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Not-a-Blog - Miscellaneous Ideas

Hourly Rates for Temporaries

Bruce Barbour - October 2018

In the past few years I have been mainly working as a temporary, due to the flexibility it gives and the options of being able to take time off when needed. A lot of this temporary work has been with local government because that is where I have most of my experience, and I can usually slot in and become productive very quickly.

However what I have found in the last few positions I have had in local government as an agency temp is that the hourly rate offered - which should have an oncost component, see next paragraph - is often lower than what directly employed staff are getting for the same job.

Temporaries on hourly rate assignment are meant to get the base hourly rate paid to permanent staff plus a percentage oncost, to take account of the fact that temporaries do not get paid an hourly rate while on annual leave or for public holidays and sick leave, and do not get a whole lot of other benefits of being directly employed (e.g. training, long service leave etc.). Temporaries should also get a pay premium for the flexibility that temporaries offer to employers (effectively there are no wrongful dismissal rights and they are able to come into and leave an organisation at short notice depending on work load). In most enterprise bargaining agreements (EBAs) and in the Awards this oncost is usually 25% on top of the base hourly rate.

How can the temp agencies get way with paying less than council's permanent staff? Well the wages offered under the council EBAs over time have outstripped the wages regulated under the Local Government Award, so EBA wages are now significantly more.. The temporary agencies that employ the person pay the temporaries at Award pay rates rather than the local council EBA pay rates. Consequently, even with a 25% oncost, the hourly rate paid to the temporary could still be below what a direct employee was getting per hour - and remember that the temporary is not getting paid hourly rate for any time for holidays, etc. that would have normally accumulated if they had been directly employed.  

What this could mean is that there could be two people working side by side in a council doing the same type of work, with the direct employee effectively getting paid a whole lot more than the temporary employee. I have seen one temporary position advertised where part of the duties of the position was "mentoring" other staff. However from what they were offering as an hourly rate it would have been quite likely that the temporary "mentor" would have been paid less than the people that they were to be "mentoring". That is in no way a fair arrangement. I have also seen a "Coordinator" position advertised, typically a minimum Band 7 or 8 position in council, being offered a rate commensurate with Band 5 to 6. The temp coordinator would likely be paid less than his or her staff they are supervising. Again not a fair arrangement.

You would think that the council would realise that if they offered a better hourly rate then the qualifications, experience and number of applicants for the temporary position would be higher, giving the council a wider choice, ultimately leading to the engagement of a better qualified temporary employee and a better work outcome. And being only temporary the difference in costs over the term of the assignment would not be that much. Perhaps the problem is that the temporary agencies are telling the councils that they can get the required people, supposedly qualified and experienced, at the bargain basement prices, and the councils are rubbing their hands together gleefully accepting this cost saving without thinking through the implications.

What conclusions can I draw out of this?
  • Assuming the council is aware of this inequality of payment - the council I worked for definitely was - then, far from being employers of choice for temporaries, some local councils will avoid paying EBA rates if they can. It means they have no qualms about having two people doing the same job getting paid at very different rates. Equal pay for equal work is a principle that has been established long ago. Anything else is unfair. (The council I worked for was aware of the lower pay rate because I approached them hoping they would agree to an increased hourly rate to match what a permanent employee would get. My immediate boss and the HR department were aware and unconcerned. After more negotiation they eventually agreed to an hourly rate increase but not to the hourly rate that I would have gotten if I had been directly employed by the council.)
  • Unions seem to be not concerned about this practice, which undermines the EBA - they must surely be aware of it. Their argument would be that temporaries have low union membership and therefore are not their concern. If all temps were in the union then unions would pay more attention. But still unions should be concerned with this practice undermining their EBA conditions - if it is not challenged this form of temporary employment will become more wide spread.
  • I have to admit that recently while doing short term assignments I have neglected to sign up to the union - so I am part of the problem - if I do get back to work I will have to be more diligent about union membership. But unions should also look at their membership processes to make it easier for temps on short term assignment to start and halt and then start again their union membership, as required. They should also look at stream lining the process for temporaries moving across industries and therefore to a different union for coverage.
  • The unions' role in maintaining good wages and conditions is plain to see. The EBA wages and conditions are way above the base award. It is clear to me that many councils would pay everyone base award if they could get away with it. Despite their apparent lack of interest in the wages and conditions of agency temporary employees, unions, and organised labour, are still the main reason that even seemingly reputable employers, let alone the bad ones, pays wages and conditions above the legal minimum, so support your union.
Another question I would have to ask is why is the Award so much lower than most EBAs. While I haven't done a survey of all council EBAs it is likely that all councils would pay their directly employed staff above the Award. In which case why isn't the Award increased to at least the wages of the least of the council EBAs - after all, the Award is meant for workers engaged on local government work. That would prevent temp agencies from providing staff at wage rates significantly below permanent staff.

And why don't the unions demand a requirement in council EBAs (or councils - to show that they are really good corporate citizens and employers of first choice to all their workers - just put it in) that temporary staff engaged through temp agencies be paid at EBA rates (with specified oncosts), which is what the EBAs (at least the ones I have seen) require for temporary and casual staff who are directly employed by a council. That would protect the integrity of the EBA and prevent the undermining of council wages and conditions through the use of temporary agencies. Without this change to the EBA the use of temp agencies to save councils money has the possibility of becoming a much wider practice. Even to the extent that a council in the future could outsource the majority of its labour supply or large excisable sections of its workforce through temporary agencies or labour hire firms. Or outsourcing of part of the services to private companies who would engage workers required, often some of the same personnel employed by Council, but a lesser number of them and at the lower award rates. If you think any of this is unlikely then remember it has happened in other industries.

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