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Australia’s Fair Work Ombudsman has launched a campaign to randomly audit metropolitan and regional councils to ensure procurement decisions are not undermining compliance with federal workplace laws.
It is a part of a wider campaign called the Local Government Procurement Initiative, where the Fair Work Ombudsman has teamed up with the Australian Security Industry Association Ltd. (ASIAL) and the United Voice union since May 2014 to educate councils about their workplace obligations.
Under the plan, these organisations have pledged to strengthen the procurement practices of local councils, starting with how they procure security services from the private sector.
The big problem that the Office of the Fair Work Ombudsman and its partner organisations have identified is that although councils need to get value for money when procuring services, they shouldn’t be making procurement decisions based on price alone.
According to the Ombudsman, “focussing on getting security services for the lowest price is resulting in a race to the bottom among some security providers, who cut costs to stay competitive”.
Consequently, employees take a hit to the hip pocket through underpayment or wages or misclassification as ‘independent contractors’.
Fair Work Ombudsman Natalie James said it is important that councils understand that when they sign low-cost contracts to buy in security services, they are not contributing to the underpayment of employees working for their sub-contractors.
“Contracting out labour is a legitimate approach to doing business, but councils need to consider whether their procurement processes and subsequent governance of those arrangements create an environment where workers are open to exploitation,” Ms James said.
ASIAL chief executive Bryan de Caires said the campaign will benefit security service providers who are complying with workplace laws by helping to create a level playing field.
“If the price is too good to be true, it probably means somebody is not compliant with workplace laws,” he said.
He said operators who are gaining unlawful and unfair competitive advantage are profiting at the expense of the workers and the legitimate operators who are doing the right thing.
United Voice national president Jo Schofield said the campaign will benefit the many security industry employees who rely on minimum award entitlements.
According to the Fair Work Ombudsman, the investigation is expected to take a year to complete, with a report on the outcomes anticipated by August 2016.
This is not the first audit of its kind, as the Fair Work Ombudsman audited over 300 security businesses in 2009 as part of a national campaign and found that less than half were compliant with workplace laws.
A follow-up campaign in 2012 revealed a “significant improvement”, with 75 per cent of the 392 businesses audited found to be meeting their obligations.
