Submission to the Victorian Inquiry into Labour Hire Industry & Insecure Work

This submission is from the Communication Workers Union

Postal & Telecommunications Branch.

1. Our union has coverage of all employees and independent contractors

working in the postal industry in Victoria . We also have a much smaller

number of members who work in Telecommunications, mainly in the

Telstra Customer Field Workforce.

2. We support the submission made by our sister union-

the Telecommunications & Services Branch in relation to insecure work

in the Telecommunications Industry.

Postal & Telecommunications Branch of Victoria Division of the CEPU

PO Box 1052 North Melbourne Vict oria 3051

Ph: (03) 9600 9100 Fax: (03) 9600 9133 Web Site: www.cwuvic.asn.au Email: office@vicpt.cepu.asn.au

3. This submission is in relation to head-contractors and their employees or sub-contractors

who perform work for Australia Post either delivering letters or parcels or both. While there

are also casual staff, agency staff and fixed-term employees working for Australia Post their

terms of employment are reasonably well-regulated and their remuneration is fixed by the

Australia Post Enterprise Agreement negotiated by the union. (See enclosed Attachment 1-

clauses 7 from the Australia Post Enterprise Agreement 2013.) While the union always

attempts to gain permanent work and to improve conditions for these temporary workers,

the problems in the 'contracted out' areas are far worse.

Background

4. There are various types of jobs contracted-out in Australia Post. Under the current CEO,

more and more jobs at higher levels are being contracted-out. Managers have been on

contracts for many years, but now Administrative Officers at a Level 6 are being turned into

contract managers with the main difference being they lose the protection of the Enterprise

Agreement and guaranteed job security, pay-rises and better superannuation although

receive better immediate pay and higher incentive bonuses. The union and its members

oppose these changes but our main concern has been with the poorly-paid lesser skilled

workers.

5. On the urban fringes and in country areas, Australia Post has contracted out several hundred

postal delivery officers' jobs. The country jobs used to be Road-Side Delivery jobs servicing

sparsely populated areas and these have been contracted out for many years, and have

mostly been subject to public tender. Over time however Australia Post have attempted to

contract out built up rounds or Street Mail Delivery rounds that are of a similar nature to

existing 'postie' jobs. This has simply been a cost-cutting exercise, and the pay and

conditions and safety are very inferior. (See case-studies in Attachment 2).

6. The other main contracted- out area is in the parcel delivery area.

Australia Post contracted out the delivery of parcels in 1999 in Victoria. This work had

previously been performed by corporate staff on wages set by enterprise bargaining.

There are now approximately 1300 head contractors in Victoria alone. These head

contractors often employ several other 'sub-contractors' or employees.

(See Attachment 3 - outlining the number of insecure workers in Austral ia Post.)

Issues

7. Remuneration, working conditions and the safety of the parcel drivers is largely unregulated.

Australia Post is a 206 year-old corporation with a dominant market-share in parcel delivery

particularly in the outer suburban, regional and rural areas of Australia. The 'head' or

'principal' contractors have minimal bargaining power with Australia Post, and the actual

drivers employed by these contractors have none at all. The terms of the contract Australia

Post uses for the principal contractor provide few rights and the dispute resolution clause is

totally inadequate. The contract requires the principal contractor to comply with all

'legislation and regulations' but until very recently, there has been virtually no attention to

auditing what is actually happening in practice. (See attachment 4- the standard Australia

Post parcel contract)

8. There are no consultation or appeal processes within Australia Post for the head-contractors

or their drivers.

9. There is definitely a supply chain problem with Australia Post paying inadequate rates in

many cases, and in other cases the head-contractor is squeezing vulnerable workers like

short-term overseas visa holders or recent migrants to take low rates of pay.

10. Conditions have developed 'willy-nilly'. Originally, there was a predominance of owner­

drivers with one person operations, and a few head-contractors who employed one or two

others, often family members. There has been a concentration of contracts over time with

an increase in the size of individual operations and a growth in the number of companies

employing dozens of drivers with the largest being between 60 -100 drivers. Originally most

drivers worked on verbal contracts but in recent times there has been a proliferation of

unfair written contracts purporting to be 'sub-contracting' arrangements. (Attachment 5 - a

couple of examples of these sub-contracts.)

11. It is not uncommon for 'head contractors' to 'go broke' and for Austral ia Post to then assign

their contract to another person on the same rate.

12. There is widespread confusion about which drivers are more properly described as

'employees' and which are 'sub-contractors' .

13. This has allowed many poor employment practices to thrive. A system of piece rates has

developed whereby drivers are paid a 'per parcel' rate . This is very widespread through

Victoria. It is rare for drivers to work on hourly wages. This piece rate often does not equate

to the minimum wage under the Road Transport Distribution Award or the proposed

Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 being

contemplated under the Road Safety Remuneration Tribunal.

14. This piece rate system has led to 'primary-sorting' (i.e. the sorting of parcels into individual

rounds or runs) being performed for free. This often takes two to three hours per day. The

drivers then sequence the parcels into their rounds and scan thei r parcels before delivery.

This again is consumed into the per parcel rate. As Australia Post has consol idated the

parcel drivers into larger centres the driving time back to the local delivery area is again in

most cases covered by the parcel rate .

