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Select Committee on Job Security
27/08/2021

DONNELLY, Ms Melissa, National Secretary, Community and Public Sector Union [by video link]

THACKRAY, Mr Nicholas, Workplace Delegate, Community and Public Sector Union [by video link]

VINCENT-PIETSCH, Ms Beth, Deputy Secretary, Community and Public Sector Union [by video link]

WATERS, Mr Alistair, National President, Community and Public Sector Union [by video link]

[10:06]

CHAIR: Welcome. Thank you, Mr Thackray, for joining us. I particularly think it's important that people who are that are doing the work directly also give evidence. I'm going to be very interested in what you've got to explain about how human resources operates in the Public Service or doesn't operate—we will find out. The Community and Public Sector Union has lodged submission 102 with the committee. Would you like to make amendments or additions to that submission?

Ms Donnelly : Not to the submission. Thanks, Chair.

CHAIR: Information on parliamentary privilege and the protection of witnesses and giving evidence to parliamentary committees has been provided to you as part of your invitation to appear. I now invite you to make a short opening statement of no longer than two minutes to allow for questions. At the conclusion of your remarks I'll invite members of the committee to ask questions. Over to you, Ms Donnelly.

Ms Donnelly : Thank you, Chair, and thank you to the committee for the opportunity to appear this morning. We represent people working in the Australian Public Service. Every day Australians rely on the really important work of the Public Service. Its capacity to deliver for the community relies on the Public Service being staffed by highly skilled and knowledgeable career public servants. That's why the Public Service Act provides that the usual form of employment should be ongoing. However, the work of the APS is being increasingly casualised, outsourced and privatised and it's impacting heavily on workers, whilst also eroding the capacity of the APS to deliver the services the community needs.

This insecure work is taking a number of forms. Labour hire is one major factor. I'm joined today by CPSU Workforce Delegate, Nicholas Thackray, who can speak directly to the impacts of insecure labour hire arrangements on workers at the Australian Maritime Safety Authority. The use of long-term casuals in the Public Service is also a major concern, and the ATO is an example of this, and Ms Vincent-Pietsch will be able to speak to that situation. In the largest APS agency, which is Services Australia, we're seeing a combination of these things. Labour hire, casualisation and outsourcing are all combining to erode the permanent workforce of this agency. Mr Waters will be able to speak to those issues in more detail.

Across the APS we estimate that as many as one in five of the total workforce are engaged in insecure labour hire and contractor arrangements. Our estimate, based on AusTender data, is that it's as many as 20,000 labour hire employees. These workers are doing core APS work. Just to give you two examples. In Services Australia compliance work is undertaken primarily by labour hire workers. In the Department of Veterans' Affairs claims processing is undertaken by a workforce which is made up of 50 per cent labour hire workers. On top of labour hire workers, there are also casuals and non-ongoing directly engaged workers in the APS. As at 31 December 2020, there were 17,000 of those workers. Together this makes more than 37,000 workers who are engaged in insecure work. Our submission documents the negative impacts this has on workers, the work that they do and the services that the community receives.

Just to finish up, there are two particular issues I want to bring to the committee's attention. Firstly, labour hire arrangements cost the Commonwealth more than direct APS employment, and there are a number of examples I our submission that detail the impact of those costs, so there's clearly no cost or efficiency rationale. In fact, in the budget the government recently conceded that labour hire arrangements are often less effective and efficient than engaging ongoing staff, but they've failed to fix the problem.

The second issue is that the rampant use of labour hire across the Public Service has implications for public sector workplace relations. Labour hire workers are excluded from Commonwealth enterprise agreements, and the Fair Work Act limits the use of enterprise agreements to regulate labour hire arrangements and employment conditions. This results in a category of workers with no effective access to bargaining and no job security and often being paid less with fewer conditions and fewer rights. In our view, it's unacceptable.

