Brian Mitchell (Lyons, Australian Labor Party) Share this | Hansard source

I rise today to support the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017.

This is a bill that has been a long time in coming. Too long, but better late than never. While it does go some of the way in dealing with workplace exploitation, it is a shame that it does not go all the way. It is a start, but it certainly does not finish the job. For that, we will need to see a Shorten Labor government elected in order to introduce the measures that will go much further in stamping out the despicable exploitation of vulnerable workers in this country.

But as Crosby, Stills and Nash once said, 'If you can't be with the one you love then love the one you're with.' The purpose of this bill is to amend the Fair Work Act to increase penalties for serious contraventions of payment-related workplace laws; to prohibit employers asking for cash back from employees; to impose liability on franchisors for certain breaches by franchisees and subsidiaries over which they have significant control; to strengthen the ombudsman's power to gather evidence; and to prohibit anyone giving false or misleading information to the ombudsman or from hindering or obstructing an ombudsman investigator.

For too long we have seen too many examples of workers being let down or ripped off by employers, including by some of Australia's best-known companies. The exploitation of vulnerable workers has been examined in a number of reports, including by the Senate Education and Employment References Committee, which published A national disgrace: the exploitation of temporary work visa holders. Shortly after this report was published, the ombudsman published A report of the Fair Work Ombudsman's inquiry into 7-Eleven and A report on the Fair Work Ombudsman's inquiry into the labour procurement arrangements of the Baiada group in New South Wales. So none of this comes as a surprise; we have known of these issues for some time and it is long past time that we acted. The reports have documented numerous cases of systematic underpayment of worker entitlements, deliberately falsified records and coercion of workers to repay employers part of the employee's wages in cash.

The exploitation of workers is reprehensible. It undermines fairness and it tears the fabric of our society. It is bad enough when it is committed by backyard shonks and fly-by-nighters, but it is especially disturbing when it is part and parcel of the business model of some of our best-known and most trusted companies and brands.

One of those companies has been Myer. Instead of employing its own cleaners, Myer puts its cleaning contracts out to market. I can only speculate that it does this in order to drive down the cost of the work. In a bid to win the Myer contract, subcontractors submit bids, often with razor-thin margins. If they are successful, they seek to make their profit by slashing their costs. Unfortunately, this is where the workers are the meat in the sandwich. Their legally protected wages and conditions end up being seen not as a right but as a burden, to be avoided however possible. It ends up being the cleaners—the people who actually do the work to keep Myer looking glossy and glamorous—who pay the highest price. Myer's subcontractors have circumvented laws about minimum pay and conditions by engaging cleaners as contractors, not employees. For too long, Myer has been allowed to turn a blind eye to the people who clean its stores being exploited on sham contracts, as subcontractors to Myer's own subcontractors, resulting in below award wages, denial of penalty rates and superannuation, and the stripping away of occupational health and safety protections. Cleaners are people who work long, hard hours in the early morning, late at night and on weekends, in what is low-paid work even at award wages and conditions. For too long, they have been allowed to fall through the gaps of our national workplace protection laws.

This is what Minister Dutton said of the changes before this House:

Where the franchisor or holding company should have known of the breach, or a similar breach, but did not take reasonable steps to try to prevent it then they may be liable for the underpayments.

Unfortunately for vulnerable workers in Australia, even where this government is following Labor's lead it is falling short. This bill makes franchisors and holding companies responsible for underpayments only where they know or ought reasonably to have known of the contraventions. This is very short of what Labor proposed. We reverse the onus of proof. What we would prefer to see is that franchisors be required to establish that they did not know or could not reasonably have known about the contravention. It reverses the burden of proof, the onus, on the employer such that they should have known something was going on and cannot just say, 'I didn't know. Leave me alone.' This is a stronger test which places evidential but not legal burden on franchisors, and it is a shame this government did not take that up in this bill. It should be the case also that, where a worker makes a claim for unpaid wages from an employer who has failed to keep proper employment records, the employer should have to prove that they have paid the worker what was owed. It should not be the other way around. The worker has no power in this relationship. The worker should not have to prove that they have not been paid; the employer should have to prove that they have.

Unfortunately, this bill also does nothing in relation to a range of policies which Labor took to the last election directed towards the combating of sham contracting, the licensing of labour hire companies and the shutting down of the practice of companies phoenixing, where they close down, liquidate and then start up again to avoid wage liabilities. It fails to take on reforming the Fair Work Act to strengthen protections for workers. It fails to criminalise employer conduct that involves the use of coercion or threats during the commission of serious contraventions of the Fair Work Act in relation to temporary overseas workers. It fails to make it easier for workers to recover unpaid wages from employers and directors of responsible companies.

