Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The question is that the amendment be agreed to.

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

It is my great pleasure to rise in continuation to speak on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. As I said in my brief contribution earlier, I am absolutely delighted that the Turnbull government is introducing tougher laws to protect vulnerable workers from cashback scams and other types of exploitation. The deliberate underpayment of workers is all too common in Australia, and I have to say it is with great pride that members on our side of the House are initiating this very important reform. I commend the Minister for Employment, Senator Michaelia Cash, who has absolutely led the way with this reform, which sends the very strong message that employers who want to rip off workers will no longer be tolerated under a Liberal-National government. That is what this bill is all about. As I mentioned, widespread underpayment, exploitation and ripping-off of workers have been uncovered at a wide range of workplaces, including 7-Eleven, Muffin Break, Gloria Jean's, Subway, Caltex, Domino's and Pizza Hut. Of course, not only is the underpayment of workers unfair and absolutely unlawful for the workers involved; but the competing businesses that do the right thing face higher costs because they are complying with the law.

The government has committed to strong action to protect vulnerable workers, as set out in our policy of protecting vulnerable workers as released in May 2016. Announced then were amendments to the Fair Work Act to tighten the law and increase penalties to prevent worker exploitation and the establishment of a Migrant Workers' Taskforce to target employers who exploit migrant workers and continue to monitor the progress of 7-Eleven in rectifying worker underpayments, chaired by the former ACCC chair, Allan Fels, who was the chair of the Trade Practices Commission. What a shame it was that when Allan Fels—who was doing such a superb job when he was engaged by 7-Eleven to unveil these corrupt and unlawful practices—started to get to the truth, the truth was all a bit too much for 7-Eleven and they decided to terminate his services. Shame on 7-Eleven for that very inappropriate conduct. The policy is also boosting funding to the Fair Work Ombudsman by $20 million to ensure that the regulator has the resources to investigate and prosecute employers who exploit workers. The government has already established a task force and provided the additional funding to the Fair Work Ombudsman.

Now, of course, we have the bill before this parliament. As I said before, I am very pleased to see that members opposite have recognised our good work in this area and are supporting the bill. The bill amends the Fair Work Act to increase penalties for serious contraventions of payment-related protections in the Fair Work Act. These higher penalties, which are 10 times the current penalties, will apply where contraventions are systematic and deliberate. There will be increased penalties for breaches of record keeping and pay slip requirements. Cashbacks and other coercive behaviour by employers will be outlawed, where employees may have been paid correctly but then forced by their employer to repay part of their wages. Mr Deputy Speaker, it seems unbelievable that that happens in workplaces, but I can assure you that it does. In fact, I am very proud of the steps that we took in relation to one worker in Geelong. I will only call him by the name of Joseph. I do not want to identify him completely. He worked at 7-Eleven. He was—

Linda Burney (Barton, Australian Labor Party) Share this | Link to this | Hansard source

You say you do not want to identify him completely. You just have.

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

Excuse me, I will take the interjection from the member opposite. In the media appearances that he made, Joseph agreed for us to call him by his first name only. He did not want his surname identified. Out of respect for Joseph, I have complied with his request and that is why I have not fully identified him. He is happy just to be called by his first name. Joseph worked at 7-Eleven and he was being paid correctly on the books, but, at the end of every pay week, he was being asked by his employer to repay an amount of money in cash. This so-called cashback equated to around a quarter of Joseph's wage. I took Joseph's case to the employment minister, Senator Michaelia Cash, and also to the Fair Work Ombudsman. Senator Michaelia Cash met with Joseph. Allan Fels also met with Joseph. As a result of the minister's intervention, along with the work of the Fair Work Ombudsman, that money was repaid to Joseph and justice was delivered. We are very pleased to see that action taken, but, of course, we also recognise that the law was simply not strong enough. This conduct was happening throughout many workplaces. I have to say, shame on 7-Eleven, which, despite the fact that a whole range of unlawful behaviours and conduct was unveiled a number of years ago, frankly did not take appropriate action to stamp down on this behaviour. We found more instances happening in Geelong just last year. The introduction of this bill is one of the Turnbull government's key election commitments to ensure workers are protected from exploitation by unscrupulous employers.

While I do recognise members opposite are going to support this bill as they say, I have to reflect on the fact that members opposite announced at the end of the 2016 election campaign a policy concerning worker exploitation which really failed to deal with the problem. It exempted small businesses from higher penalties, meaning that most 7-Eleven franchises would not have been caught by the changes that we are proposing and, of course, could continue to get away with this conduct. We do not think that is good enough.

I reflect also on the previous member's contribution when he spoke about the minimum wage. He may not quite appreciate it, but the minimum wage is, of course, set by the Fair Work Commission as part of an independent process. Our government is absolutely adamant that every single employee must be paid in compliance with the law. We are absolutely determined to see an end to exploitation, to workers being ripped off and to shonky deals. That is why we have also introduced into the parliament the Fair Work Amendment (Corrupting Benefits) Bill 2017.

This is a bill which deals with a real scam that has been happening in many large workplaces around Australia. Unions—particularly the Shoppies union—backed by Labor have been working hand in hand with large employers, entering into EBAs which in some cases have either reduced penalty payments to workers on weekends or stopped them altogether. There is a better-off test that is meant to apply if there are changes made to an award under an EBA, and what has been going on is some pretty shonky payments being made by some employers to some unions that have not been transparent. They have not been disclosed. The corrupting benefits bill is all about looking at these deals, shining a light on this sort of inappropriate behaviour and letting the unions' own members know what is going on so that they know the sorts of deals that are being done and whether they are being ripped off.

Perhaps the most infamous case that is discussed frequently in this parliament is the case where Clean Event workers were sold down the river when the Leader of the Opposition was the National Secretary of the Australian Workers Union. But we will not cop the way in which workers in this country have lost their penalty rates under these shonky deals backed by Labor and backed by unions like the Shoppies union. We are determined to stamp out this behaviour.