The pandemic has highlighted the extent of insecure work across this country and the damage it causes, and the Commonwealth should be leading the way on a solution. But clearly, in our view, that is not what is happening at the moment. We would like to see the Commonwealth government do more to support secure jobs, and it could and should do so.

CHAIR: Thanks very much for that, Ms Donnelly. I will now hand over, to start off with, for some questions from Senator Matt Canavan.

Senator CANAVAN: Thank you for the evidence. We just heard from, I think, the Australian Public Service Commission—or it might have been the Department of Finance—that, if contracting out or labour hire were not used, it would be likely that you'd end up with excess capacity of staff, especially to deal with issues that are seasonal, like tax, or where there's a need for a surge, as we've seen during the COVID situation. What do you say to the argument that, if we didn't use this, we would end up possibly having too many Public Service employees and obviously then having an unnecessary cost to taxpayers?

Ms Donnelly : Thank you for the question. Our view—and our evidence is outlined in our submission—is that the labour hire workforce is undertaking core APS work. We recently undertook a survey of our members which indicated that 90 per cent saw in their own workplaces core APS work being undertaken by labour hire functions . That includes Services Australia compliance work and Veterans' Affairs processing of claims. In our view, this is not seasonal work; this is core APS work. There are many more examples of that.

The other point I'd make is that the expenditure on labour hire arrangements and temporary personnel over time, based on our own analysis but also that of the Thodey review into the Public Service, shows the huge increase in spending in this space over time, which we think really represents the labour hire workforce undertaking core APS functions, not seasonal dips that may be represented in, for example, the tax office.

Senator CANAVAN: Just to clarify, are you saying there's no role for labour hire at all or it's just too much at the moment?

Ms Donnelly : It's undoubtedly too much. I had the benefit of hearing a little bit of the evidence earlier. In terms of examples like tax time, the reason the Public Service Act creates categories of irregular and intermittent employment is to deal with those kinds of situations. The government and APS agencies have ample opportunity under the Public Service Act to use casual employment correctly for those purposes, but what we're seeing is core Public Service work not just being casualised but being outsourced to labour hire providers at a greater cost to the Commonwealth.

Senator CANAVAN: So you are saying there should be no labour hire use by the Public Service?

Ms Donnelly : I think that the use of irregular and intermittent employment would deal with the kinds of examples I heard from the evidence of Finance and the Public Service Commission.

Senator CANAVAN: Are you saying that all of those seasonal or temporary surge requirements should be met through the casual arrangements, presumably under Public Service enterprise agreements; there should be no contracting out at all?

Ms Donnelly : Yes, I think they could absolutely be met in irregular and intermittent employment arrangements under the Public Service Act. That is the case with a lot of the tax work, and has been for some time.

Senator CANAVAN: That seems like a fairly extreme position. Presumably, there have been longstanding arrangements for the contracting out, especially of IT services, that has occurred under different governments. But you're saying that all of that should end, all of it should be brought in to in-house employment. Is that the CPSU's position?

Ms Donnelly : What I'm saying is that the examples that I heard from the Public Service Commission's evidence and the Department of Finance go to seasonal workloads and surge workforce. We think that the Public Service provides clear categories to deal with that, and it is the case now that that is primarily how the ATO deals with that work. The problem that we see in the Public Service today isn't small pockets of labour hire use; it is widespread labour hire use across a whole range of agencies, including in core functions like the processing of Veterans' Affairs claims—50 per cent of the workforce are in labour hire arrangements.

Senator CANAVAN: It's a question of what should be the objective of the decision-makers in the Public Service. Obviously, the decision to contract out or engage labour hire would generally be made by people within the Public Service, not by ministers or elected officials. Presumably, one of their objectives is to get value for money for what is not their money but taxpayers' money. What's the CPSU's position there? Should the objective be to maximise the value for money for taxpayers, or should it simply be to maximise the amount of secure employment, regardless of the impact on value for money?

