberras, Marlyn Co-ordinator Meat Industry Subgroup of Consumer Manufacturing Industry Reference Group, WorkCover New South Wales Shanks, Ron – project manager, Policy Implementation – Road Transport Reform Team, Transport South Australia, Adelaide Shaw, David – Manager Occupational Health and Safety, Australian Chamber of Commerce and Industry, Melbourne. Shaw, Robin – Manager Self Insured Operations and Systems, WorkCover Corporation of South Australia, Adelaide Shirley, Martin – Director-Information and Workers’ Compensation, Workplace Standards Tasmania, Rosny Park Short, John – National Organising Unit Coordinator, Australian Manufacturing Workers’ Union, National Office, Granville NSW Sipp, Ermil – Manager of the Compliance Improvement Branch, WorkCover NSW. Spann, David - Queensland Spotton, Benjamin - WorkCover Corporation of South Australia, Adelaide Soden, Alison - Health & Safety Analyst, The Australian Gas Light Company, North Sydney Stabile, Mel - WorkCover Corporation of South Australia, Adelaide 448 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
Strauss, Maureen – Executive Officer to the WorkSafe Western Australia Commission Stringer, Craig – Industrial Officer, Health and Community Services Union Tasmanian No.1 Branch, North Hobart, Tasmania Swincer, Margaret - WorkCover Corporation of South Australia, Adelaide Thompson, Wendy – Senior Associate, Freehills, Sydney Tolotta, Kim – Strategic Manager Corporate Project Integration and Stakeholder Relations, WorkCover Corporation of South Australia, Adelaide Tooma, Michael – Andersen Legal, Sydney Tullgren, Peter – union Tas? Tucker, Eric – Osgoode Hall Law School, York University, Toronto, Canada. Underhill, Elsa – Senior Lecturer, Victoria University of Technology, Footscray Versteegen, Richard – Manager Small Business Program, WorkSafe Victoria, Melbourne Wakefield, Ian – union Tas? Waters, Frances – WorkCover NSW, Sydney Wight, Nikki - Small Business Project Coordinator BE SAFE WorkCover Corporation of South Australia, Adelaide Williams, Graeme – Manager Advocacy and Prosecutions, Workplace Standards Tasmania, Launceston Wilson, Jamie - Industry OHS Consultant Customer Operations, WorkCover Corporation of South Australia, Adelaide Wood, Cath – Queensland? Yaager, Mary – OHS Co-ordinator, Labor Council of New South Wales, Sydney Yardley, Robin - OHS Consultant Customer Operations, WorkCover Corporation of South Australia, Adelaide
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Appendix 1 Semi-structured Interview Schedule Used in Project The project is interested in the OHS/workers compensation effects of changing employment arrangements and programs addressing this. Specific examples of the types of arrangement we are interested in include: • • • • • • • • • •
Casual/temporary/fixed contract jobs Part-time employment Job insecurity/downsizing/restructuring Self-employment/micro small business Labour leasing/labour hire Outsourcing/subcontracting arrangements Home-based work & transient workplaces Telework/telecall center work Multiple job-holding Other?
We would appreciate your views on: •
The extent of temporary employment, labour leasing and similar arrangements within the jurisdiction or industry with which you are familiar?
•
Any additional/special OHS problems associated with these arrangements, including o Injury rates, hazard exposures, psychological stress o Induction, training and knowledge of OHS risks o Knowledge and compliance with OHS legislation o Worker knowledge of and access to workers’ compensation o Rehabilitation and the provision of occupational health services?
•
Existing remedies/solutions or interventions designed to address these problems including, o New guidance material or other regulatory interventions o Industry or collaborative initiatives such as subbiepack in the construction industry o Employer initiatives (eg special induction/training programs, contractor control systems etc) o Union initiatives (eg collaborative solutions with employers, policies, negotiations etc)?
•
Areas where you feel more attention is needed by agencies, employers or unions (for example temporary work)?
•
Other issues you wish to raise in connection with changing employment relationships?
