Should barbers, beauticians, and bellhops – workers in industries typified by short-term employment – be eligible for portable long service leave?

This week, the Legislative Assembly’s Standing Committee on Economy and Gender and Economic Equality recommended that the Assembly pass the Long Service Leave (Portable Schemes) Amendment Bill 2022, which would allow hairdressers, beauticians, and accommodation and food service workers to take their long service entitlements with them when they moved jobs within the same industry. Mick Gentleman MLA, Minister for Industrial Relations and Workplace Safety, introduced the Bill last year.

• ACT Government to expand portable long service leave (22 November 2022)

The hairdressing industry and small business representatives, however, are firmly against the proposal, arguing that it would remove the incentive to remain with one employer, and increase the cost to employers (portable leave would cost more than four times as much as traditional long service arrangements). Out of nine submissions to the inquiry, only one (the ACT Council of Social Service) supported it; the other eight – the Canberra Business Chamber, the Council of Small Business Organisations of Australia, the Australian Industry Group, the Australian Hairdressing Council, and four hairdressers – all oppose it.

Many say they were not consulted about the Bill, the report noted: the inquiry was held over Christmas, the busiest time of year, when small businesses have limited capacity to consider the Bill or prepare a submission.

Portable schemes allow workers to accumulate and access long service leave after continuous service in one industry rather than with one employer, the committee’s report explains. Currently, workers in construction and building, contract cleaning, the community sector, and security industries are eligible for portable long service leave. In their governing agreement, Labor and Greens agreed to amend the Portable Long Service Leave Scheme “to ensure more workers receive fair entitlements as they move jobs in their profession”.

The types of work to which Mr Gentleman’s bill would expand portable long service leave include barbers, beauty services, electrolysis services, hairdressing services, make-up services, nail care and skin care services, and tanning services (hairdressing and beauty services); . camping grounds, caravan parks, holiday houses/flats, hotels/motels/resorts, serviced apartments, and youth hostels (accommodation services); and cafés, restaurants and takeaway food services, pubs, taverns, and bars and clubs (food services).

Proponents of expanding the scheme argue that improved and consistent access to long service leave would boost morale, health, and wellbeing. Second, portable leave would be more equitable: increased mobility in employment means many workers cannot access traditional long service leave, the report found; the ACT has the highest rate of job mobility in the nation (12.8 per cent), and women are more likely to be affected by insecure work. Third, portable leave would discourage workers from switching careers, retaining skilled and experienced workers in the industry.

The ACT Council of Social Service, in its submission, welcomed the proposal: “These additions to the scheme will provide employees in these industries access to an entitlement that they often miss out on because of short-term funding arrangements and insecure work.”

“As a proud unionist and feminist, I am pleased to support progressive industrial relations reform that prioritises the rights of workers,” Greens committee member Johnathan Davis MLA said. “This Bill is about extending the right to long service leave to employees in insecure and often feminised industries like hairdressing, beauty services, accommodation and food service industries.”

Committee chair Leanne Castley MLA (Canberra Liberals), however, dissented. While ACT Labor and the ACT Greens think portable service leave would be fairer for workers, the Canberra Liberals and the Canberra Business Chamber oppose the Bill, arguing that it does not benefit workers and would impose a burden on struggling businesses.

Ms Castley said the Bill would force hairdressers, beauticians, and accommodation and food service businesses to pay long service leave entitlements to the government years before employees would receive any benefit, if at all.

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

“There has been no apparent regulatory impact assessment or study to support the Bill or rigorous analysis of its benefits to employees or the economy.

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

“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.”

Mr Davis said he was “genuinely surprised” to learn of the Canberra Liberals’ opposition to this reform.

“The Canberra Liberals seem intent on demonstrating to the Canberra community that they remain a fundamentally anti-worker party,” he said. “A lot of effort has been made on their part to rebrand to try and appeal to a progressive electorate, yet their opposition to this Bill demonstrates that substantively nothing has changed.”

Canberra Business Chamber ‘disappointed’

The Canberra Business Chamber, in its submission, warned that expanding portable leave will create regulatory burdens (additional direct financial costs and administrative requirements) on businesses already struggling after two years of COVID; that there was insufficient analysis or evidence to support the expansion of the scheme; and that businesses do not have the capacity or financial means to contribute to an expanded portable long service leave scheme in the current economic environment.

Graham Catt, CEO of the Chamber, said this week that he was very disappointed that the Committee recommended that the Assembly pass this Bill.

“The Committee has now received submissions from small businesses, industry representatives, and business groups that have all highlighted the costs to business, the lack of real benefits for workers, and the fact that a portable long service scheme is not appropriate for the sectors targeted.

“The ACT Government says it want to make it easier for businesses to start, run and grow in the territory. We can’t understand, therefore, the introduction of a Bill that adds cost and complexity to local businesses.

“Our members are looking to the government for support, not to make their lives harder. They are struggling to find staff, struggling with spiralling costs and supply shortages, and doing everything they can to avoid passing on these costs to customers.

“Yet somehow, in this environment, the ACT Government believes it is appropriate to introduce more rules, create more complexity and work, and add more costs for local small businesses.

“Against this, there still is no evidence or data analysis to demonstrate a benefit to employers or the economy, or exactly what benefits will flow to employees and their value.

“The ACT Government needs to listen to these businesses and their representatives who are begging them not to make these changes.

“There may be a place for expansion of the portable long service leave scheme. But that expansion should be based on proper analysis of the costs, risks and benefits for workers, business, and the economy. It should follow a proper consultation process with industry and employees to determine where expansion would be appropriate and deliver positive outcomes.

“At a minimum, any expansion of portable long service leave needs to be accompanied by parallel changes to ensure that the financial impact on employers is offset.

“We call on the government to use their resources to properly investigate the expansion portable long service leave and engage in real consultation with industry, rather than impose changes that deal small business another blow at the worst possible time.”