Five years ago, the Victorian Labor government launched the Inquiry into Labour Hire Industry and Insecure Work. The AEU made a submission, as well as supporting members employed as casuals to give evidence to the inquiry. It is fair to say there was a lot of hope that the recommendations would end some of the terrible practices adopted by labour hire firms. In some industries, underpayment below Award rates was rife. In education, the most significant issue was the disparity between agency and Ministerial Order rates of pay for casual relief teachers (CRTs).
In Victoria, a CRT may be engaged though an agency or directly by a school council. When booked directly, the school is required to pay the Ministerial Order rates, as negotiated by the AEU, which have seen significant salary increases throughout the life of the current enterprise agreement. Meanwhile, agencies are only required to pay the minimum Award rates. Although Award rates increase each year, as determined by the Fair Work Commission, they remain much lower than the rates negotiated by the AEU ($376.56 versus a minimum $263.30).
Using agencies to find CRTs costs a school more than if they had hired a CRT directly.
While some agencies pay higher than the minimum Award rates, the general picture statewide is that many CRTs working for an agencies receive less money for each day worked than a CRT engaged directly by a school. For some, this could mean $20 a day; for others, this could be up to $111 per day for performing the same work.
It’s also worth noting that, more often than not, using agencies to find CRTs costs a school more than if they had hired a CRT directly. It cannot be stressed enough that the current arrangements cost schools more, and result in less pay for the teacher.
It was this disparity that the AEU strongly highlighted while advocating for casual members at the inquiry. Pleasingly, in October 2016, the inquiry handed down the following recommendation: “The Victorian Government should legislate to remove the disparity in minimum terms and conditions between casual relief teachers engaged by school councils directly, and those engaged by school councils via a labour hire agency. “
The government’s response in 2017 indicated that: “Further work will be undertaken by the Department of Education and Training (DET) to examine whether there are other feasible mechanisms for achieving the policy intent of this recommendation, including through the use of government procurement mechanisms. This work will also be informed by consideration of potential service delivery implications.”
As it turned out, DET was also undertaking work through procurement to respond to other identified issues in the engagement of CRT agencies. This resulted in the creation of a panel of approved agencies wanting to work as CRT labour hire companies. One criteria for joining the panel was proving that their rates of pay would be at least equal to the Award.
This work began in 2019 and presented a perfect opportunity to implement the inquiry’s recommendations. However, not only did the government fail in this, the tender it allowed to go out has had the perverse effect of leading some agencies to cut the wages of the CRTs they engage.
To be clear, the panel process itself did not require a wage cut. Any reduction to the Award level was entirely the agency’s decision. That didn’t stop two of them – Staffing Organisation Services (SOS), operating in Melbourne’s west and in Geelong, and Resource Ed Personnel (REdP) in Melbourne’s west – informing their CRTs that they were required to cut their daily rates because of the tender. REdP has since clarified its communications but has not reviewed its plan to reduce rates for CRTs.
In perhaps the most mercenary example of this behaviour, SOS reduced its rates of pay in July 2020, before the panel process has been finalised. In fact, SOS will have been cutting the wages of its CRTs for almost a year before the panel even begins.
The government’s pledge to reduce the disparity between agency pay and Ministerial Order rates has failed miserably. Worse, the procurement process has been allowed to be exploited to reduce CRT rates.
After the challenges faced by schools throughout 2020, it’s an opportune time to revisit the question of CRT agencies. Especially now we have examples of agencies charging more than it costs to employ a CRT directly and then paying teachers as little as they can get away with. We have examples of agencies using any opportunity to cut the wages of AEU’s CRT members, and also of agencies that did not apply for JobKeeper, meaning their CRTs received little-to-no income throughout last year’s lockdowns.
While the AEU does not endorse any particular agency, we urge principals to consider the impact of using a particular agency on the CRTs they engage. Some pay the Ministerial Order rate while maintaining high levels of service and not placing an exorbitant premium on the rate they charge schools. Also, some agencies demonstrated their care by applying for JobKeeper, ensuring their CRTs, often in a precarious position, could access a living wage in an especially insecure time for casual workers.