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Appendix 2 Subject Ethics Approval Document Approval No:HREC01260
THE UNIVERSITY OF NEW SOUTH WALES PARTICIPANT INFORMATION STATEMENT AND CONSENT FORM (Title of project: Developing Strategies to Address OHS and Workers Compensation Responsibilities Arising From Changing Employment Relationships) You are invited to participate in this project that seeks to identify strategies to assist employers systematically manage OHS and workers’ compensation regardless of the type of employment relationship eg labour hire, outsourcing, contracts. Another aim of the project is to assist workers who may not have conventional working arrangements (eg telemarketing workers and mobile contractors) to have a safe and healthy workplace, and to better understand their entitlements in relation to injury management and workers’ compensation. You were selected as a possible participant in this project because you work in a government agency responsible for administering OHS or are a union peak council or employer/industry association representative responsible for OHS. If you decide to participate, you will be asked to participate in a semi-structured interview. We estimate that it will take approximately 45 minutes to do. With your permission, the interview will be taped to assist the researchers to interpret your responses and those of other participants. Any information that you provide in the interview that can be linked to you will be confidential and will be disclosed only with your permission or as required by law. If you give us your permission by signing this document, we plan to discuss and publish the results in a report of the overall findings prepared for WorkCover New South Wales, which commissioned and is funding the project. We shall also prepare papers for scientific publications in academic journals. A summary of the findings will be prepared for participants in the research and please do not hesitate to request this information from the researchers (see contact details below) if you are interested. In none of these publications will information be provided in such a way that you or your employer could be identified. Your decision to participate or not will not prejudice your future relations with The University of New South Wales. If you decide to participate, you are free to withdraw your consent and to discontinue participation at any time without prejudice. Please do not sign this form if you are unable to understand it. If you have any questions about the project, please ask Dr Claire Mayhew or Professor Michael Quinlan (02 9385 7149) at The University of New South Wales. Complaints about this project may be directed to the Ethics Secretariat, The University of New South Wales, UNSW SYDNEY 2052 AUSTRALIA (phone: 9385 4234, fax: 9385 6648, e-mail
[email protected]). A copy of this form is attached for you to keep
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THE UNIVERSITY OF NEW SOUTH WALES PARTICIPANT INFORMATION STATEMENT AND CONSENT FORM (continued) (Title of project: Developing Strategies to Address OHS and Workers Compensation Responsibilities Arising From Changing Employment Relationships)
You are making a decision about whether or not to participate. Your signature indicates that, having read the information provided above, you have decided to participate.
..................................... Signature of subject
..................................... Signature of witness
.....................................
.....................................
Please PRINT name
Please PRINT name
..................................... Date REVOCATION OF CONSENT I hereby wish to WITHDRAW my consent to participate in the research proposal described above and understand that such withdrawal WILL NOT jeopardise my relationship with the University of New South Wales.
Signature
Date
Please PRINT Name
If you wish to withdraw from the study, this Revocation of Consent should be forwarded to: Professor Michael Quinlan School of Industrial Relations and Organizational Behaviour The University of New South Wales UNSW Sydney NSW 2052.
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Appendix 3
Workplan and Anticipated Outcomes “Developing strategies to address OHS and workers’ compensation responsibilities arising from changing employment relationships” IPE&R Grants Commissioned Research
ANTICIPATED MAJOR OUTCOMES The final report from this project will: • identify strategies that assist all types of employers to systematically manage OHS and workers’ compensation, regardless of the type of employment relationship that exists •
assist employees who do not work under conventional working arrangements to have a safe and healthy workplace, and to understand their entitlements in relation to injury management and workers’ compensation. PROJECTED OUTCOMES
Detailed general information, data, and recommendations to reduce the risks in particular ‘at risk’ employment situations will be provided, including: 1. An overview of the range of working arrangements and employment relationships in existence in Australia and likely future developments with regard to particular categories (such as small business employment, temporary employment, self-employment etc) on the basis of existing trends. 2. An overview of the OHS, workers’ compensation, and injury management implications and consequences that arise in different employment relationships. The implications will be evaluated not only with regard to prevention (incidence of injury/disease, levels of OHS knowledge and compliance behaviour etc) but also in terms of injury disease identification and reporting, workers' compensation knowledge and claims behaviour as well as injury management/rehabilitation. 3. A review of national and international OHS and workers’ compensation legislation, with particular attention to evaluation of initiatives that address changing employment relationships. This review will consider policies/issues associated with administering the legislation (such as the determination of eligibility of claimants and who is the responsible employer in relation to workers' compensation claims by certain categories of workers liked those under subcontracting, labour-leasing arrangements or home-based/teleworkers). 4. Evaluation of the value of international initiatives, and assessment of their applicability to OHS, workers’ compensation, and injury management in NSW in the context of the Occupational Health and Safety Act 2000, the draft OHS Regulation 2001, and the Workers Compensation Legislation Bill 2000. 5. Policies, strategies, and interventions will be recommended to better adapt regulatory and nonregulatory OHS management systems to changing employment relationships. Evidence suggests some changes to employment relationships pose a particular challenge to OHS management systems (for example, the presence of large numbers of temporary workers can make risk identification or the maintenance of OHS training standards more difficult). Given the increasing focus on OHS management systems by both regulators and employers, it is especially critical that these systems adapt to the use of subcontractors, temporary workers and the like. 6. Recommended initiatives will be applicable to all industry sub-groups and occupations 453 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
7. Particular attention will be paid in our analysis to small-scale, self-employed, and atypical employment situations (we have significant proven previous expertise here e.g. with outworkers) 8. Recommended initiatives will not compromise the compliance and enforcement roles and capability of WorkCover NSW 9. Recommendations will integrate injury prevention and management systems. 10. Recommendations will not prescribe any particular OHS management system or audit tool, but will rather focus on the contexts within which OHS management systems work best, and ways in which they need to be adapted in particular employment situations. For example, we will evaluate the variable impacts of the European Framework Directive 89/391 in different regulatory regimes. 11. Recommendations provided will enhance the ability to measure outcomes and performance against set criteria for a range of different employment relationship situations. 12. None of these recommendations will restrict competition (in some areas remedies that promote a more level playing field will arguably enhance competition and its benefits to the community). 13. Recommendations will be based on proven results, for example, by reference to the (as yet unpublished) small business evaluation study across 7 EU member countries conducted by our colleague Dr David Walters of SouthBank University in London. Proven results from other studies will also be documented. Specific features of our recommendations will include: • Regulatory initiatives, strategies and administrative/compliance practices (including the use of economic incentives) that are applicable to OHS risk management, injury prevention and management and workers’ compensation/rehabilitation in NSW • Identification of the likely outcomes of the recommended regulatory initiatives and other strategies, with a particular emphasis on practical effects. • Identification of the methodology utilised when particular initiatives have been measured, including the performance indicators and benchmarks applied • Identification of particular factors influencing successful implementation of initiatives (again there may be useful information to be gleaned from the EU study in progress). • Applicability of initiatives to particular industry sectors and specific employment relationships. For example, there may be lessons from successful control of risks in the small-scale housing section of the building industry where sub-contracting has been widespread for decades. These lessons may be applicable to other industry sectors where outsourcing is only in early stages of implementation. • Evaluation of the comparative effectiveness of different strategies, for example, across different employment relationships in different industry sections (e.g. manufacturing vs. hospitality) and in different areas (e.g. urban vs. rural).
