Contract work and Labour Hire

You’ve probably heard about casual work and how it’s becoming more widespread. This is a big issue for young people in the workplace.

But have you heard about labour hire and outsourcing? This is where casual and contract staff members are hired out to work for other employers – confused? Let’s look at how it works.

Toll workers picket in Melbourne over labour hire issues

“In 1984 just 15 per cent of the Australian workforce was employed casually. Today it’s 40 per cent.”

Casual employment means that the employer employs and pays a worker when there is work for them to do, and there is no sick leave, annual leave or guarantee of work or regular hours. In place of this, employees are paid a higher hourly rate than if they were full or part time.

Some companies have taken it a step further and given the job of hiring staff to other companies (known sometimes as labour hire firms).

Let’s use a real example to make the point. Until recently a major supermarket chain employed 450 employees at two Melbourne stock warehouses. Most of these people had full time permanent jobs moving around the food that ends up on our tables.

The supermarket decided it could do the job cheaper by having only one warehouse and ‘sold’ the distribution to another company.

So the 450 employees had a new employer, although they mostly did the same job.

But then the new company made all the full-time workers redundant, and employed 20 per cent of the workers on casual contracts, with the other 80 per cent of the workforce made up of labour hire.

This was a big change for the 450 employees – a change they weren’t expecting and didn’t have a say about. It also meant that many people went from having a full time job with some security to working for a labour hire company as a casual.

So it’s tricky. These employees help put get the food to your supermarket, yet they aren’t employed by the supermarket or even the distribution company – but a labour hire firm.

Regulation of the labour hire industry is still being developed and there have been a number of cases of worker exploitation by labour hire firms in recent years.

Australian Curriculum Links:

Work Studies/Year 9/Career and life design: The nature of work
Describe the nature of work in Australia and the implications for current and future work opportunities.

Work Studies/Year 9/Skills for learning and work: Work skills
Investigate a wide range of occupations, and the skills and personal qualities required in these fields.

Work Studies/Year 10/Career and life design: The nature of work
Investigate the relationships between work cultures, work arrangements and the individual.

Work Studies/Year 10/Career and life design: Gaining and keeping work
Explain how diverse work arrangements are impacting on the rights and responsibilities of employers and workers.

Relevant Resources

First Job, Pay, Rights at work, Uncategorized
9: Getting paid!
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Equality, Pay, Rights at work
The gender pay gap
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Young worker blows the whistle on underpaid staff
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