Ms Donnelly : The situation we have at the moment is that the ASL cap policy has driven a lot of the use of labour hire arrangements. There are a number of examples in our submission that outline where agencies have given evidence to parliamentary inquiries and questions on notice about that. The evidence of those agencies and the reference I heard earlier to the AMSA example shows that this is not value for money. The agencies themselves admit that they are paying a premium for labour hire arrangements, and that's being driven by the government's average staffing level policy.

Senator CANAVAN: If I refer back to previous evidence—which goes to APS employment, not the contracting out issue; sorry, this is a change of topic—they mentioned that in their surveys 95 per cent of APS employees are happy with the security and stability of their job. Is it the union's position as well that, largely, the security of employment for public servants—and I'm just talking about those contractors, APS employees—is quite good?

Ms Donnelly : Job security and the industrial arrangements in the Public Service is a key factor that does influence people in terms of considering a job in the APS. But the survey and the evidence that was reported on earlier is, of course, of APS employees. It doesn't include the around 20,000 labour hire workers that don't enjoy that job security.

Senator CANAVAN: As I said in my question, I was only talking about APS employees. But, yes, is it your position that the job security of APS employees is pretty good?

Ms Donnelly : Those of our members engaged in permanent ongoing work are very committed to their jobs. They care about what they do and they enjoy the opportunity to serve the Australian community. But they do sit beside a labour hire worker who doesn't enjoy that same security and the same opportunity to advance in their career. So many of them, whilst they may not be worried whether they themselves are in ongoing employment, are worried for the person they're sitting next to.

Senator CANAVAN: Thanks very much.

CHAIR: Thanks very much, Senator Canavan. Now to you, Senator Walsh.

Senator WALSH: Thanks to all of you for being there for us today. I might go to you, Mr Thackray. Could you tell us where you work and what your experience is of your part of the public sector using casual labour hire?

Mr Thackray : Sure thing. If I can, I'd just like to briefly acknowledge that I am speaking on Ngunawal and Ngambri land and acknowledge the traditional custodians of the land I'm working on. I acknowledge that sovereignty was never ceded; it always was and always will be Aboriginal land.

Now, in answer to your question, I work at AMSA Connect, which is essentially a customer service call centre that is part of the Australian Maritime Safety Authority. Essentially, we have four major functions, working there. We have a beacons line, that takes registration for emergency distress beacons, which are life-saving devices. We have an international qualifications line to support qualifications and seafarers who work on foreign- and Australian-flagged vessels. We have a domestic commercial vessels line, which I work in, which assists seafarers with domestic commercial qualifications, as well as commercial businesses on vessels. Then we have a reception or triage line, which assists, basically, the entire organisation by dealing with almost any call that comes into the organisation, varying from cold-callers to people calling in with emergency situations or suchlike incredibly serious issues.

Senator WALSH: How is AMSA using casual labour hire at the moment? Is it for genuine casual work, or is it starting to replace some of the core functions of the work that you just described?

Mr Thackray : That's a very easy question. I've been doing the same job for three years and, as of now, I'm still a labour hire contractor. We do consistent regular work that requires an incredible amount of training; it takes about six months. In the domestic commercial vessel line, of which I can speak with the most experience, it takes about six months of training to get someone fully competent—plus, honestly, a little bit of extra time after that to get you really comfortable in the role, once you've passed training.

Senator WALSH: Could you just clarify who you work for? I missed that in your opening remarks. So you've been a labour hire worker for three years at AMSA?

Mr Thackray : Over three years, yes.

Senator WALSH: Who is the labour hire company that you work for?

Mr Thackray : Currently, I'm working for Manpower. We used to work for Hudson and we were switched over earlier this year.

Senator WALSH: Are there people directly employed by AMSA who do the sort of work that you do as well? If so, is there a difference between the pay for you, working for Manpower, versus the AMSA employees?

