Tim Watts (Gellibrand, Australian Labor Party) Share this | Hansard source

Since the 2013 we have heard plenty of talk from those opposite about lawlessness in the workplace and about trade union boogeymen. We have had a $60 million royal commission into allegedly dodgy trade unionist that has produced one conviction. We even had a double dissolution election called on the supposed trigger of those infamous construction industry trade unions. There have been no bounds, no limits and no constraints on those opposite's pursuit of trade unionists in the workforce, yet all of this time those opposite have remained blind, lazy and inactive in response to the biggest scandal happening in this country today: the endemic exploitation of workers in workplaces across Australia. Through all this time the real criminality, the real lawlessness and the real flagrant disregard for the law of our workplaces has come in the form of exploitation of workers by dodgy bosses.

There is endemic wage theft. A study last year found that 80 per cent of international students at the University of Sydney working in restaurants in the Sydney area were being paid below the minimum wage—80 per cent. It is endemic, it is the norm and it is criminal. There is systemic denial of workplace rights. There is targeting of the most vulnerable members of our workplaces, like people in vulnerable visa arrangements and new Australians. New Australians have an introduction to our country not as the workers' paradise people in the trade union movement and the Australian Labor Party worked to create throughout the 20th century but as a dark world of exploitation. The majority of these people on temporary visas ultimately become Australians, and they become Australians after years of exploitation in the workplace.

I have met plenty of these people as a representative in this place of Melbourne's west. A community legal centre in my electorate, WEstjustice, building on the work of journalists like Adele Ferguson, documented the experiences of exploited workers late last year in my electorate in their report Not just work: Ending the exploitation of refugee and migrant workers. WEstjustice met with individuals and groups from settlement agencies, community legal centres, Victoria Legal Aid, law firms, unions, universities, government agencies and other organisations to prepare this report. They prepared over 100 surveys from community workers and newly arrived people from refugee communities. This report documents the widespread, endemic exploitation of migrant workers in Melbourne's west. The WEstjustice report found widespread abuse across numerous industries, including hospitality, retail, construction and care work. Further, their report, and many others like it, has found that the exploitation of workers, particularly migrant workers, has not just been by shady, fly-by-night operators or by small businesses that might not be aware of their legal obligations. It has been by household names of corporate Australia. It has been by pillars of corporate Australia—names like 7-Eleven and Caltex. They have been caught over and over again, yet, for some reason, there still does not appear to be any social stigma attached to the board members and executives who have participated in this exploitation. Where is the sense of shame from these individuals? What has happened in Australia to the most vulnerable workers in our workplaces is a scandal. Everybody involved in it should be absolutely ostracised from polite company in this country.

We have seen reports of franchisees from these organisations paying as little as $5 an hour to their employees. We are seeing reports of employees paid half the award rate or less and, for those who complain to their bosses about this exploitation, threats of deportation. We have seen rosters and time sheets often doctored or mislaid. I can tell you that doctoring time sheets is a deliberate fraud. It ought to be prosecuted as a deliberate fraud. Why we accept these nonsense justifications about mistakes or errors and why the Fair Work Ombudsman does not take action on this I do not know. This is criminal. Scandal after scandal has thrown up evidence of these practices. One whistleblower at the 7-Eleven inquiry, pointing out that there are business models being designed on the basis of this systemic exploitation, said:

Head office is not just turning a blind eye, it's a fundamental part of their business. They can't run 7-Eleven as profitably as successfully as they have without letting this happen … but the reality is it's built on something not much different from slavery.

Migrant workers are particularly vulnerable to these sorts of arrangements. The former Australian Competition and Consumer Commission head Professor Allan Fels, now the chair of the Migrant Workers' Taskforce, says that migrant workers are 'highly exploitable'. He says:

They are willing to work for low pay, because that's better than no work at all, their bargaining power is weak, and they generally have a lack of knowledge about Australian conditions and award rates.

It's also the case that they are generally not unionised, and there might be other ties, family ties, cultural ties, or an obligation around their visa, that means they are vulnerable to exploitation.

Examples of this abound. They include subcontractors at Myer on sham contracts being paid well below the award rates, being denied superannuation and working without the benefit of OH&S protections. It has been well documented that 7-Eleven has been involved in the systemic exploitation of vulnerable foreign workers, including the gross underpayment of wages, doctoring of pay records and subjecting workers to threats of physical intimidation and deportation. Pizza Hut has paid drivers as little as $6. The Baiada group's supply chain arrangements relied on overseas workers being exploited by forced long hours in its poultry processing plants, paid under the minimum wage and housed in substandard accommodation. When we see this kind of exploitation in international supply chains, we take action. We label this as modern slavery when it is happening in other countries, but when it happens in Australia it is ignored. There have also been allegations that Caltex pays its staff $13 an hour on night shifts, half the legal rate, and is not sending out tax documentation to employees. There have been reports of Domino's selling visas to prospective overseas workers.

Employers who deliberately underpay employees not only exploit those workers unfairly; they undermine one of Australia's core values: giving everyone a fair go. They undermine the fundamental principle of a fair day's work for a fair day's pay—a connection between output and reward. They also make it impossible for employers who do the right thing to be competitive. This has knock-on consequences throughout the entire market. Exploitation in the workforce affects wage growth for everyone. I am positive this is part of the reason that we have the lowest wages growth on record in Australia at the moment and no signs of it changing despite the optimistic forecast in the government's budget. It distorts the market.