We are also determined to stamp out the sorts of exploitation we have seen under the 457 regime, and that is why we are absolutely determined to put Australians first when it comes to jobs in this country. Very proudly we have announced a policy again very much concerned with worker exploitation, very much concerned with putting Australians first. We will not be distributing an advertisement promoting our policy which has only white faces in the advertisement. I think that was a pretty regrettable decision made by the Labor Party. We are very focused on fairness and Australians being put first, and that is why we are abolishing the 457 visa scheme and replacing it with a new temporary skill shortage visa. Where genuine skill shortages exist, businesses of course will still be able to employ skilled foreign workers on a temporary basis, but we will not see the sort of escalation of 457 visas we saw when the Leader of the Opposition was the Minister for Employment under Labor and there was a massive increase of about 40,000 457 visas. That simply cannot be tolerated. All sorts of deals were being done where young men and women working at the likes of McDonald's were coming into this country on 457s under Labor agreements. Not only were workers being ripped off under this scheme; but Australian jobs were not being put first. We will not tolerate that.

It was with great pride that I went in to back Joseph, an employee of 7-Eleven, and I am incredibly proud of the way in which we are tackling exploitation of vulnerable workers and caring for vulnerable workers in the workplace. Any exploitation of workers in any workplace is simply unacceptable. There are very strong laws in place in this country, and we are determined to see them enacted. And where the laws are not tough enough, where employers are doing these sorts of deals, like demanding cashbacks, then we will take strong action.

I am also pleased that under this bill we have clarified the accessorial liability provisions to ensure franchisors who are complicit in underpayments will be responsible for rectifying them. This will apply where a franchisee or a subsidiary contravenes a payment related provision of the Fair Work Act and the franchisor or holding company should reasonably have been aware of the breach and could reasonably have taken action to prevent it. The bill provides an express prohibition of hindering, obstructing or providing false or misleading information to Fair Work inspectors who carry out investigations into compliance with the Fair Work Act. There will also be a strengthening of evidence-gathering powers for the Fair Work Ombudsman, similar to the powers held by ASIC and the ACCC, to ensure the regulator can gather evidence where proper records do not exist, and can also overcome the culture of fear that often prevents vulnerable workers coming forward. I commend the Minister for Employment, I commend the government for this very important reform, and I commend this bill to the House.

On indulgence, I would just say to the member for Hotham, who has brought her beautiful baby into the chamber, that this is lovely to see in this family friendly chamber. Your baby is absolutely beautiful, and congratulations again, Clare.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

There are 7-Elevens everywhere, and many people around this country would have gone into them probably more than once or twice. You would expect, with such a large corporation that is owned by billionaires and making an enormous amount of money—and everyone who walks into a 7-Eleven knows what the mark-up is on basic goods that you could get for a much cheaper rate everywhere else—when you are walking in there to buy whatever you need buy that the person working behind the counter is getting paid at least the legal minimum wage in Australia. That is what people thought for a long period of time.

It was certainly the case that the regulators had not lifted the lid and seen what was going on behind the scenes at 7-Eleven. Indeed, many other people who should have known better, who should have had an interest in representing the workers who work in 7-Eleven, had done nothing for them either. What we found out, because of the bravery of a few people who spoke up—and also the tenacity of a number of other people, who I will mention in a moment, who went in there and did the work that really the government and others should have done in the first place—was that in these corner stores, where they were making enormous amounts of money at the top of the chain, people were getting exploited in a way that no-one in this country really thought was possible. We found that some people who were getting paid were then being forced to give part of their wages back in so-called cashbacks scams. We found that rostering was being done such that the hours the people were being rostered for did not actually represent the hours they were working so that proper payment and proper taxes did not have to be paid.

What is worse is that many of these people were too afraid to speak up not only because they would lose their job, which is a reason many people in this country are afraid to speak up—and a reason why we have unions and a reason why we should have government agencies that go in and investigate and regulate—but many of the people working in 7-Elevens were here on visas with work rights. They were incredibly vulnerable because they were being told, 'If you speak up, we will kick you out of the country,' and that is a terrifying position. When someone is lawfully here with the lawful right to work, they should not then be put under the threat of being kicked out if they ask for the right rate of pay. That is bad not only for those people because it exploits them but it is bad for everyone else here in Australia as well because it drives down wages. If someone is an underpaid worker on a visa being threatened with deportation if they get paid the legal minimum, an employer can say, 'I will get someone like that to do the work for half the pay; why should I pay local wages?' It just pushes wages down for everyone. It exploits people from overseas and it exploits people here.

Because of the incredible tenacity of people like Michael Fraser, who went from 7-Eleven store to 7-Eleven store finding out what was going on behind the scenes and helping people document it, because of very good journalists like Adele Ferguson, Sarah Danckert and all their colleagues at Fairfax who spent a lot of time investigating what was happening and reminding the country why we need well funded and well resourced journalism here, they collectively, with a number of brave souls who were prepared to step forward, blew the whistle. When they blew the whistle and it became apparent publicly and in the media what was happening, what happened? Did the government act? No.

The Greens referred it to a Senate inquiry because we knew a law needed to change to address this exploitation. During the course of that Senate inquiry, as the lid was pulled back even further, some horrific things became apparent. Most of the payroll services for these small corner 7-Eleven stores were being done through head office. What became apparent from some people who were brave enough to step up was that people in 7-Eleven head office would boast about these arrangements that they had struck with franchisees. They knew there would be no consequence other than people being underpaid so they then turned a blind eye to it, saying, 'We are not responsible; it is the franchisees who own the 7-Eleven stores who are the ones who are underpaying, not us in head office; our hands are clean.' That was what they said.

The more we dug into this, the more that people like Allan Fels came and looked at it. Allan Fels, former head of the ACCC, made a very strong statement when he said the only way that the 7-Eleven franchisees could make a profit was by ripping off the workers. That is how the contract between that head office and the small business franchisee was structured. It was not just the workers who were getting done over; the people who bought into these franchise operations were also in many instances getting done over because head office was saying to them, 'You have got to funnel money back to us every week. You have got to this and you have got do that and you have got do it in such a way that it leaves you with no option other than to underpay people.' The lid was well and truly lifted, the whistle was blown, and it become crystal clear that this was something that was orchestrated and known about at the highest levels within 7-Eleven. It was no surprise that there was a big change over. Before the election, they came out and said, 'Sorry, we have done the wrong thing. Let's employ a panel to look at it.' And then because as the election was out-of-the-way, because they knew this was an issue the Australian public cared about, that has all been chucked in the bin and a number of people are now left with no option other than to pursue legal action.