Mr Thackray : Yes, we do have some people at the moment who are directly employed by AMSA doing the same role as or a similar role to what I do. I'd just like to note: there are four positions that I'm thinking of, and those actually came about as a direct result of CPSU campaigning. So they weren't available earlier and, as part of the campaigning that we did, we were able to secure those positions. But they're exactly the same. There's no difference between someone who is employed as a full-time AMSA employee and me, basically. We do exactly the same position.

The pay difference: I believe I get paid $33 an hour—obviously that includes the casual loading—whereas if I were directly employed the pay would be offered at, I believe, between $59,000 and $66,000 a year, depending on experience. Off the top of my head, I believe it's hired as a 2.1. But AMSA has their own tiering system compared with the APS structuring, I think. Obviously there's the difference in pay, but then we don't get sick leave, we don't get miscellaneous leave, we don't get carers leave and we don't get things like domestic violence leave. Or if somebody close to you dies, there's no leave like that. So essentially every day, depending on what's happening in your life, you make the choice, 'Am I going to get paid today?'—compared with what else is happening in your life.

Senator WALSH: It just sounds extraordinary to me as I listen to your story that the kind of advice you and your colleagues who were employed by Manpower have received is being delivered in this way. It sounds like the advice you're delivering over the phone is critical to safety. But anyone from Manpower could leave at any time and be replaced by someone who is starting from scratch. I guess my question is: Is this a secure way to be providing the advice that you're providing over the phone?

Mr Thackray : I'm very sorry, Senator: I had some connection issues there, so I missed I think about the second half of what you were saying. Could you please repeat that?

Senator WALSH: Yes, that's okay. It was kind of more of a comment, actually, than a question—that it strikes me that the advice you're providing on the phone is critical, and it just seems extraordinary that it's provided by labour hire, where there could be quite a lot of turnover of people and new people needing to start and learn the ropes. Would your preference be to be employed permanently in the Australian Public Service to do this work?

Mr Thackray : Yes, undoubtedly. And going to your comment about the kind of work we do and the information we provide, every person I work with could give you a story of some extremely serious matter—sometimes literally a matter of life or death—talking to someone on the phone. For one of my colleagues, the first call that they took by themselves was someone having a mental health episode and threatening suicide based around their circumstances. I had the owner of a vessel call me to let me know that his boat was on fire—he'd called the AMSA general hotline—in the middle of the ocean and that his master was up the top of the crow's nest. I had to politely tell him to please call triple-0, because he probably shouldn't be calling the reception line. Everybody's got a story like that. Obviously those are extreme examples. But yes, we provide extremely critical information to people.

Senator WALSH: Thank you so much, and I'll just go back to Ms Donnelly. You said that you'd heard some of the evidence that we had before, where an explanation for the reliance on labour hire was given as the need to meet surge capacity, and I think the evidence we've just had of someone working for three years in labour hire in a critical ongoing role would be different from that advice that we got from the department. I'm wondering what you can tell us about your experience of whether this is surge work—albeit that could be provided in another way, as you said before—or whether in fact you're seeing a trend to ongoing critical roles being outsourced in this way.

Ms Donnelly : Absolutely, we are seeing a trend towards ongoing core work of the public sector being moved to insecure labour hire arrangements. I gave the example of Services Australia compliance work in my opening statement and the Department of Veterans' Affairs processing work. This really is core public sector work. The NDIA is another example where there is huge use of labour hire. In our view, the ASL cap has really driven the use of these arrangements. The huge increase in spending, as demonstrated by the Thodey review, really reflects that it's not surge workforce; it's ongoing workforce. My colleague Mr Waters can talk more about Services Australia and its usage of labour hire.

Mr Waters : Services Australia is currently undertaking a massive surge in relation to the COVID-19 disaster payments. Prior to that surge commencing, over 25 per cent of the workers performing Services Australia work were in some form of insecure or contingent employment. That's well over 9,000 workers. With the surge work starting, Services Australia has advised that it has engaged at least another 4,000 workers to address the surge. The contingent workers they had before the surge were doing 'business as usual' work. Since the surge, they've had to go and engage a whole lot more people to assist with that surge.