As well as Myer, we have seen in recent years chronic exploitation in 7-Eleven stores involving underpayment of wages, the doctoring of pay records and intimidation of workers. The footage of workers being made to hand back some of their earnings to their employers beggars belief, and it strikes at the heart of our culture of a fair go. I cannot speak for others on my side, but I would prefer to see those employers stripped of their assets and sent to jail, because there is no room for that filthy conduct in this country. We have seen Pizza Hut delivery drivers paid as little as $6 an hour in more sham contracting arrangements: 'Here's a hat, a shirt and a sign for your car. Congratulations. You're now a sole trader, contracted to deliver pizza.' It is an appalling misuse. We have seen supply chain arrangements adopted by the giant Baiada Group in its poultry-processing plant, which relied on gross exploitation of temporary overseas workers, who were forced to work dangerously long hours for far less than the minimum wage and, to add insult to injury, were housed in overcrowded, substandard accommodation.

These high-profile examples are just the tip of the exploitation iceberg that has been allowed to float and grow for too long. In 2014-15, the Fair Work Ombudsman recovered $22.3 million in back pay for more than 11,000 workers. I am sad to say my home state of Tasmania is not immune to the exploitation of vulnerable employees. Muffin Break, Pizza Hut and Caltex are just three who have underpaid their workers in the past couple of years, and there are live investigations into others.

It must be said that these investigations are often led or started by unions, organisations that this government enjoys demonising but that have proved absolutely vital to stemming this scourge of exploitation. Without unions visiting workers and workplaces, much of this exploitation would go uncovered. The harder this government makes it for unions to enter workplaces, the more it is helping facilitate the abuse of working men and women.

Labor has a long history of protecting workers and their rights in the workplace. We have always campaigned for workers getting a fair day's pay for a fair day's work, and we always will. Labor acted more than 12 months ago to introduce legislation in the Senate to address the wholesale trampling of workers' rights that, sadly, has become rampant under this Abbott-Turnbull government. During last year's election, we promised the following: to crack down on the underpayment of workers with increased penalties for employers who deliberately and systematically avoid paying their employees properly; to ramp up protections for workers from sham contracting; to give the Fair Work Ombudsman the powers and resources to pursue employers who liquidate their companies in order to avoid paying the money they owe their workers; and to introduce reforms to ensure that temporary overseas workers are not being exploited and underpaid and that there is a level playing field for all workers in Australia. The bill we discuss today would be so much stronger if it had included these Labor initiatives.

While broadly supportive of the measures contained in this bill, we are wary of the government's ability to draft legislation which actually does what the government says it does and which does not have unintended consequences. The Senate Education and Employment Committee confirmed we are right to be on our guard. This bill will prohibit the practice of employers demanding unreasonable payments from their workers, such as that awful case of the 7-Eleven workers handing their money back. Labor is concerned that provisions containing this prohibition will not capture situations where employers in Australia essentially sell sponsorship of working visas to people before they enter Australia, as is alleged to have occurred at a Domino's franchise. The prohibition on demanding unreasonable payments from employees should extend to prospective employees as well.

Also absent from this bill is Labor's commitment to lock down dodgy labour hire firms, which employers sometimes use to try to evade their employee obligations. In both Queensland and Victoria, Labor state governments are combating unscrupulous behaviour within labour hire firms by introducing reforms and increasing regulation to protect workers. So this bill in its current form falls far short of what Labor proposed in the lead-up to the last election, which was to stamp out exploitation of workers. Nevertheless, it is a starting point.

Franchisees are now in a position where they will be personally held to account for workplace violations, which is appropriate and fair. Employers who deliberately and systematically deny workers their rights not only deny working people the right to a fair day's pay for a fair day's work; they undercut employers who do the right thing. And there are many employees who do the right thing. We all know of the shonks who get the work because they put in the cheapest bid, able to do so only because they cut corners on wages, conditions and safety. Every dodgy crim who gets away with this behaviour makes it harder for decent employers to win contracts. Increasing penalties for breaches is a strategy to encourage compliance, but the penalties have to be tough enough to act as a real deterrent, not just a slap on the wrist.

Natalie Jones from the Fair Work Ombudsman in her evidence to the Senate Education and Employment Legislation Committee inquiry said:

These operators set up their business model on the basis that a successful investigation or a court imposed penalty is simply a calculated risk or the cost of doing business. They consider the likelihood of being caught … to be so low, that it is worth exploiting their workforce.

We need to stamp out this approach and make sure the penalties are tough enough.

Just in the last few seconds before we go, I will say this: let's be real. If the Turnbull government really cared about vulnerable workers it would stand up for penalty rates. Cuts to penalty rates coming in under this government will hurt some of the most vulnerable workers in this country. Up to 700,000 Australians are set to lose $77 a week. People will be working longer for less pay. Women are disproportionately affected, and regional communities like mine will have less money spent in their communities.

We have made it easy for the government. It does not have to do anything but come into this place and vote to support the Leader of the Opposition's private member's bill, the Fair Work Amendment (Protecting Take-Home Pay) Bill 2017. It will stop the cut, and that will help vulnerable workers. Thank you.

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