What is more worrying is that investigative journalists like Adele Ferguson, Sarah Danckert and others from Fairfax made it clear that 7-Eleven is perhaps only the tip of the iceberg. It is happening at Caltex they are telling us. It is happening at Domino's. What we are seeing time and time again in these household names that we all walk past every time we go to the shops or to work is head offices making the money, and not only the workers but often the franchisees are getting done over.

It is that that we need to fix because what is apparent in every franchise operation is they all look the same. They all look the same for a reason. That is because their head office says: 'We're going to control down to the most minute detail. The sign that you put at the front is going to be a good looking sign consistent with our branding. We're going to control the stock that you have on display. We're going to come in for regular audits to make sure that you are representing our brand well.' They control almost everything that many of these franchisees do, but the one thing they pretend to turn a blind eye to is wages. They say: 'We're not going to exercise any control over you from head office about what you do for wages. If you happen to be underpaying people, we're going to hang you out to dry.' That is what needs to stop. We know now many large franchises are operated with the head office taking all the money and profit, making the small business who runs it carry the legal risk if there is underpayment and, at the end of the chain, doing over the worker who sits at the bottom.

We have to make sure that we change the law to stop head office where the money ultimately goes up to. We have to stop head office from being able to wash their hands of responsibility when they have franchises that are trading under their name and for all intents and purposes appearing as if they are part of the same entity. Domino's, Caltex and 7-Eleven all appear as if they are part of the same entity. They all profit from having been part of the same brand. So there should be some shared responsibility.

Unfortunately, this bill does not do that. This bill has picked up on the public outrage and the knowledge that there is something wrong in this country when a worker working at 7-Eleven over the weekend gets paid less than the legal minimum wage but the owners are billionaires. People know that is wrong. But this bill does not shift any responsibility back home to that billionaire. It says that if someone gets underpaid by the franchisee—and we know that in many instances that would be because the head office has leant on them—in some instances, you might be able to hold the head office responsible. But, if the head office has good enough lawyers, they are going to be able to use provisions of this bill to get out of it. Instead of this bill making the head office responsible, it says, 'You are only responsible if you knew or could reasonably have been expected to have known that the franchisee was underpaying the worker.' 7-Eleven could have used bits of this bill to say: 'We didn't know. We couldn't have been expected to reasonably know. We asked the small business operator to say and do the right things and promise us everything was going to be okay.' This gives them a potential way out.

It is an appearance of action. Some bits of this bill are good and will make a difference for exploited workers. But, at the guts of it, it does not shift home responsibility to the head office where it ought to. The government should have had a look at the Greens bill that we put out well before they came to the party and said that they wanted to do something. We have a simple solution that would give effect to what the government says is the intent of this bill, but the government has to put its money where its mouth is. We are going to move to amend this bill to close that loophole and make sure that the head office is responsible. And we will move an amendment so that, if you are an underpaid 7-Eleven, Domino's or Caltex worker, you can go straight to head office and claim your underpayment. If you win a court case, you can claim it against the head office. It will then be up to the head office later on to go and have a battle with their small business franchisee about who is responsible. It should not be the worker who is left in limbo trying to chase a small business who might have no money at all, trying to prove what happened inside the internal boardroom meetings at 7-Eleven, Caltex or Domino's. It should not be left up to them. It should not be the case that large companies can use legal sophistry to get out of underpayment claims. Our amendment will say, 'Worker, go to the head office, get your money back and let them fight internally within 7-Eleven, Caltex or Domino's about who is responsible.' That is the only way to do it that is fair to the worker.

If that amendment is accepted—and I urge the government to consider it and accept it—it will also drive culture change. So long as the person in head office thinks, 'Oh well, I've got a legal loophole to push things back onto the franchisee,' they think: 'I'll just say I took all reasonable steps. It's not my problem; I'll wash my hands.' If we pass this amendment, it will drive a culture change because the head offices of 7-Eleven, Caltex and Domino's will now have an interest in making sure that the people under them are properly paid.

What it will mean is that, when the people from head office go to the store and do the audits that they do all the time to make sure that the chewing gum is standing in the right place and you have the right ads on display and the sign looks right, they will also go and check the wages books, and they will also ask the employees, 'Are you being paid correctly?' They will start to take some responsibility because they will know they might have to, in the first instance, cough up the difference themselves. Yes, they can go and chase it back from the small business at the end, but they will know that they will have some responsibility themselves. So we will stamp out this exploitation.

So it is a very, very sensible amendment that we will move. It is one that the government has to support because, if it does not support it, it is sending a green light to the 7-Elevens and the Caltexes and the Domino's: 'It's okay for you to continue what you're doing, because we'll pretend in parliament to take some action, but we'll give you a couple of tricky legal ways out if you're sensible enough to find them.'

There are some other problems with the bill as well that will allow clever lawyers to work their way around it. Those have been identified in the various Senate committee reports, and those amendments should be supported by the government as well if they are actually serious about this rather than simply giving the appearance of being serious.

There are a couple of other areas that we need to fix up as well with amendments. We are finding many times that records have not been properly kept. When your wages and hours records have not been properly kept by the employer, it can be pretty difficult to prove how much you have been underpaid. In those instances, the evidentiary onus should be reversed. If the employer has not complied with the law and kept proper records, then it should be presumed, when the employee makes the claim, that their version of events is right unless the employer proves otherwise, because that will put the incentive on the employer to keep proper records.

We also should take this opportunity to step outside the franchise system and say: well, we know that these long contracting chains operate everywhere else; perhaps it is time to make head offices more broadly responsible for what happens in their names.