Senator WALSH: How do the pay and working conditions compare between the APS employees and the labour hire employees that you just spoke about in Services Australia?

Mr Waters : Services Australia uses a number of different labour hire providers, and it would appear that there are different pay rates depending on which labour hire provider you are with. Based on the contracts we've seen, the rates of pay are significantly lower for the labour hire providers than would be the case if they were directly employed, and, certainly, the conditions of employment are not nearly the same quality as those the directly employed permanent workers enjoy.

Senator WALSH: I want to ask you about the impact in terms of the workforce turnover. It seems like you've got people who are providing absolutely critical information and advice to people at a time of crisis, irrespective of whether it's during the pandemic or before, when 25 per cent of the workforce was contingent anyway, as you said. What is the impact of staff turnover in labour hire on the ability of the Public Service to do its work?

Mr Waters : Since June 2013, we've seen over 7,000 ongoing jobs cut out of Services Australia. What our members consistently report to us is, because there is much higher turnover among the various contingent workforces, whether it's casuals or labour hire, they don't have the same training and experience, and that generates a lot more rework. It also means that members of the Australian public are needing to make appeals against decisions that may not have been made if there were a more stable, secure and experienced workforce in place. Turnover among labour hire and casuals is significantly higher than among the ongoing workforce. It's no fault of the workers by any stretch, but they just can't have the same level of experience and training as an ongoing experienced workforce does have.

Senator WALSH: Thank you. Chair, if you want to share the call, I can come back later.

CHAIR: Why don't you go. You can take a bit of my time to keep the line of questions going.

Senator WALSH: Ms Vincent-Pietsch, I think the area that you represent is the ATO. Could you tell us about the use of labour hire there? Is it for surge? Are there other ways that it could be done? Is it in fact for ongoing work as well?

Ms Vincent-Pietsch : The ATO has 21,200 people working for it, 18,000 of which are ongoing. In terms of labour hire, that's actually a relatively smaller proportion. Just over 600 are labour hire, and they're spread out across the entire workforce very much doing the basic work of the ATO in all of those different functions that they cover. But the larger proportion of insecure workers are actually casuals, so they are casuals to the ATO. In terms of spend, they're not paying a labour hire firm because they're casuals to the ATO. They are, however, concentrated—there are about 2,300 of them—in service delivery. They're the people doing the basic processing and they're the people doing telephony work. They're the people taking the calls to the ATO. They are very much ongoing. The ATO reports that they're there for surge capacity. However, these people don't just come on for tax time. They are predominantly getting shifts every week, bar the Christmas shutdown, and they have been doing that work, in many cases, for nine, 10, 15 years. They've been doing the same job, same shifts, but as casuals.

We did see a very similar experience to what Alastair told you about at Services Australia. When they did have a surge need that came through with COVID and JobKeeper, which they were administering, and access to superannuation, they just went out and hired a lot more casuals. They didn't have surge capacity because those people were doing the ongoing work. They aren't there just for tax time and surge capacity. I think it's worth noting as well that the ATO have a regional footprint. At Albury, for instance, there are a thousand ATO workers, which makes them quite a big employer in Albury and part of the local fabric and local economy. In all, 38 per cent of Albury ATO workers are casuals and they're desperate to be ongoing. They've been doing the same work for a very long time, week in and week out. They want more shifts, they want job security and they want capacity to move ahead in their career because they've been stuck at the APS2 level, the very entry level positions for the ATO. They're stuck there, they can't progress, they're doing the same work and they desperately want job security.

Senator WALSH: When you say that they're desperate for ongoing work and that they would like job security, is there a way that they could convert? Why is that not available to them if they are in fact working in an ongoing fashion?

