Tuesday, 9 May 2017
Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017; Second Reading
I rise to speak in relation to the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. These amendments seek to protect vulnerable workers from unscrupulous employers exploiting them for a fair day's work. We are going to support this legislation through the House, but, as is so often the case with this government, it is half-baked and half-thought-out and simply not good enough.
The exploitation of workers has been widely reported. A key example of that is the widespread, coordinated and systemic exploitation of workers outlined in the Senate Education and Employment References Committee report A national disgrace: The exploitation of temporary work visa holders in March 2016. It is no secret that within Australia there are employers who are deliberately and systemically denying Australian and migrant workers their rights and freedoms and a fair day's pay for a fair day's work. These actions are disgraceful but have wider impact. They undercut the overwhelming majority of good employers, who want to do the right thing, they undermine the integrity of the workplace relations system, they distort the labour market and they undermine the principles of fair competition that underpin our successful free-enterprise economy.
We witnessed this when numerous 7-Eleven stores operated while systemically exploiting vulnerable overseas workers. This included the gross underpayment of wages, doctoring of pay records, concealing unlawful conduct, physical intimidation and subjecting workers to threats of deportation. I received a letter from 7-Eleven chief executive Angus McKay on 28 February 2017 outlining the remediation and reform journey the company have undertaken. I encourage him to do even more. They have paid back tens of millions of dollars to over 2,000 underpaid employees, but I encourage them to scrutinise their business practices more and outline a reform agenda which is even more widespread and systemic than we have seen them undertake in the past. The shameful actions of these franchises should never have reached the point of widespread exploitation. We must restore vigilance to restore the community's faith in businesses generally, and examples like 7-Eleven should never happen again. The unfair, unlawful and unjust practices witnessed have no place in Australian society. This pool of evidence is only the tip of the iceberg, and we saw the most recent Fair Work Ombudsman report, which outlined systemic exploitation of vulnerable people in workplaces across Australia, particularly visa holders. Our industrial and workplace protections must focus on ensuring that vulnerable workers have the utmost protections, that they are not taken advantage of and that employers who exploit these workers are called and held to account.
As has become the custom of this government, the Turnbull government, this legislation is a very, very long time coming and, unfortunately, does not go far enough to protect vulnerable workers. Once again, we see an attempt to grab a headline but limited substance from the Turnbull government to back it up. This government has fallen well short of the standard that Labor set to safeguard vulnerable people against exploitation in the workplace prior to, during and after the federal election. The Fair Work Amendment (Protecting Vulnerable Workers) Bill brings about the commitments the Turnbull government only made because Labor was leading the way with important, necessary and long-overdue measures to stop the exploitation of vulnerable workers by employers. This government bill is playing catch-up to Labor's policy. Labor is relieved to see the government following its example, but these actions are woefully deficient and fall significantly short of the suite of legislative reforms and measures which this government should be introducing to address the breadth of worker exploitation in this country. This bill does nothing in relation to sham contracting, nothing in relation to phoenixing to avoid wages liabilities, nothing in relation to reforms to the Fair Work Act to strengthen protection for workers and nothing to make it easier for workers to recover unpaid wages from employers and directors of responsible companies—reforms which I encourage the government to undertake.
Protecting vulnerable workers has always been a priority for Labor, but not the coalition. It is not a priority for those opposite, and the fact that it has taken them so many months since the last election to introduce legislation and that we are only debating it today is evidence of a half-hearted attempt by the Turnbull government. On this side of the chamber, we will not abandon those workers. We will stand shoulder to shoulder with these workers, fighting the good fight to make sure that they have a fair go, a fair pay and a safe workplace.
Vulnerable workers come in many different forms. SafeWork NSW identifies vulnerable workers as including young people, new workers, apprentices, trainees, contractors, workers with low literacy skills or from migrant and culturally and linguistically diverse community backgrounds, workers with a disability and newly expectant mums. Commonly, these are the workers who are vulnerable and exploited by unscrupulous employers. The Turnbull government's recent actions have proved the government has little interest in protecting these people who rely on penalty rates. These are the people who sacrifice their weekends for the workplace to provide for their families. They do it to ease the economic burden in their households and to make ends meet.
If the Turnbull government genuinely cared about Australian families and their economic security—and we will see about that tonight—the economy generally, these young people in particular and the vulnerable workers I mentioned before, they would not allow their penalty rates to be ruthlessly cut. Only Labor is committed to protecting the 700,000 of Australia's lowest-paid workers by stopping these cuts to penalty rates. The government should be supporting Labor's bill to protect penalty rates.
The bill before the House has some good things, and we will support it accordingly. The bill amends the Fair Work Act to increase penalties for serious contraventions, which are described as conduct that is:
… deliberate and part of a systemic pattern of conduct …
relating to prescribed workplace laws. It will increase penalties—and we applaud that—for employers' record-keeping failures, with new maximum penalties extending to false or misleading employee records or pay slips, where the contravening employer knows the documents to be false or misleading. It is a good reform. There is a new provision that ensures franchisors and holding companies are responsible for underpayments by their franchisees or subsidiaries where they knew, or ought reasonably to have known, of the contravention and failed to take reasonable steps to prevent it—an objective test that has been upheld by courts for a very long time. These new responsibilities will only apply where franchisors and holding companies have significant degrees of influence or control over their business networks, and a franchisor or holding company may raise a defence of taking reasonable steps to prevent the contravention.