But we have to fix this so that the problem is addressed. I salute everyone who has campaigned so long to make this change happen, and I ask the government now to make it a real change, not the appearance of a change. (Time expired)

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

Before I move to the next speaker, I just acknowledge also the member for Hotham with your son in the chamber. It is fabulous to have your darling son here. I just would remind you that, if there is a division, his vote will not be counted!

Rebekha Sharkie (Mayo, Nick Xenophon Team) Share this | Link to this | Hansard source

I commend the government for putting the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 before the House. Employers who systematically exploit their employees and who systematically seek to avoid their legal obligations for their employees should be held to account.

The Nick Xenophon Team has a strong history of standing up for those who do not have a voice. In its negotiations with government last year, the Nick Xenophon Team obtained a commitment for the introduction of expanded whistleblower protections. When legislated, whistleblower protections for employees will strengthen the operation of this bill, giving exploited workers the confidence to speak out against injustice. I also hope that this bill will be the first of many steps towards stamping out illegal treatment of employees. For instance, unpaid superannuation is a big issue in my electorate of Mayo. The current system of enforcement is ineffectual and a drain on the public purse because it forces employees to rely more heavily on the age pension when they retire, because they do not receive all of the money that is owed to them.

However, when talking about this current proposed bill before us, I think it is important to know that it is pro-business as well as pro-employee. Small businesses are facing the twin challenges of weak consumer demand and rising costs, and they should not have to face unfair competition from within their own business community as well. Whether they are small or large, when businesses do not follow the law they create an uneven playing field for the majority of businesses that are doing the right thing. This bill seeks to level the business playing field by making it untenable to systematically and illegally cut employee entitlements.

This bill is also pro business because it helps to restore public confidence in Australian businesses. In an age of rising scepticism about institutions, Australians are increasingly wary of the rise of self-interested corporatism. Sadly, this scepticism is not always misplaced. The systematic and illegal activity of the 7-Eleven franchise chain demonstrates that corporate abuse can be widespread and entrenched in some business cultures. Capitalism needs to be regulated and harnessed for the good of both its stakeholders and society.

Whether through fear, inaction or ignorance, many employees do not come forward to expose exploitative bosses. This is particularly true of younger employees, casual employees and foreign students, who are our most vulnerable people in the workplace. In the 7-Eleven case, a great number of workers were paid substantially below the award rate and payroll records were flagrantly doctored. Many employees on visas were threatened with deportation if they spoke up about the illegal practices of their employer.

Even after 7-Eleven's culture of illegality was uncovered and some of the stolen wages were repaid there were reports that some of the franchisees had terrorised their employees yet again by garnishing their returned wages, with unconfirmed reports of some employers even escorting staff to the ATM on payday. This 7-Eleven case demonstrates that it is entirely proper that franchisors share some of the responsibility and blame when their network of franchisees systematically engage in illegal conduct.

With great power over profit-sharing must come great responsibility when those profits have been generated. The government is to be commended for recognising the franchisor issue and for taking steps to address this. Cases such as the 7-Eleven case highlight the importance of extending whistleblower protections to employees and to subcontractors. Senator Xenophon and the Nick Xenophon Team have worked tirelessly to enhance and extend whistleblower protections. In our negotiations with the passage of the Fair Work (Registered Organisations) Amendment Bill in 2016 our team obtained a commitment from the government to include whistleblower protections for the corporate, not-for-profit and public sectors. I look forward to the recommendations on the implementation of these protections that will be contained within the report of the Joint Parliamentary Committee on Corporations and Financial Services, which I believe is due by the end of June this year.

These protections will grant exploited employees the opportunity to speak out with less fear of reprisal, and will help to smash these exploitative and abusive organisational cultures in Australia. The whistleblower in the 7-Eleven head office that confirmed the franchisor was wilfully turning a blind eye to systematic exploitation in its network of franchisees is exactly the kind of whistleblower we should be seeking to protect. It takes tremendous courage to stand up for the greater good of others.

Whilst the 7-Eleven case has been prominent in recent years, I want to be clear that the underpayment by employers of workers' salaries and entitlements is an issue that is all too widespread and far beyond the 7-Eleven case. I also want to highlight a workplace law that I continually and systematically encounter as being disregarded. As I mentioned before, that is unpaid superannuation. I am regularly approached by constituents, both young and old, whose superannuation remains unpaid by unscrupulous past and present employers. In some cases, this unpaid superannuation has been in the thousands of dollars.

It is not just an issue of the superannuation contributions, but also of the compounding returns of those contributions that the exploited employees then miss out on. Many companies then end up winding up insolvent and somehow manage to completely evade their superannuation responsibilities. More needs to be done to guarantee that superannuation is paid to employees, and to empower employees to recover that superannuation. In all too many cases, employees quite reasonably assume that when superannuation amounts are listed on their pay slips that they have been paid their entitlements. However, this is just how much superannuation employers owe for a particular period and not necessarily what they have been paid. To avoid this ambiguity the superannuation that has been paid into employees' superannuation funds should be reported on pay slips.

Employees do not have legal standing to recover unpaid superannuation underneath the Superannuation Guarantee (Administration) Act without the assistance of the Australian tax office. They cannot even lodge a claim through the courts. It is the Australian tax office that must lodge that claim and pursue the debt on their behalf. In my dealings, the Australian tax office has been very slow to pursue unpaid superannuation, and their rate of success in enforcing full repayment is nowhere near high enough. I have an example of two constituents who were with the same employer. They both had not been paid their superannuation. When they were paid amounts by the Australian Taxation Office they were getting $1 or $2 a year by the Australian Taxation Office, and yet they were owed many thousands of dollars. A quick calculation of their amounts owed deduces that it would take many centuries for these two individuals to recover superannuation payments that are rightfully theirs. Unfortunately, after several years of ineffective action by the Australian tax office, the company is now insolvent. One gentleman is ready to retire. He has worked his whole life and not been paid super for several years. One is a young man, who has very little in his superannuation account to take him through.