Ms Vincent-Pietsch : There have been moves by ATO. They do these very large recruitment rounds where casuals are able to apply. They get on to a merit list and that way they might get one of those positions. Unfortunately, though, in centres like Albury that happens all too infrequently. It happens more in the big cities, so those regional centres where they've got large concentrations of casuals don't often get those opportunities. But we have been very encouraged, because we've had some recent discussions with the ATO where they've recognised that their obligations with the changes to the Fair Work Act mean that they need to audit where they've got long-term casuals doing regular shifts. They are talking now about, at least for those who've been through merit selection process and didn't get a position out of it but were found suitable, looking at pathways to permanency for these people. It's really encouraging because there are so many of our members who are reporting that they're desperate for ongoing work, that they're really, really keen to get an ongoing position and are talking about serious mental health impacts of being in insecure work, particularly in a pandemic. Those conversations are just starting with the ATO, but we're really encouraged to see they might move in that direction and shift their work profile to more ongoing.

Senator WALSH: Ms Donnelly, is it your evidence that it's the ASL cap that is the main driver of the trends that we're seeing to outsourcing and labour hire in particular? What's your main recommendation for the committee?

Ms Donnelly : Yes, it is our evidence that the ASL cap is the main driver of the use of labour hire arrangements, and that is backed by evidence of a range of agencies to a range of parliamentary committees and other processes. We think that the abolition of the ASL cap is absolutely pivotal. The government has made moves in the most recent budget acknowledging that labour hire arrangements are often less efficient and less effective than engaging ongoing staff. The issue for us and for our members is that they haven't done enough to convert those 20,000 labour hire workers who are still out there. They are undertaking core work, and the government could easily make moves to accommodate that workforce within the public sector rather than paying a premium to labour hire firms for the current arrangements that we have. In fact, for the same amount of government expenditure we could have more people in Services Australia answering the phone or more people in Veterans Affairs or NDIA booking clients and delivering better services to the community.

Senator FARUQI: Good morning, everyone, and thank you for coming to provide evidence today. It's been very interesting listening to you, because I've always had the view that cost-saving and improved-efficiency justifications for privatisation and contracting out more Public Service work has always been a myth, and it remains a myth. You said there were some particular departments or agencies, like Services Australia, NDIA and Veterans Affairs, that had a lot of labour hire contracting happening. Are there others? Why is it some and not others? Is there a particular reason for that?

Ms Donnelly : There is widespread use of labour hire right across the Public Service, but it differs between different agencies and even within agencies, between different functions. In the Department of Veterans Affairs we see much greater use of labour hire around processing and claims processing than perhaps in other areas. Some of the explanation around that—for example, in the instance of the Department of Veterans Affairs—reflects the point in time at which the ASL cap was introduced. Since that time, there's been a huge increase in Veterans Affairs claims and support needed for vets. It came at a time when they faced increasing workloads and increasing complexity but they faced a cap on the ASL. The other example that demonstrates that is the NDIA. I might throw to Ms Vincent-Pietsch to articulate that.

Ms Vincent-Pietsch : The NDIA has a significant proportion of labour hire workers—about a quarter, inching ever closer to a third, of its workforce—from 47 different labour hire providers, so it's a real hodgepodge. Those workers are very dedicated. They see themselves as working for the NDIA, but they're earning less than the person they're sitting next to whilst actually costing more for the NDIA.

But they're critical to its delivery. These are ongoing jobs. The NDIA, as has been well documented, has struggled to keep on top of participant needs and to be responsive, and it needs ongoing employees. Similar to Nick's evidence, these workers require a lot of training to be able to deliver those services, and they are very valuable. Once you've trained them up, you need to keep them. So, keeping this proportion of labour hire workers is not at all about surge capacity. This is ongoing work that is only going to increase. Yet the agency, due to the ASL cap, is saying that it needs the workers and if it can't directly employ them then it will go through labour hire firms.

Senator FARUQI: I'm also interested to find out whether you know whether there's a gender dimension to this increasing casualisation and contracting out of the work.