15. Based on the union's interviews with member drivers and others the most common 'per

parcel rate' is around $1.10 per parcel if the 'head contractor' provides the delivery van

and $1.25 per parcel if the driver has his own van. Some drivers simply providing their

labour have been forced to accept as low as 80 cents or 95 cents per parcel. Many of the

drivers using vans owned by the ir 'employers' are forced to pay for fuel, tyres, services,

repairs and excess if they are in accidents. It is also clear that the 15 cents extra per parcel

paid to drivers who provide their own vehicle does not fairly compensate for the cost of

providing a one-tonne van.

16. It is easily seen that this rate (even in high or medium density residential or business areas)

cannot provide a liveable wage. There needs to be detailed consideration of what are fair

parcel sort and delivery rates in a variety of residential densities. (See Attachment 6- an

outline of pay & conditions of 'subbies' working for one head- contractor in an outer

suburb.

17. It is our experience that only a minority of workers in this sector are in receipt of

Superannuation payments and many are not covered by workers' compensation. There are

no attendance books, very little awareness of industrial relation matters, and occupational

health and safety and there is significant tax avoidance I evasion.

18. Many drivers work long hours to make enough to live on. Drivers can start work at 4am and

then continue to work until 5pm or longer. The practice of having to clear all the parcels that

arrive for delivery on the day regardless of how many there are, leads to the working of

'forced over-time' without the compensation of over-time rates of pay. There are many

pressures to work faster and not safely, as there are set times for taking undeliverable

parcels back to post offices before they close, for collection for customers who were not at

home to receive them.

19. Work Health Safety on the job is rudimentary even though Australia Post require WHS plans

from the head contractor. In practice, most sequencing of parcels is done literally 'on the

ground' despite the obvious manual handling risks. Inside the sorting facilities, forklifts, vans

and pedestrians intermix and traffic management plans often leave a lot to be desired. The

size of parcels have increased significantly while the prices have remained static or have

been reduced. There are no Safe Operating Procedures or Risk Assessments for how parcels

over 16 kgs (e.g. wine and boxes of paper or books) are to be sorted and delivered by

contractors, even though this is well regulated for corporate staff.

20. Most drivers have no access to paid or unpaid periods of leave and many have told the union

they have been forced to come to work even though they are ill. Although Australia Post

expect head contractors to have 'contingency plans' it is difficult and expensive to have

relief drivers so they are few and far between. The union has intervened in a number of

cases where drivers have been terminated because they have had to take sick leave. The

union has been informed of a driver who was initially refused a day off to get married. The

union organisers regularly meet drivers who have not had a holiday for several years.

21. It has been very hard to contact and organise these workers (they don't have tea-breaks and lunch-breaks in lunch-rooms), and Australia Post have managed to keep their pay and conditions hidden by relying on the three way relationship whereby they claim these are the responsibility of the head contractors.

22. This system has now been held up to scrutiny because the union referred one of the larger contractors- Oz Trade & Services- to the Australian Federal Police who have now charged them with numerous offences. As part of Australia Post's damage control, Ken Lay & Allen's Lawyers were appointed to investigate Australia Post's involvement with this contractor and are due to report soon. The union pointed out that this company was not the only ones using overseas student labour outside of visa requirements and underpaying workers.

23. Three very large head contractors have been given 90 days' notice, mainly it seems because of lack of sub-contract arrangements with their workers.

24. Australia Post insists that these workers are the responsibility of the 'head contractors' but the union sees it as sham-contracting. The control over the job lies solely with Australia Post. If a parcel driver commits a misdemeanor e.g. a wrong delivery or does not obtain a signature on delivery or has parcels stolen from his van, Australia Post will issue the 'head contractor' with a withdrawal of that driver's authority to deliver. There is no appeal system, unlike that available to corporate staff who have a formal Employee Counselling and Discipline Policy and access to an internal Board of Reference before being able to access the Fair Work Commission.

25. Australia Post will regularly dictate changes to the work practices. For example, Australia Post decided to introduce a consignment price for multiple parcels being delivered to the same location. They will pay, for instance $1.60- $1.90 for the first parcel and then only 30-50 cents for each of the rest of the parcels in a consignment. This is regardless of size of the parcel or the difficulty of delivery or whether this necessitates an extra trip to the depot. Australia Post has decided that they want to deliver on the four weekends before Christmas this year to be able to deal with peak workloads so the parcel drivers are told they have to work 6 days a week without an increase in the parcel rate. Some years this has been for 7 weekends before Christmas. If contractors complain they are reminded about the 90 days clause- that they can be terminated for any reason with 90 days' notice.

Remedy

26. The union has tried all sorts of approaches to improve the pay and conditions of individual members as well as trying to get Australia Post to the negotiating table. We have used conciliation in the Fair Work Commission. We have chased under-payments for 'subbies' I employees in the Magistrates Court, and the Federal Court. We have also availed of mediation with the Small Business Commissioner under the Owner-Drivers Act.

We are now investigating running a dispute under the Road Safety Remuneration Tribunal, and we believe it would be of great advantage if the proposed Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 was finalised and applied to this part of the road transport industry. This would seem to deal with the supply chain problems. The issue of whether workers are 'employees' or contractors would not have to be a threshold issue before deciding jurisdiction and entitlements.

This group of workers do not have the time or money to last out lengthy lega l contests. This is obviously a minimum position. We would support legislation to extend basic employment rights to these classes of workers.