This leads me to my next point, which is that penalties for not paying superannuation must be real and substantial. The current ability of the Australian Taxation Office to enforce repayment is insufficient. So we must strengthen their means of enforcement, and we must ensure that the Australian tax office is adequately resourced to do so. There must be a real inducement for the employer to meet their superannuation obligations to their employees, and not consider this money, to one side, as part of their cash flow. I hope that this bill will at least start to catch and penalise some of those employers who are stealing their employee's security in retirement. Much, much more needs to be done.

I welcome the report of the Senate Economics References Committee, appropriately titled Superbad—wage theft and non-compliance of the superannuation guarantee. I, and my Nick Xenophon Team colleagues, look forward to working constructively with the government to act on many of the report's recommendations.

In conclusion, I support this bill. While this bill penalises systematic patterns of illegal conduct of employers, enforcement needs to be adequately resourced for the bill to be effective. Whistleblower protections, once legislated, will make employees more confident about speaking out against exploitation, yet more needs to be done to ensure that workers also have other paths of recourse to safeguard their workplace rights.

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the amendments to this bill, the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, moved by the member for Gorton, the shadow minister. The government has finally stopped running away from this bill. If I remember, this was all part of an election campaign that ran for eight weeks. Finally, the government came to look at the situation, which is rampant. It is certainly rampant in my community. We had case after case come before us in the newspapers to highlight that there were many, many vulnerable workers being exploited and many being ripped off—there is no other way to say it. This is long overdue and it does not go far enough. It would do much better if the government took on board Labor's policies and implemented them around this piece of legislation. It is good to see that, at least here today, we are doing something about what has become a great shame in our country. A shame where workers are going to work and not being paid appropriately. It is wage theft that has been occurring and been highlighted for us by the media.

The bill goes some way towards dealing with the exploitation of workers, so, for that reason, we support its passage through the parliament. At least it is a start. It is something. Having said that, it is inadequate. It is inadequate for a few reasons. It falls significantly short of Labor's suite of policies and legislative reform that we first announced 12 months ago, well before this government even turned its mind to protecting workers and before Labor forced this government to start talking about and protecting vulnerable workers. This bill does nothing in relation to a range of policies which we took to the last election. It does nothing about combating sham contracting, licensing labour hire companies or shutting down the practice of companies phoenixing to avoid wage liabilities. It does nothing to reform the Fair Work Act to strengthen protection for workers, it does not criminalise employer conduct that involves the use of coercion and it does nothing about making it easier for workers to recover unpaid wages from employees and directors of irresponsible companies.

We should not be surprised that this legislation does not go far enough. We only need to look at this government's record. We only need to look at the fact that they are being driven by media coverage to bring this piece of legislation into the parliament and that they will resist amendments. It is a fig leaf in terms of the issues that have been highlighted through the media, and it is a fig leaf in terms of their track record about protecting vulnerable workers. Of course we have on record their support for the penalty rate cut to drive home the point that they really do not understand the fate of vulnerable workers.

The Turnbull government has no consideration for workers who rely on penalty rates, some of whom are the lowest paid workers in the country. In the electorate of Lalor, we are in the top 10 electorates where people are reliant upon those penalty rates. There are over 8,800 retail workers and over 4,600 hospitality workers who will see a reduction in their take-home pay under this government's watch. They sit with those other workers who have been exploited under this government's watch. It is no surprise that Malcolm Turnbull has again decided to do nothing to protect those workers who are going to face a real pay cut through changes to penalty rates. He has made it clear that he will not stand up for the lowest-paid workers in our community. He has unequivocally supported penalty rate cuts, ignoring how many Australian families will be worse off.

And these impacts are very real. In fact, if we look at some of the other things that this government has been doing, it seems to me that there is an absolute lack of understanding about the impact, of course, on women, who make up most of the workers who rely on penalty rates, and on young people. Young people again have been targeted in this budget through higher education changes, cuts to universities, lowering of the threshold for when their HELP repayments will begin and a rise in the cost of and their contributions on those loans. It is not a surprise that this government does not understand that a $77 pay cut will have enormous impacts on families in the electorate of Lalor, an enormous impact on their capacity to pay their bills and an enormous impact on our local economy when that money is no longer being circulated through our economy. Unlike the government, Labor understands the importance of penalty rates and we understand the importance of protections for vulnerable workers. That is why the bill that we have in front of the House would protect the 700,000 workers who will be worse off under the penalty rate cuts.

The bill in front of us does not go far enough to protect vulnerable workers even aside from the penalty rate cuts. It does not go far enough to protect those workers that we have seen on the front pages of our newspapers who have suffered from wage theft. The government cannot hide the fact that they support cuts to low-income earners and that they are presenting for us a fig leaf for vulnerable workers. It is a thin veil that this government is sitting behind today. We know that inequality in Australia is at a 75-year high with wage growth at historic lows and underemployment and unemployment at record highs, but this government decides to continue to pursue the cut to penalty rates while providing a $50 billion cut to big business.

Denying workers a fair day's pay for a fair day's work is one example of employers who make a mockery of workers' rights. Many employers undermine worker welfare through the deliberate and systemic denial of these rights, and we have seen that across our papers. I think it is worth stopping to really think about this for a moment. It is my belief that in this country, in this economy, our industrial relations system relies upon a healthy union environment to make sure that these things work. It is a sad indictment that there are people in our community who believe, quite wrongly, that the establishment of the Fair Work Commission protects workers. As those headlines have shown, the Fair Work Commission can only do the work if workers make a complaint and if those things are brought to light. It is an indictment that we had to rely on investigative journalists to find out and showcase what was happening to workers in this country. I would note that we only knew of this systemic exploitation that has been occurring because journalists uncovered it. In a robust system, with a more unionised workforce, these things would not occur.

Twelve months ago, Labor introduced legislation in the Senate to address the wholesale undermining of workers' rights that has become pervasive under the Abbott-Turnbull government. It is Labor that acted while the Abbott-Turnbull government did nothing to address the serious allegations and shameful treatment of workers by well-known companies. They are here today in this debate with speaker after speaker saying that they are outraged by the treatment of these workers and condemning those companies that have been doing the wrong thing, but they have been dragged, kicking and screaming, to put in place protection for workers. We know—and we have heard speaker after speaker today go through some of the wage theft situations that were occurring—that they were vulnerable workers, many of them on visas, who were being targeted, quite systemically, to provide a low-wage situation for businesses that should have known better and, in fact, did know better.