Ms Donnelly : Thank you for the question. I did hear your questions to the APSC on this, and I've been thinking about that issue. We don't have the dataset to fully answer. In fact, the APS doesn't have the dataset on labour hire employees. But the kinds of areas where we see greater use of labour hire—which often reflects service delivery functions, even in service delivery agencies—I would expect that that has a higher feminisation than perhaps other areas of the Public Service.

Senator FARUQI: That's what I would think, as well. I'm just wondering whether you think there is a role for the APSC in reversing this trend. What do you see their role as?

Ms Donnelly : We think there is absolutely a role for the APSC in financing reversal of the trends that we have seen. The evidence of a range of agencies as articulated in our submissions shows that these are expensive and inefficient arrangements. So, Finance should have better reporting and transparency of what is going on, and we should, given the evidence and given the comments from the Minister for Finance, be reversing those trends. And both Finance, through procurement, and the APSC, through its employment responsibilities, have an obligation to lead in that respect.

Senator FARUQI: One of the strong recommendations you've made to us today is the abolition of ASL—the caps. Are there any other recommendations you'd like the committee to take onboard?

Ms Donnelly : Yes. And since we made that submission there has been some movement in the budget around the ASL cap. The problem with that is that it's limited. So, whilst there's been that acknowledgement about labour hire arrangements and a move on the ASL cap, the government has not conferred it to around 20,000 labour hire employees across the service. We think there are direct steps that can be taken to convert that. And we think the use of direct casual employment, as Ms Vincent-Pietsch outlined in the ATO example, should be limited to irregular and intermittent duties, as it is supposed to be under the Public Service Act, not core ongoing work.

Senator FARUQI: Thank you very much.

CHAIR: I just want to go to Ms Donnelly, and this is a question that you've answered in some degree before, with previous questions from the senators. But I just want to come back to it. If labour hire doesn't deliver value for money, why has it become so prevalent in the Public Service?

Ms Donnelly : In our view—and it's our evidence—this is a direct result of the government's average staffing level cap. The government took a policy position about public sector staffing that there was to be an absolute cap across APS agencies. What we have seen, where there's increasing demand for services and there's a need to have a greater workforce than is allowed by that ASL, is that agencies often have the budget to do so but are not allowed to employ APS employees to undertake that work. And a number of agencies have given evidence, as outlined in our submission, that their choice to engage labour hire has been driven by the government's ASL cap.

CHAIR: I just want to go to this question of pay and training. I appreciate that this is a broad question, so there are some specifics you might want to come back with. When it comes to pay and training for labour hire workers, casual workers that are directly employed by the Public Service and full-time workers in the Public Service, what are the differentials in pay and conditions, particularly with labour hire?

Ms Donnelly : As a number of my colleagues have outlined, there is quite an array of labour hire companies and labour hire arrangements that exist across the APS. So there's not a singular answer to that question. What we see is that the labour hire workers are engaged in insecure arrangements with fewer rights and conditions. In terms of pay, they are often paid less or, in some circumstances, the pay rates are linked to relevant APS pay rates; however, they don't get to enjoy job security or conditions that would apply across APS agencies.

CHAIR: One other thing, of course, is the efficiency of the important role that the Public Service plays. Efficiency also comes from training, skill development and career pathing. Can you talk me through the different circumstances that you find between labour hire and directly hired public servants?

Ms Donnelly : The training arrangements do often differ between APS employees and labour hire arrangements, in terms of both formal training offered and also what you might call on-the-job training or mentoring or sitting alongside someone else and developing the expertise that you need in some areas, which is, of course, complicated support for clients and customers. So there are a range of differences in terms of both formal training and informal training. There is also the issue, of course, that at Centrelink service centres, you talk to labour hire workers who say: 'I enjoy this work. I would like to work long-term for Services Australia, but I don't have job security so I can't. If I get another opportunity, I will have to take that.' So there are also issues about that churn factor and what that means in terms of training and developing staff and the workforce across the public sector. Mr Waters might want to add to that answer in respect to Services Australia.

