24 January 2023

Expanding long service leave to food, beauty and hospo? The Opposition says consequences will be ‘dire’

| Claire Fenwicke
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Hairdresser

It’s been recommended the Portable Long Service Leave scheme to extended to cover the hairdressing, beauty, accommodation and food service sectors. Photo: File.

A proposed expansion of the Territory’s Portable Long Service Scheme will have a “disproportionate” impact on female-owned small businesses if it passes into law, according to Shadow Business Minister Leanne Castley.

A Committee Inquiry into the amendment bill overall recommended it be passed, but Chair Leanne Castley has issued a dissenting report arguing the “purported benefits” are “risible”.

“The Bill will impose additional direct financial costs and substantial administrative burdens on Canberra small businesses,” she said.

Portable Long Service Leave is leave given to an employee who has worked in the same industry for a specific amount of time.

The portable schemes allow employees to transfer from employer to employer without losing the service already accrued within the covered industry.

The bill’s expansion would see the scheme cover the hairdressing, beauty, accommodation and food services sectors.

An extension of the scheme to the real estate, travel agency and retail industries has also been foreshadowed.

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In her report, Ms Castley argued the ACT Government had not proved that involuntary labour mobility was a feature of the industries to which the scheme would be extended.

“Mobility in these industries is voluntary rather than associated with the nature of these industries,” she said.

“Indeed, employment in these industries is often casual or transient.”

Ms Castley also drew issue with an apparent lack of analysis of how this amendment would benefit employees or the economy.

“The accepted purpose of long service leave is to reward loyal employees and to discourage staff turnover,” she said.

“The ACT Labor-Greens government has also not explained what will happen to the money invested from quarterly long service leave payments for the large number of employees who won’t stay in the industry long enough to qualify or who transfer to different occupations.”

Overall she argued the consequences for some employees could be “dire” and the “opposite to the Bill’s purported intent”.

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The Committee Inquiry report noted it was concerned feedback was “largely one-sided” as most submissions were from business owners and industry groups in the hairdressing sector.

It outlined the scheme’s advantages, saying it would boost employee well-being, provide equity for women in insecure work and tax benefits for employers, and support the retention of skilled and experienced workers within their industry.

However, a number of negatives were pointed out in submissions by stakeholders who argued the traditional long service leave model was enough.

One Canberra salon owner said introducing portable long service leave would remove the incentive for apprentices to stay where they were trained.

“Every time I lose a senior hairdresser or have a change in team member, the cost to my business is massive,” she wrote.

“This is why the incentive of [traditional] long service leave is something I have always been grateful to refer to as an incentive to stay in our workplace long term.”

Registered employers are required under the scheme to pay a levy of 1.07 to 2.10 per cent of a person’s wage to finance that employee’s long service leave.

The Canberra Business Chamber argued in its submission this would create additional costs and admin requirements for employers.

Both the Australian Industry Group and Council of Small Business Organisations Australia (COSBOA) were concerned that expanding the scheme into the hairdressing and beauty industries could negatively impact predominantly women-owned businesses.

“The proposed changes would see many salon owners close their business or be forced to employ less staff, including apprentices,” COSBOA argued.

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However, Industrial Relations Minister Mick Gentleman, who introduced the amendment bill last November, said the government had been specifically asked to include these industries in the scheme in previous motions – the hairdressing sector in 2020 and the contract catering industry in 2021.

He described it as “unfortunate” the Opposition wasn’t supporting a scheme that he said would benefit workers.

“Businesses who treat their employees well will encounter no issues with this proposal,” Mr Gentleman said.

“The proposed changes will not incentivise employees to move from business to business.”

He argued the scheme also gave workers more financial security and flexibility.

“For many of us, long service leave is an entitlement that we already receive in our jobs,” Mr Gentleman said.

“By making sure it is portable across as many industries as possible, we are providing more equal access and making sure the people who do these important jobs receive the benefits other Canberrans already enjoy.”

If the amendment passes, employers will be given a two-year grace period to prepare for the change.

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There is a very good reason that so many staff left these industries during covid, as well as why staff always leave these industries as soon as there are better opportunities available to them. People stay with good employers and do not need to leave for their personal wellbeing because they’re being abused at work.

The reason these industries have to bring in staff from overseas is because our well-trained chefs and other staff leave the industry as soon as they can, because it does not offer secure, stable, reliable or valued work.

So many of these small employers have no idea of how to keep their staff. They do not realise that they have to look after them, to value them and consider their needs if they want them to stay. Often they have no training in staff management. So many treat their staff with open contempt, devaluing them and thus encouraging them to leave to find a better employer.

I know and have observed very many people in these industries who’ve never had the opportunity of stable work with a good employer. They’ve had repeatedly bad experiences with employers who are abusive, do not pay appropriately, value the work or the person doing it. Whilst they’d love long service leave, 10 years of abuse is not worth it.

What a pity we did not have advocate and workers representative groups who represent these employees such as the Australian Workers Union and the CFMMEU contributing submissions to this inquiry, to make it one less sided. The only submission supporting workers was from ACTCOSS. This is a scheme that protects the rights of more mobile workers. It extends the cleaning sector scheme and operates much the same as superannuation, benefiting those workers who move between employers in the one industry. These employees are probably some of the most exploited workers in Australia. Many suffer from bullying, harassment, underpayment, non-payment, inadequate breaks, insufficient training and unsafe working conditions. Many, including immigrants are exploited by sham contracting, which impedes their access to workplace entitlements. Hairdressers are required to stand for extended periods of time and work long hours including weekends. They suffer from skin diseases as a result of repeated and prolonged use of gloves, water and chemicals. I am looking forward to this scheme being extended further into other sectors to support and provide additional benefits and equity for all workers.

Agree 100%!!!!! Horribly abusive industries. Many employees cannot stay in these unsafe workplaces and are forced to leave. Their are too many small businesses, including family businesses where no-one trained in management of staff, so they treat their staff as if they’re slaves and expect them to put up with it, because the boss does what s/he likes. So many staff are vulnerable, because they start in these industries when young, naive and trusting.

Except this scheme defeats the entire purpose of long service leave and adds nothing.

“It extends the cleaning sector scheme and operates much the same as superannuation, benefiting those workers who move between employers in the one industry.”

Exactly, it makes it more like Superannuation which is not what long service leave is for. In reality though, it makes it more like a forced short term savings mechanism, the point of which isn’t explained.

The Labor/Greens seem to continue to confuse themselves about the purpose of long service leave and have created a scheme that defeats the purpose of rewarding long serving employees of the same employer. It’s now rewarding short service for those who choose to bounce from employer to employer at the financial detriment of the businesses that have invested the time and money into those employees.

If the business owners treat their employees well, they stay. They only leave when they’re not treated properly, which is a common issue in these industries, especially by small employers who consider them slaves, rather than people who need to be treated with respect, paid properly and valued for their contributions.

My son, a chef, had to frequently leave workplaces where he was bullied, physically attacked, abused, underpaid and exploited until he found a good employer. He stayed there for 9.5 years and was just approaching his long service leave when the owner of the business fired him to avoid paying long service leave. My son-in-law, also a chef was bullied from several workplaces. The restaurant industry is well know for treating staff with contempt. I wish we’d known that in advance.

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