Many stakeholders have raised concerns that the provisions of the bill that give the Fair Work Ombudsman the power to compel people to answer questions do not contain procedural protections that might have been expected to have been included in such a regime. Many speakers have addressed that today. In particular, the bill fails to meet the procedural protections that apply to the ABCC compulsory questioning power, and that seems to be an anomaly. Giving a government agency the power to compel citizens to answer questions and remove the right to silence is a significant responsibility. It is imperative that we are vigilant to ensure that these powers are proportionate and appropriate safeguards to their exercise are in place. Stakeholders have made strong arguments. We are here because, although there has been consultation and stakeholders have readily been involved in those processes, they think this legislation does not go far enough. The government has chosen to follow Labor's reforms to some extent and to do what has been asked by the stakeholders, but has not gone far enough.

Where a worker makes a claim for unpaid wages from an employer who has failed to keep proper employment records, it should be that employer that is held to account and has to prove that they paid the worker what was owed. This seems such a simple concept. If you sit with constituents who have been part of these processes, it does not take long to realise that there is something wrong with the law when it is up to a worker to prove what they should have been paid and provide pay slips to prove what they have been paid when we know that, in our communities, there are many workers that are not being provided with pay slips. And they are not all foreign workers. They are not all students on visitor visas. They are young people in my community who can come and tell me that they have been working for three years and have not received a pay slip.

Last week, I was in the electorate talking to a person. We were chatting about her new job and how much she was enjoying it and, over the course of the conversation, she then started to talk to me about the superannuation that had not been paid to her in her previous job—three years worth of superannuation. We all understand the way the superannuation system works. We understand that the early money in that process is what is important. We understand the low-income superannuation contribution. Labor introduced that for that very reason—to encourage young people and to have young people understand how important it is to get those superannuation contributions happening early. Yet, despite that, we have employers out there who see that as part of their cash rather than as part of the pay to their workers. This is rampant in communities like mine, and this legislation does not go far enough to stamp it out. The early money is critical to ensure that people have the retirement funds they need. This government saw the light and reintroduced the low income superannuation contribution. They put it back, so they understand the importance of early money. You would think, therefore, in looking at this legislation that they would take the advice and go further than they have done, Mr Deputy Speaker.

As I have said, the bill does not go far enough in that area, nor does it go far enough to address the casualisation of the workforce that is happening under this government's nose and on this government's watch. In fact, one could argue that all of these things together are driving down wages and conditions of Australian workers and that that is why this government does not want to act. I and many of the residents in the community I live in and represent actually believe that it is part of the overall plan. The government did not address the issues of sham contracting and did not address the issues raised around labour hire companies when there was clearly an opportunity to do so and public goodwill to do something about this exploitation. This government should have taken further action but they have chosen not to. They have chosen not to listen to stakeholders. They have chosen not to look into registering labour hire companies or addressing workers' rights under those contracts. For that they should stand condemned.

Labor agrees with what this legislation is doing, but we would argue strongly that it needs to go much further than that. Workers—not just vulnerable workers—need protection. The number of workers we can now put into that vulnerable category is growing every day. I have real concerns about the levels of anxiety people are living with in the community I represent. A number of people are working through third-party labour hire companies are sitting up until midnight to get a text to know whether they have work tomorrow. They are having dinner with their families and not sure how many days of work they are going to get this week. This number of workers we would call vulnerable is growing every day, and the legislation which this government brought into the parliament is not going far enough to protect them. I would encourage the government to look again at the amendments Labor is proposing to go further with this legislation and to get serious about protecting vulnerable workers by reducing the number of vulnerable workers by taking real action about industrial relations in this country.

I will make a final comment: I believe that the market cannot do this work on its own and institutions cannot do this work on their own. What we need in this country is a healthy union sector that can do this work for us. Workers do not get exploited when they have representation. It really is that simple.

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to 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.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

It is with pleasure that I rise to speak with my Labor colleagues on the bill before the House now, the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, the government's proposed solution to what is a massive problem of systemic worker exploitation in this country. Firstly, I think it is timely for us to make some reflections on the status quo, the context in which this bill emerges. We really need to shine a light on the government's track record to get to this point where we are today. Let's be clear: this is not a government that is the friend of Australian workers. In fact, from day one they have waged a savage and relentless war on workers' pay and conditions. They have ruthlessly pursued unions and tried to shackle the ability of men and women to unite in any way to represent their interests in the workplace. They have savagely cut staff from key front-line government agencies, reducing services and leaving thousands of remaining workers still waiting for a pay rise more than three years on. They have delayed superannuation increases for seven years, costing workers thousands of dollars in retirement savings and putting a massive strain on future governments that will have to spend more on pensions.

The government has also cut the Tools for the Trade program, and support for apprenticeships is now at record low numbers. The government has re-opened a 457 visa loophole that will allow employers to hire an unlimited number of foreign workers under temporary work visas without scrutiny. It has signed a free trade agreement with China which would have allowed employers to hire workers from overseas without having to advertise jobs for local workers first. This would now be enshrined if it were not for Labor, which was able to negotiate important amendments to safeguard Australian jobs. Similarly, Labor held off attempts to pass legislation that would see 93 per cent of Australian seafarers replaced with foreign workers earning as little as $2 an hour. Sadly, the government cut support for Australia's car industry and goaded Holden to pull out of Australia, resulting in the loss of tens of thousands of jobs. I see the member for Wakefield has joined us in the chamber, and I know that that is an issue that he has pursued relentlessly. He has articulated the pain and suffering of workers in South Australia on those job losses in shipbuilding and in car manufacturing.