Labor has been pushing for legislation to protect vulnerable workers for some time. We welcome this government's bill; however, it falls short of Labor's 2016 policy proposals. This bill does increase penalties for serious contraventions of prescribed workplace laws. It increases penalties for employer record-keeping failures. It makes franchisors and holding companies responsible for underpayments by their franchisees or subsidiaries when they know or ought reasonably to know of the contraventions and fail to take reasonable steps to prevent them. The new responsibilities will only apply where franchisors and holding companies have a significant degree of influence or control over their business networks. And the franchisor or the holding company may raise the defence of taking reasonable steps to prevent a contravention.

It is a good start but it does not cover many of the exploitation practices that have been uncovered in the media and in countless reports—practices like sham contracting, which makes it easy for employers to avoid the workplace obligations they owe to their employees. It does not include phoenixing or strengthening the powers of the court to ensure that directors of phoenix companies pay unpaid wages and pay other employee entitlements. It does not criminalise conduct by employers who have used coercion or threats during the commission of serious contraventions of the Fair Work Act in relation to temporary overseas workers.

Twelve months ago, Labor introduced a bill to the Senate to comprehensively address rights infringements. We have acted time and again to protect the rights of all working Australians. The bill we introduced in the Senate provided a comprehensive approach to addressing systemic rights violations. Further to our bill, Labor's 2016 election policy platform included: commitments for increasing penalties for underpayment of wages, requiring franchisors to take reasonable steps in order to assist franchisees comply with labour standards under the FWA, and reversing the onus of proof so the franchisor must prove it was not involved in the franchisee's breaches. We are glad to see the government has finally acted by introducing this bill months after the election and years after these practices became widely known.

Whilst the government appears to be interested in protecting some vulnerable workers covered under this bill, we should not let this debate pass without recognising there is one group that they do not seem to care about protecting at all. These are the hundreds of thousands of Australian workers who face having their penalty rates cut. Labor has a long and proud history of standing up for workers' rights. We have always stood by the working men and women of Australia. Labor will protect our penalty rates and reverse the onus of proof in the accessorial liability provision of the FWA so that a franchisor must prove it was not involved in its franchisee's breaches. We will increase the penalties for instances of underpayment, which are serious contraventions, having regard to the amount owed, the number of workers affected and the period the employer has been underpaying workers. We will impose an obligation on the franchisor to take reasonable steps to assist franchisees in compliance with labour standards under the FWA. We are standing up for workers' rights as penalty rates are threatened across the country. Labor understands that fairness at work helps drive a more productive, competitive and prosperous economy and drives inclusive prosperity for all members of our society and not just benefits for the top end of town.

The government's choice not to overturn the decision of the Fair Work Commission—which is within its powers to do—to limit weekend penalty rates is a stark illustration of how out of touch this government is with everyday Australians' lives. Senator Abetz in the other place—showing just how out of touch he is with vulnerable working Australians—even claimed:

Today's decision will be of benefit to the tens of thousands of young Australians who want to work on weekends who have increasingly found that businesses haven't been able to afford opening their doors on Sundays.

I can say that I have not been contacted by floods of young Australians asking to be paid less for working on the weekend. He failed to take note of the testimony of some employers from the hospitality industry at the Fair Work Commission hearings that it was unlikely they would put on more staff if penalty rates were reduced. Late last year Citigroup conducted a financial analysis that concluded that big retailers such as Myer and JB Hi-Fi were likely to deliver savings from penalty rate cuts to shareholders and not, in fact, bring on more staff. In other words, big business benefits from the decision, yet again, at the expense of vulnerable workers.

The Fair Work Commission decision was handed down just one day after record low wages growth was announced in Australia. A week before that, it was announced that in one quarter alone wages were falling at the same rate that profits were rising. This quarterly result was the first in 40 years. Penalty rates are so important for hundreds of thousands of working Australians. A record 6,000 individual submissions were received by the Fair Work Commission. There were submissions from a huge range of people, including those who were not able to survive on a 25 per cent pay cut. Wage inequality in this country is at a 75-year high. The latest OECD report shows that inequality has continued to grow in Australia, including during the mining boom. The report stated that 'in Australia income inclusiveness has been eroded'. It further stated that 'households from upper-income brackets have benefited disproportionately from Australia's long period of economic growth'. Wages are fundamental to this. We should not be accelerating these underlying trends through policy inaction.

Since 2004, the wages of those working in accommodation and food services have risen by the least of any industry—just 38 per cent, compared with the average of 48 per cent for all workers. Those in retail faired little better, with wages up by 41 per cent in that period. There are 2.1 million workers in those industries. These are the industries where exploitation of temporary migrant workers is most endemic. This is not a coincidence. With wage growth at an all-time low, the decision by the Turnbull government to sit on the fence could not have come at a worse time. Most of the jobs in the hospitality and retail sectors are highly insecure. Many hospitality workers earn half the average work. Income security is important to everyone, but particularly to these workers. This decision cuts the pay of Australia's lowest workers. Penalty rates are not just important compensation for those losing their weekends and social hours; they are also a fundamental necessity for those who receive them. Cuts to penalty rate particular affect women, who make up 54 per cent of the hospitality industry. Many workers will lose 30 per cent of their yearly pay packets.

So in the Labor Party we urge the government to act. we urge the government to protect all workers: act to protect to exploited migrant workers; act to protect exploited temporary employees with sham contracts; act to protect hospitality workers who have had their Sunday penalty rates slashed; act to stand against growing inequality in this country. The country that I was raised in, the Australia that I was raised in, cared about the fair go. We were the workers' paradise. We were an egalitarian nation, where Jack was as good as his master—if not better. We are not the kind of country that stands by while this scandal of exploitation happens all across workplaces in Australia. Labor, when we come into government, will act. We call on the Turnbull government to do so in the interim.

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