People & Human Resources, Retail

Workers at Amazon Australia warehouses “stressed out” and under pressure: Are these hiring practices on the rise?

Dominic Powell /

Amazon Australia

Companies like Amazon create value for investors through their people, their invented systems and processes, and their physical presence. Jakub Kaczmarczyk

Warehouse workers at Amazon Australia’s dispatch centres have reportedly slammed the retail giant’s local hiring practices, while some workplace law experts claim more and more businesses are using labour-hire arrangements to “subvert” employee obligations.

According to Fairfax, workers at Amazon Australia’s Dandenong warehouse describe the conditions as a “hellscape”, each speaking to the publication anonymously for fear of losing their jobs.

Workers at the warehouse are hired via a third-party labour-hire firm, working as casuals for that company, rather than employees of Amazon Australia.

These casuals are reportedly held to extreme key performance indicators [KPI], with Fairfax reporting workers are given handheld electronic scanners to use while picking and packing items set to be shipped. Once an item is scanned, a bar then appears on the bottom of the scanner’s screen, representing the amount of time the worker has to reach the next item on their list, which could be anywhere in the warehouse.

“You always have KPIs [key performance indicators] but the line on that gun, I’ve never had that before,” one warehouse worker said.

“You end up not being able to function because you’re so nervous and stressed out.”

Additionally, Fairfax reports a worker describing the workplace culture as “cult-like”, with labour-hire employees having to start the day by sharing an “Amazon success story” and a team chant of phrases such as “Success!” or “Amazon!”.

Workers reportedly said if they were unable to hit their required pick rate KPIs, they would receive a text telling them their next shift was cancelled, with one worker saying “you just have one bad day and you’re gone”.

“You notice people just disappear if they don’t reach their pick rates,” the worker claimed.

Speaking to SmartCompany, partner at Patron Legal Shane Wescott says more and more companies are turning to labour-hire as an employment solution as a way to subvert their obligations to workers, specifically unfair dismissal obligations.

“A lot of employers use these types of arrangements to subvert unfair dismissal laws, as a lot of the time the host, or Amazon in this situation, will say to the labour-hire company ‘we don’t want this person anymore’. Then the labour-hire company will convey that to the employee,” he says.

“And if the employee thinks they’ve been unfairly dismissed, Amazon isn’t the one who dismissed them, and the labour-hire company hasn’t actually dismissed them as they’ll often find them work somewhere else, which prevents the employee taking a claim in relation to an unfair dismissal.”

Amazon’s choice to go down the labour-hire route doesn’t surprise retail consultant John Batistich, who told SmartCompany it fits with Amazon’s core capacity to get goods to people “faster than they think”.

“One of the leadership principles which is core to Amazon’s culture is frugality, so they only invest where customers are going to see value, so they will have looked at what’s the right mix of permanent and casual employees,” he says.

“It’s also fair to say Amazon [Australia] has had less market impact than many analysts predicted, so they’ll be making sure their cost structures are managed and they’ll be testing a whole range of hiring strategies.”

High percentage of labour-hire workers unusual

Wescott says it’s definitely unusual for a company to have nearly all of its workforce engaged through a labour-hire company, however he sees it becoming more common. Fairfax reports Amazon Australia has just 89 staff employed directly across all facets of its local operations.

Workers at Amazon’s local warehouse claim they don’t drink water before their shift and ensure they take toilet breaks before going to work, as a toilet break during their shift would likely significantly affect their pick rate.

“There’s a water cooler in the corner, but nobody uses it,” one worker said.

While labour-hire arrangements may, in effect, skirt unfair dismissal obligations, Wescott says they do not skirt employee obligations for sufficient breaks and further health and safety requirements.

“Many modern awards contain a requirement for a break, and these can’t be avoided by anybody,” he says.

There’s a rise in Australian companies using labour-hire arrangements as essential parts of their business models, says Wescott, but he believes the courts are beginning to catch up.

“We’re seeing a bit of pushback from the courts and the Fair Work Ombudsman. We’re in a real transition phase with the courts attempting to deal with situations where employers are subverting workplace law,” he says.

“They’re now being used as a part of a business model and a way of casualising workforces in a manner which current laws aren’t set up to deal with, but the courts are beginning to catch up.”

SmartCompany contacted Amazon Australia but did not receive a response prior to publication.

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Dominic Powell

Dominic is the features and profiles editor at SmartCompany.

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