Not content with destroying existing industries, the government has also turned to slashing funding and support for the very sectors that we need to create jobs of the future, industries like renewable energy and science and innovation. Those Australians who believed that the member for Wentworth would lead to a more progressive, worker friendly government were quickly disabused of that notion. If there is one thing we have learnt about the member for Wentworth in the past year and a half, it is that there is no personal conviction, no moral standing and no firmly held belief that he will not sacrifice in order to keep the top job. Mr Turnbull's precarious grasp on the leadership has seen him do anything to appease the right wing of his party and the business lobby. As a result, under the member for Wentworth things have got much worse for many workers then we could have imagined. In fact, the very justification the Prime Minister used to take the country to a double dissolution election and an eight-week campaign was to get support for two thoroughly antiworker bills, those dealing with registered organisations and the re-establishment of the failed and draconian Australian Building and Construction Commission.

Soon after gaining the top job, the Prime Minister morphed from the man who championed a strong safety net and high wages to the man who is backing cuts to Sunday penalty rates for some Australia's lowest paid workers. These low wages will become the new low benchmark for the bargaining agreements yet to be negotiated and the award decisions to be determined in the future. Today it is fast food, hospitality and pharmacy; tomorrow it could well be hairdressers, nurses and cleaners taking the hit. As if that was not bad enough, the Turnbull government followed up with a submission to the Fair Work Commission arguing against increases to the minimum wage, despite record low wage growth in this nation and a 75-year high inequality. Even Mr Turnbull's announcement that he was abolishing—I use the word loosely—the 457 visa, was quickly revealed to be a hollow stunt. It will affect only 8½ per cent of overseas workers who are currently in the country on 457 visas. The trade minister had already refused to rule out waving requirements are companies to look for Australian workers first before hiring overseas in future trade agreements.

While the government has spent the last four years attacking workers' rights, big business has been showered with favours. The Turnbull government remains determined to rob schools, hospitals and universities to pay for its $50 billion big-business tax cut, even though its own modelling shows that that will deliver only a one per cent boost to growth, and even that minuscule amount we are going to have to wait 20 years for. That is the government's own modelling. That is not what Labor is saying. That is the government's own modelling.

They have also failed to do anything meaningful on multinational tax avoidance, which is estimated to cost the federal budget $6 billion a year. This is $6 billion that we would be investing right now in health, education, critical infrastructure—things that are really going to drive jobs in this economy.

With this track record, it will not surprise you that those opposite have taken literally years to act on widespread reports of despicable worker exploitation. In fact, the story first hit the mainstream almost two years ago, when Fairfax Media joined forces with Four Corners for a groundbreaking investigation into the scandalous behaviour of the 7-Eleven franchises. Journalists acted on whistleblower information and found that not only was worker exploitation happening but it was a fundamental element of the franchise business model.

In September 2014, Fair Work raided 20 stores across the country and found that 60 per cent of those stores were underpaying staff. Stores regularly required workers to undertake many hours of unpaid training. Time sheets were doctored. Workers were owed tens of thousands of dollars in unpaid wages, with one worker lodging four separate Fair Work claims amounting to $140,000. One worker worked at four different stores on the Gold Coast, and he was underpaid at every single one of them. Some workers were officially paid the correct amount but then told by their bosses that they had to return a very substantial part of their pay packet to their bosses in cash or lose their jobs. Franchisees said their businesses could not possibly make a profit if they paid the legal wage entitlements. What an indictment.

Meanwhile, the head office of the multinational chain, with more than 16,000 stores in 16 countries, recorded annual profits of $1.44 million in Australia and took a 57 per cent share of gross profits from the franchisees. This despicable business model preys on vulnerable Australians, especially students from overseas, who are often terrified to speak out for fear of losing their visas. Many who did complain were threatened with deportation.

But the 7-Eleven scandal is just the tip of the iceberg. Since these revelations, we have heard reports of systemic exploitation, wage theft and fraud occurring in a number of companies. This year alone we heard about the widespread underpayment at Caltex, where staff were doing night shifts for half the legal rate and were not receiving any tax returns. Then there was the Domino's scandal, which revealed that not only were workers not getting paid what they were entitled to but franchisees were selling sponsorship to prospective workers from overseas for as much as $150,000.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Outrageous!

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

It is outrageous. This is happening right here in Australia under the watch of this government. These shocking revelations of gross exploitation keep coming, but the government remains largely deaf to the problem. This egregious behaviour is not just a problem for workers; it is also a problem for the vast number of employers who do the right thing, because it gives unethical organisations and employers a commercial edge.

This slippery slope must end. We never want to see the day when worker exploitation is a prerequisite in Australia for business survival. This bill before us today goes some way to addressing the problems. It is not the bill that Labor would have introduced. In fact, it falls well short of the standard we believe is required to protect vulnerable workers. We will support it today, but action is desperately needed to address this crisis.

The bill amends the Fair Work Act to increase penalties for deliberate contraventions of workplace laws which are part of a systemic pattern of conduct. It expressly prohibits unreasonably requiring workers to make unreasonable payments. It also increases penalties for employer record-keeping failures and makes franchisors and holding companies responsible for underpayments by their franchisees or subsidiaries where they knew or ought reasonably to have known of the contraventions and failed to take reasonable steps to prevent them. It gives SES employees and the Fair Work Ombudsman the power to compel people to answer questions in investigations into breaches of the act.

This bill is, as I said, a reasonable start, but it goes nowhere near the commitments Labor made just 12 months ago to address a wide range of issues facing workers. Firstly, it does nothing to combat the sham contracting, nor will it address problems with labour hire company licensing. Similarly, the legislation will not help those people who have been caught up in phoenix businesses. These are the companies that build up extensive liabilities and then fold, only to be reborn as a new entity that cannot be held responsible for the former company's debts. Nor does the bill criminalise employer conduct that involves the use of coercion or threats during the commission of serious contraventions of the Fair Work Act for temporary overseas workers, and it will not make it easier for workers to recover unpaid wages from employers and directors of the responsible companies.

I would now like to turn to some of the most serious deficiencies in the bill. Firstly, it makes franchises and holding companies responsible for underpayments by their franchisees and subsidiaries where they knew or ought reasonably to have known of the contraventions and did not take reasonable steps to prevent them. I can see that it is really an opportune time for members opposite to lend support to Labor's own bill on the table, which has been before us in this parliament before. That is to strengthen workplace rights and entitlements. It is a great opportunity for the government to bring on Bill Shorten's private member's bill, which, as I said, would protect workers' pay from current and future decisions that would seek to perhaps reduce minimum wage in this country.

