The concept of protecting worker entitlements through a joint enterprise of employer associations and unions was developed over 25 years ago. It emerged out of an industrial climate where people were frequently terminated - permanency and continuity were significant issues.
Since that time Incolink has become Australia’s largest provider of redundancy benefits and income protection (insurance) to construction industry workers. As of 30 June 2015, Incolink manages in excess of $714m of investment assets with worker entitlements sitting at $577m. Contributions to Incolink’s various schemes are set out in Enterprise Bargaining Agreements entered into by employers and unions in the construction industry. Today, Incolink has over 40,000 active employee members and over 4,000 contributing employer members.
Protecting employees’ redundancy entitlements is a first order priority for Incolink. However, Incolink’s co-operative approach has also seen it emerge as a significant funder of industry training and employee support services. Incolink provides funding for training and for occupational health and safety initiatives, subsidises insurance benefits and provides health and wellbeing services. It does this by using funds that are generated from investment returns whilst always maintaining a strong reserve balance and ensuring that all liabilities are fully funded. Today that investment reserve buffer sits at 24 per cent.
The purpose of this report
The Board of Incolink has always known the benefits and services provided by Incolink to the building and construction industry in Victoria and Tasmania are a valuable safety net. However, with the appointment of a new CEO the Board decided an independent review of the impact of Incolink’s approach to strengthening the industry would be timely. As a result the Nous Group was engaged to quantify the net contribution of the Incolink co-operative industry scheme to the Victorian economy. Whilst recognising that there is a direct cost to employers the Nous Group were asked to assess the value of:
• providing certainty of entitlements to employee members;
• improving labour market mobility and reducing the transaction costs (firing and hiring) associated with the fluctuating activity cycle of the construction industry;
• reducing the direct call on governments by reducing the call on social security benefits for out of work workers; • enhancing the quality of industry training through direct investments in training;
• making a direct contribution to the provision of income protection type insurances for worker members; and
• providing support services such as counselling and employment guidance for workers that require it.
The results of that work are contained in this report. We are delighted with the results which confirm the benefits of providing income security and wellbeing support to thousands of workers and their families. We will always strive to improve our efforts and deliver real value to the building and construction industry.