The OHS regulatory challenges posed by agency workers: evidence from Australia
| Published date | 01 May 2006 |
| DOI | https://doi.org/10.1108/01425450610661243 |
| Pages | 273-289 |
| Date | 01 May 2006 |
| Author | Richard Johnstone,Michael Quinlan |
| Subject Matter | HR & organizational behaviour |
The OHS regulatory challenges
posed by agency workers:
evidence from Australia
Richard Johnstone
Socio-Legal Research Centre, Griffith Law School, Griffith University,
Nathan, Australia, and
Michael Quinlan
School of Organisation and Management, University of New South Wales,
Sydney, Australia
Abstract
Purpose – The purpose of this research is to analyse the problems for occupational health and safety
(OHS) regulators posed by agency work/leased labour (also known as labour hire in Australasia),
using Australian evidence.
Design/methodology/approach – The analysis is based on an examination of prosecutions
involving labour hire firms along with other documentary records (union, industry and government
reports and guidance material). The study also draws on interviews with approximately 200
regulatory officials, employers and union representatives since 2001 and workplace visits with 40 OHS
inspectors in 2004-2005.
Findings – The triangular relationship entailed in labour leasing, in combination with the temporary
nature of most placements, poses serious problems for government agencies in terms of enforcing OHS
standards notwithstanding a growing number of successful prosecutions for breaches of legislative
duties by host and labour leasing firms.
Research limitations/implications – Research to investigate these issues in other countries and
compare findings with those for Australia is required, along with assessing the effectiveness of new
enforcement initiatives.
Practical implications – The paper assesses existing regulatory responses and highlights the need
for new regulatory strategies to combat the problems posed by labour.
Originality/value – The OHS problems posed by agency work have received comparatively little
attention. The paper provides insights into the specific problems posed for OHS regulators and how
inspectorates are trying to address them.
Keywords Labour, Recruitmentagencies, Occupational healthand safety, Employment, Australia
Paper type Research paper
Introduction
Labour leasing or temporary agency work refers to the practice whereby workers
engaged by a third party firm (as an employee or independent contractor) are supplied
to undertake tasks for other “host” employers on a temporary basis. A variety of terms
are used to describe leased workers, some specific to a particular country or industry,
including labour hire, body hire, agency workers, on-hire workers, temps, top-up team
and peak period people.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0142-5455.htm
The authors would like to express their thanks to Greg Dale for his research assistance.
OHS regulatory
challenges
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Employee Relations
Vol. 28 No. 3, 2006
pp. 273-289
qEmerald Group Publishing Limited
0142-5455
DOI 10.1108/01425450610661243
In industries like construction and agriculture the use of “body hire” agents can be
traced back more than 100 years. Nonetheless, over the past 20 years labour leasing
has expanded dramatically in Europe, North America and Australasia in terms of the
number of firms supplying labour, the number of workers supplied and the range of
occupations involved (encompassing everything from labourers and clerical staff to
drivers, miners and skilled professionals like nurses and engineers). Numerous small
operators characterise the industry, but some firms, like Manpower and ADECCO,
operate globally and are major employers in their own right.
While it appears that most temporary employees are still hired directly by their
employers, agency workers represent an increasingly significant component of the
contingent workforce. As far as we are aware, the OECD, ILO and other such
international bodies do not produce international data on the prevalence of labour
leasing, possibly due to definitional inconsistencies (such as distinguishing labour
leasing firms from employment agencies and whether to include firms that lease
workers on an informal or occasional basis) and because many countries do not include
agency work in their annual labour force statistics. Nonetheless, available statistics in
the European Union and countries like the USA and Australia indicate that agency
work had grown rapidly to constitute around 5 per cent of the workforce in the USA
(by 1994) and Australia (by 2001) and around two million workers or 1.2 per cent of the
EU workforce by 1999 (Bureau of Labor Statistics, 1995; Storrie, 2002). The growth of
agency labour can be seen as part of a more general shift to contingent work
arrangements in response to competitive pressures associated with globalisation,
public sector reforms that increased the demand for “outside” labour and private sector
downsizing/restructuring.
In the past decade labour leasing has attracted attention from government agencies
and academic researchers (see, for example, Peck and Theodore, 1998; NSW Labour
Hire Task Force, 2001; Storrie, 2002). Leased labour entails a triangular relatio nship
between the worker, the temporary work agency and the host employer Generally the
contractual relationships are between the agency and the worker and the agency and
the host, with no contractual relationship between the host and the worker. These
relationships result in a complex overlap in terms of managing the employment
relationship and workers meeting the expectations of two “masters”, with a conse quent
blurring not only of legal responsibilities for occupational health and safety (OHS) and
other employment conditions “but also the definition, constitution and implementati on
of the employment contract defined in psychological and social terms” (Rubery et al.,
2002, p. 645). Several studies have found that human resource management functions
have been transferred to the temporary work agency, and the use of temporary
workers has been associated with a shift to “hard” human resources practices of
short-term cost-cutting and discipline (Storey, 2001; Connell and Burgess, 2002). Other
studies have examined the wage rates, working conditions and attitudes of temporary
agency workers (Dietz, 1996; Allach and Inkson, 2004).
Labour leasing poses challenges for employment, social security and taxati on laws
because these presume ongoing employment arrangements and the triangular
relationship (between agency workers, their agency and host employers) complicates
regulatory oversight (Vosko, 1997; Stanworth and Druker, 2000). Even within the same
jurisdiction, the allocation of legal responsibilities between the temporary work agency
and host employer can vary according to the legislation establishing specific lab our
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