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How to achieve effective compliance and regulation in temporary labour management

Posted on 28/05/2014 by Mark Coyle in Category Managed Services
In my last blog, I focused on the subject of effective cost management​. In this blog I’m going to focus on some of the common challenges procurement professionals face in the subject of compliance and regulation. The discussion at the PASA Category Intelligence Exchange focused on three key areas, namely: 
  • ​Modern Award
  • Co-employment risk
  • Pre-employment screening

Modern Award

Without question, the most common challenge faced in the area of compliance and regulation by everyone at the event was trying to find an efficient way to manage Modern Award pay structures. Plus, having an efficient way of working closely with Fair Work Australia to interpret and validate pay awards.

All attendees agreed and welcomed the principles of Modern Award but admitted to real and on-going challenges to successfully working with the scheme. In my opinion, and we can successfully demonstrate this at Comensura, the only way to efficiently manage Modern Award is through the effective use of technology. Our c.net system provides the structure that enables the process, of what can be a complex set of rules around rates and interpretation of skill level/experience, to be effectively managed. With technology, you get scalability and this has proven to be of great benefit to our customers as their temporary labour needs change over time.

It was evident from the frustration expressed by the attending procurement professionals that some Vendor Management System (VMS) providers have failed to react to the Australian marketplace and local employment nuances by providing a global, generalised product that does not solve the local Australian labour challenges. It was agreed that a fully localised and operational system was required for Australian businesses to successfully work with Modern Award.

Procurement professionals really need to understand the implications of Modern Award for their business when procuring the services of a temporary labour Managed Service provider (MSP) or Vendor Management System (VMS).

Two other areas that seemed to dominate the discussion:
  • ​Co-employment risk was a growing area of concern and the relationship between the customer and the temporary worker can often prove to be vague and unclear. It was agreed that structured contracts with your Managed Service Provider (MSP) and recruitment suppliers to document their obligations was essential to alleviate risk. Getting legal advice on this subject is essential to reduce co-employment risk. In addition, there was a greater call for collaboration between procurement, human resources and operational departments to ensure the business’ obligations are fully understood to reduce risk of co-employment claims being brought. From our experience, this needs to be part of an on-going training plan for business managers so they understand their relationship with the temporary workforce.
  • Pre-employment screening for temporary workers and contractor compliance in areas such as appropriate levels of insurance was also a shared challenge. When managing pools of contingent or contractor labour it is important to have clear directives with pre-employment screening and insurance checks. Understanding who, within the process, is responsible for checking they are evidenced is essential. With a complex mix involving your business, your managed service provider, your recruitment agencies or payroll providers this is an area that you simply must get right. A critically important first step is to ensure that appropriate levels of audit are undertaken of temporary worker and contractor records. The purpose of the audit is to check that the recruitment agency or payroll provider has the documented proof required to ensure a worker is compliant in areas such as eligibility to work, appropriate qualifications or insurances. In addition, contract managing recruitment agencies and having a documented and communicated escalation process, which may include suspending serial offenders from supplying workers until remedial action has been taken, is essential. 
With all compliance and regulatory areas, truly understanding legislation and best practice in order to create, agree, document and implement a structured process will provide comfort around on-going compliance and regulation of your temporary workforce regardless of their location, tenure or discipline.

The area of compliance and regulation is wide and diverse and this is certainly not a detailed view of this area. Please don’t hesitate to contact me via e-mail - mark.coyle@comensura.com.au with any specific questions you may have and I’ll endeavour to answer them.​