DETAILED DESCRIPTION OF PROJECT METHODOLOGY The consultants have designed the project to ensure the most recent and high quality data and information are integrated, relevant lessons from interventions in other countries are identified, and the most up-to-date strategies are evaluated in the context of the NSW regulatory framework. The project will include: • accessing the most recent accurate information about changes in the Australian labour market (e.g. proportions of the workforce that are casual, subcontract, contract, or owner/managers of small-scale enterprises etc) utilising ABS and other surveys • interrogating up-to-date Australian data from a range of sources on work-related injuries, including estimates of severity and incidence by both industry/occupation and employment status. This process is likely to include accessing workers’ compensation claims information through the 454 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
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National Data Set (NDS), return to work monitors, hospital admission data, collated insurance claims, the ABS and other surveys. The accuracy of current work-related illness data will also be evaluated. assessing the relevance of international data on OHS indices for different employment status groups. For example, the HSC recently estimated that employers report around 46% of non-fatal injuries to their employees under RIDDOR, but the figure is under 5% for the self-employed (HSC, 2001:1). Identifying policy gaps: there are significant repercussions for effective policy development in OHS jurisdictions when workers are employed under various employment relationships e.g. casual, contract/subcontract, outsourced, or other employment situation. Inadequacies may arise because of: strategies based on inaccurate OHS data inappropriateness of preventive interventions developed for large enterprises that are applied to smaller organisations potential externalisation of OHS injury treatment costs away from compensation schemes towards other state and federal agencies, such as the health care system non-recognition of long-latency work-related diseases and chronic injuries increased demands on the OHS Inspectorate if changes in the labour market lead to more widely dispersed smaller scale worksites. For example, self-employed house builders work in a sector characterised by constantly changing sites, frequent and severe injuries, and low levels of workers’ compensation insurance coverage. Access of the Inspectorate to homes where outworkers labour may also pose legal difficulties temporary or mobile worksites, or home-based worksites which present particular logistical problems in terms of compliance Evaluation of the appropriateness of alternative intervention strategies that do not compromise regulatory compliance or the effectiveness of the NSW regulatory framework. For example, OHS management systems have been widely adopted in the different member states of the EU since the passage of the European Framework Directive 89/391. The different regulatory regimes and contexts have led to variable outcomes for sectors of the workforce operating under different employment arrangements. Similarly, in the USA, there have been a number of assessments of the effectiveness of OHS management systems on large-scale construction sites where extensive vertical and horizontal subcontracting was used, for example the Boston harbour tunnel and the new Denver airport. There are lessons for the NSW construction industry that may assist with controlling fatalities and injuries in this high-risk industry sector. Identifying alternative workers’ compensation insurance initiatives that have particular applicability to a range of employment status groups currently without coverage, including the respective role of economic incentives and deeming provisions. Identifying and evaluating remedies (such as the Office of Worker Advocate model used in Canada) to assist workers who find it hard to obtain information and make claims due to their employment status. Identifying changes to injury management and rehabilitation procedures to better meet the special problems posed by temporary or transient workers, contractors and the like. Recommendations provided will enhance measurement of outcomes and performance against set criteria for a range of different employment relationship situations identify key inadequacies in injury recording identify key inadequacies in illness/disease recording for particular groups, identify more appropriate marketing strategies to enhance workers’ compensation coverage by the self-employed, contractors, outworkers, etc suggest more appropriate means to manage work-related injuries and illness in each target group suggest mechanisms by which premiums can be efficiently and economically collected 455 --
Developing Strategies to address OHS and workers' compensation responsibilities arising from changing employment relationships
regulatory, policy, and strategy initiatives that may improve work-related injury and illness prevention, management and compliance appropriate monitoring and evaluation strategies for the recommended initiatives for improving OHS amongst workers in various employment situations.
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