The bill also expressly prohibits employers unreasonably requiring their employees to make payments. This should prevent employers from demanding a portion of their wages to be paid back in cash, like we saw in the Four Corners and Fairfax stories covering the experience of exploited 7-Eleven workers. Importantly, the bill gives the Fair Work Ombudsman the power to ask questions and to expect compulsory answers in relation to investigations concerning a breach of the Fair Work Act, where failure to answer questions may arise and cause civil liability. And we welcome the increase in penalties for serious contraventions of the Fair Work Act, as well as the increase in penalties for record-keeping failures by employers. These penalties are there to act as a deterrent—to modify behaviour, as it were.
We have seen these instances time and time again, from big businesses to small businesses, across the country. Commenting on this particular bill, the Australian Council of Trade Unions said:
What is clear from these recent wage scandals is that business size is not a guarantee against widespread breaches of workplace laws, neither is commercial success, nor is being a common household name present on many high streets.
We have seen exploitation across a whole range of areas—for example, exploitation in Albury recently involved a penalty of more than half a million dollars, the result of legal action against a cuisine company by the Fair Work Ombudsman for exploitation of five workers coerced into paying portions of their wages under threat of violence, dismissal and withdrawal of support for visas. It is unconscionable that employers should threaten a person's place in this country. The Fair Work Ombudsman is setting penalties and has said they send a clear message to employers exploiting their workers, saying:
These record penalties are a big blow in the fight to stamp out deliberate exploitation of overseas workers in Australia.
Regrettably, some businesses will still attempt to negate the law.
We support the role of the Fair Work Ombudsman and the efforts that have been made to address the abuse and exploitation of vulnerable workers, and we do not accept the criticism of those opposite in relation to our stewardship of the Fair Work Ombudsman when we were in government. We reject that. The ombudsman acts as a single point of contact for advice and information on Australia's workplace relations system. The Fair Work Ombudsman monitors compliance and inquires into and investigates any practice or act which is contrary to workplace laws, awards and agreements. It also has the capacity to litigate. The Fair Work Ombudsman has said in relation to this bill:
Stronger powers … would ensure that unscrupulous operators that habitually ignore our requests and hinder our investigations are held to account; higher penalties would more effectively deter intentional wrong-doing and incentivise employers who are unsure of their obligations to check they are doing the right thing.
In 2015-16 alone, the Fair Work Ombudsman recovered $27.3 million for 11,518 workers who were exploited. These workers deserve protection, not exploitation. They deserve the pay that is rightfully theirs. We will target these issues and we will continue to support the work done by so many organisations, such as workers' representatives like United Voice and the Shop, Distributive and Allied Employees Association, which told the ABC that text messages being exchanged between the employer and 7-Eleven workers demonstrate that the cashback scheme is still alive and kicking amongst businesses. We have taken the view that we should continue the fight in relation to these issues.
An appropriate comment was made in a submission the Uniting Church in Australia made to the inquiry into this bill by the Senate Education and Employment Legislation Committee. It said:
Theft of wages can cause more harm to a person compared to other more minor forms of theft that are treated as criminal matters.
That is very apt. I commend the Uniting Church for making that point. It is a very appropriate point to make. The ACTU stated in its submission to the Senate committee inquiry into this bill:
There is fear amongst many temporary visa holders about the precarious visa status and the potential for deportation over minor, inadvertent or coerced breaches of their visa conditions.
The Federation of Ethnic Communities Councils of Australia said:
Lack of knowledge about the Australian workplace relations scheme, including their workplace rights and entitlements, lack of support networks, social isolation, and language barriers all contribute to this vulnerability.
As shadow minister for immigration and border protection, I am well aware of the important role the Fair Work Ombudsman plays in protecting from exploitation vulnerable migrant workers on visas. The number of disputes involving visa holders resolved by the Fair Work Ombudsman has increased from about five per cent of dispute forms lodged in 2011-12 to 13 per cent in 2015-16, despite visa workers accounting for only seven per cent of the total Australian workforce.
There is a case for change. There have been instances in relation to Myer and to Pizza Hut, to supply chain arrangements in relation to groups involved in poultry processing plants. There have been allegations made in relation to Coffee Club, Caltex, Outback Steakhouse and so many others, including Domino's. We have introduced a private member's bill that would protect workers. We have talked about the idea of protecting penalty rates and protecting workers generally. We call on the government to take up Labor's approach. Labor's bill has a more comprehensive approach to the protection of workers. The government needs to get rid of its half baked, almost laissez faire attitude to this area of work and get on with the job of protecting workers. Ours is a far more comprehensive approach. The government should be addressing issues of sham contracting and phoenixing. We propose strengthening the powers of the courts to make orders requiring directors of phoenixed companies to pay unpaid wages and employee entitlements. The government needs to make sure that the Fair Work Act applies to all workers. The bill we have introduced makes it clear that the Fair Work Act applies to all workers, regardless of their immigration status, and requires the Fair Work Ombudsman to take further steps to inform employees of their rights. We want to make directors of companies responsible. We will criminalise employer conduct that involves the use of coercion or threats, including the commission of serious contraventions of the Fair Work Act in relation to temporary overseas workers. We led the way during the 2016 election campaign, enhancing a comprehensive packaging, and we are calling on the government to pick these reforms up.
We want a bipartisan approach in this area. We are prepared to support this legislation, but the government must do much more. We call on them to adopt Labor's reforms—not a half-baked attempt but the entire suite of Labor's reforms—to protect vulnerable workers in this country. In addition to that, they can certainly take up Labor's protection of 700,000 of Australia's lowest paid workers, who on 1 July this year will lose $77 unless this government acts. We call on the government to act.