INDUST RIAL RE L ATI ON S
WHY INSIST ON THE ASIAL SUBCONTRACTING CODE OF PRACTICE? By Chris Delaney
The problem of unsustainable rates in the Security Industry runs from the top of the Supply Chain through to the Security Officer providing the service. ASIAL has developed the Subcontracting Code of Practice as one tool that will help fix it. The top of the supply chain – whether it’s Local, State or Federal Government or Facilities Management Companies or businesses - often puts pressure on private security providers to “sharpen their pencils” – a euphemism for dropping the price (and usually to unsustainable levels). The justification is often that the client is seeking “value for money” – another euphemism, this time meaning “lowest possible price”. Some customers don’t know or even try to know what a reasonable or sustainable price should be. Some time ago we wrote about the cost of providing a security officer and the responsibilities of end users under s550 of the Fair Work Act 2009 (the Act). A revised schedule appears below.
Level 1 Security Guard working a 24/7 Roster at 1 July 2019 (1 weekend a month)
Hourly rate
Base Rate + Penalties
$31.55
Annual Leave, Personal Leave, Long Service Leave, Superannuation, Payroll Tax, Worker’s Compensation, Various Insurances and Indemnities, Administration
$10.00
Average Cost of providing the service
$41.55
Penalty rates apply to Security guards. Saturdays at time and a half ($33.42), Sundays double time ($44.56), and Public Holidays double time and a half ($55.70) – for a Level 1 Guard. Most are level 2 or above. Casuals get an extra 25%. NB The above costs are before the security provider can apply a reasonable profit margin.
30 SEC U R IT Y IN S IDE R | A PRI L – JU NE 2021
It is incumbent on clients to ensure that private security providers are compliant with all legal requirements. And merely asking the provider to declare that they are compliant is not sufficient. ASIAL recommends that clients seek hard proof of compliance either by audit or third party accreditation. One issue of concern lies with the use by the private security provider of subcontractors to carry out the work. While this can be a genuine business model in some instances, there are dangers of which clients should be mindful, especially when the suncontractor is an independent contractor. Much has been written about wage theft and exploitation of workers. It is paramount that clients become familiar with the composition of the security providers workforce. One group open to exploitation is the “independent contractor” often called an “ABN holder”. There are significant contrasting features between a person who is an employee and an independent contractor. An employee is in a relationship of personal service. An independent contractor is a business person. Many people who are appointed as contractors are not really in business or truly independent, but rather are dependent on a principal. More often than not, in the protective services sector of the security industry, ABN holders do not reflect the characteristics of a bona fide business owner. Often the work is carried out personally, rates are not negotiable, there is no commercial risk for the ABN holder and they cannot substitute another to carry out the work. They work when and where they are directed, have no tools or equipment and cannot create goodwill.