Mr Waters : We certainly have seen—and members report—significant increases in levels of rework, and appeals and concerns arising from members of the community. That generates additional work in and of itself that takes away from actually providing support, and that is being linked directly back to having this contingent workforce where there is far greater churn, where there is significantly less experience, and where there isn't as much training and the training is not up to the same standard as is provided for the directly employed, ongoing permanent workforce.

CHAIR: I was wondering whether you were surprised, Ms Donnelly, or concerned that neither the APSC nor Finance knew about how much labour hire there is. Is that concerning to you?

Ms Donnelly : Absolutely it's a concern, and I think it's a concern in terms of not just our understanding of what is our public sector workforce but also our understanding of expenditure in this space. I think it is a significant problem.

CHAIR: This question is to you, Mr Thackray. Thank you for your evidence earlier; it has been very helpful. I'm wondering about the evidence in relation to AMSA workers and the work that you're doing, that AMSA is paying labour hire companies $20,000 to $28,000 extra per employee in fees. You've given evidence that there is a wage and conditions differential between the labour hire workers and the direct hire workers. What concerns do you have when AMSA is paying labour hire companies $20,000 to 28,000 per employee in fees whilst paying lower wages to their actual labour hire workers themselves?

Mr Thackray : I would absolutely prefer to just be paid a portion of that money myself. In terms of the differences—I think we've got five minutes left and I could go on forever on this topic, so I will try and keep it as brief as possible—there is the casual loading, but then there's the difference in superannuation or the leave opportunities they talked about previously. Collective bargaining is incredibly difficult when your position can be dropped at any point. Realistically, talking about insecure work, what that means is you're insecure from being dropped and being out of a job and that means—with the job market being what it is and at the current rate of JobSeeker and all of that—literally going into poverty. So I think, personally, that's the main issue here, besides the differences in pay and stuff.

If I can briefly echo a couple of things that were mentioned about turnover. I don't want to sound extreme with this, but we also experience incredibly high rates of turnover, where people get jobs internally as well as externally, where they're offered jobs that are actually secure. I would also like to acknowledge that we have had, I believe, 10 or 11 full-time positions offered very recently, within the last few days, which we're extremely happy to see. Everyone has been very happy to see that acknowledgement.

CHAIR: They must have been waiting for your evidence, Mr Thackray, or concerned about your evidence. Keep going, by all means. I didn't mean to cut you off.

Mr Thackray : I would like to say that we have developed a really good team within AMSA and with direct management. Part of the reason why people do really want to see this work recognised is because they do want to stick around. We care about this job, we think it really matters, but at the end of the day you have to make a decision about what puts food on the table and what gives you that security and peace of mind.

If I can also briefly mention that, in terms of the training, when you have that turnover and attrition, as a labour hire employee I am one of the people who assists in training. So you have labour hire staff training new labour hire staff.

CHAIR: Ms Donnelly, back on this question of $20,000 to $28,000 per employee in fees by labour hire companies, what's your reaction to those sorts of figures?

Ms Donnelly : Unfortunately, Chair, I'm not surprised by the document that was tabled this morning. It is consistent with what we've suspected and also what we've seen from agencies in terms of the evidence that's been given in other processes. It is extremely concerning, though, that there is a government decision about staffing that is being made that does not deliver more staff, does not deliver better services and is actually costing more money. There is a much better way to go in this space, and that is employing more APS employees to deliver better services at a reduced cost to what we are seeing is currently the case in the federal government.

CHAIR: I thank all of you for your evidence today. Hearing that evidence that Ms Vincent-Pietsch raised about people spending 10 to 15 years working as a casual—that's quite a disturbing figure. Your evidence will assist the committee in its deliberations and the preparation of its report. If you've taken questions on notice please provide responses to the secretariat by 10 September 2021. I particularly thank Mr Thackray for coming in and giving evidence. I know it can be challenging.

Pr oceedings suspended from 11:00 to 11 : 15