There is much more work to be done in this space in trying to truly eradicate worker exploitation in this country. I think a first step might be a generous sign of bipartisanship from members opposite, standing up for those workers who are about to get the chop on their Sunday penalty rates and are facing a loss of $77 per week out of their pay packets. That is a straight pay cut. People are going to have to work longer for less money, and regional communities, we know, are set to lose millions in the interim. If these cuts to Sunday penalty rates proceed, they will absolutely belong to the Prime Minister and to each and every Liberal and National Party member who stood by and did nothing.

Cathy O'Toole (Herbert, Australian Labor Party) Share this | Link to this | Hansard source

Whilst I welcome the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, I find it difficult to contain my dismay in speaking to this bill, as I find it outrageous that the Turnbull government have put this bill forward claiming that they are actually doing something for workers, especially after listening to the budget last night, where the Prime Minister and the Treasurer chose millionaires and multinationals over vulnerable workers. The Abbott-Turnbull governments have been dragged kicking and screaming to bring forward any measures to address exploitation of vulnerable workers. Whilst I support the bill, I want this government to note that our fight does not stop here, as this bill falls incredibly short of adequately protecting workers' rights and Australian jobs. Access to a job where workers' rights are protected is a human right. Try as this government may to pretend to be down to earth or one of us, the reality is that this government will never stand up and protect workers, and it will only ever be the Labor Party that will take up the fight for the underdog. It is really too hard for workers to believe that this government has even one iota of understanding of the issues facing average Australians today, especially our most vulnerable workers. It is a bit rich when you have members in the Turnbull government wearing expensive cashmere jumpers and stashing millions in the Caymans.

This bill falls short of Labor's suite of policies and legislative reforms. The measures in this bill simply do not address the extent of worker exploitation, which is of rampant proportions, under this LNP government. This bill does nothing to address combating sham contracting; licensing labour hire companies; shutting down the practice of companies phoenixing to avoid wage liabilities; reforming the Fair Work Act to strengthen protections for workers; criminalising employer conduct that involves the use of coercion or threats during the commission of serious contraventions of the FWA in relation to temporary overseas workers; or making it easier for workers to recover unpaid wages from employers and directors of responsible companies. But what we have seen is the focus very clearly on unions as the enemy. And it is very clear that unions are the only safety net that a vulnerable worker has.

What about the elephant in the room: the huge, gaping hole that affects 700,000 workers, more than 13,000 workers in the Herbert electorate and more than 42,000 across North Queensland? Nowhere in this bill are penalty rates protected. It is clear that the Prime Minister is trying to draw a line in the sand and clearly ignore the rights of hundreds of thousands of Australians who will receive one of the largest national pay cuts since the Great Depression.

The Turnbull government seem to want to Americanise Australia. They want to privatise Medicare. They want to ruin our public and Catholic education systems. And they want a clear class divide where it appears that the rich can get richer and the poor can simply get poorer. If that is not bad enough for the poor, they also want to cut the wages of over 700,000 vulnerable Australians, and 13,000 of those are in the electorate of Herbert.

I stand here today to say to the Prime Minister that the Herbert community does not want an Americanised Australia. We want access to quality health care when we are sick. We want all children to have access to quality education that meets the needs of every individual student. We want a fair day's pay for a fair day's work, and we do not want your wage cut.

The member for Leichhardt, Warren Entsch, said penalty rates were a huge impediment in the Far North Queensland area, wiping out small business and adding to the region's unemployment. Just how out of touch can he be? Every week I visit at least one small business owner. Out of all of my visits since I have been elected, there are two major problems that regularly get mentioned to me, and they are the rising cost of electricity and the cost of commercial leasing. Penalty rates to date have not rated a mention.

Whilst businesses are closing across North Queensland, the Turnbull government and the member for Leichhardt are turning a blind eye to the real issues facing North Queenslanders. If the Turnbull government really wanted to do anything for small businesses in North Queensland, we would have seen the government match Labor's commitment of $200 million for a hydropower station at the Burdekin Falls Dam, a dam that is five times the size of Sydney Harbour. What is good for the south is surely good for the north as well, yet there is no mention in the budget. Instead, this government will continue to peddle its myths and blame the underdog for businesses closing instead of addressing the real issues.

The Turnbull government had better heed this warning. If you do not, and you do not act to protect penalty rates, you can say goodbye to your member for Capricornia, adios to the member for Flynn, bon voyage to the member for Forde and selamat tinggal—that is Malaysian for goodbye—to the member for Dawson.

I implore this government to support Labor's private member's bill, the Fair Work Amendment (Protecting Take-Home Pay) Bill 2017, which would stop the cuts to penalty rates because we believe in a fair day's work for a fair day's pay. But today's bill is at least a start. Labor have had to leave a trail of breadcrumbs for the Turnbull government to follow, and we will continue to lead the way until vulnerable workers are protected.

Under the noses of this LNP government, there have been shocking allegations and proven cases of worker exploitation and undermined rights. We have all seen the headlines about the disgusting treatment of workers—for example, about Pizza Hut. On news.com, we saw 'Pizza Hut drivers "paid as little as $5.70" per delivery'. On 7-Eleven, in The Sydney Morning Herald we saw 'How 7 Eleven is ripping off its workers'. On the Baiada Group, on SBS we saw 'Foreign workers exploited at chicken production plants'. Multinationals have been making enormous profits by exploiting vulnerable workers who are too afraid, in the main, to speak out.

Every affected worker had to prove that these companies were significantly underpaying them, as if it was not already blatantly obvious. At the moment, it is too hard for vulnerable workers to prove that they have been underpaid where the employer fails or refuses to provide pay slips. This is a significant imbalance of power, which should be addressed by placing the onus on the employer who has breached the act by failing to keep proper records to prove that the worker was paid correctly. The onus of proof should be reversed so that the accessories to a contravention of workplace laws, such as the franchisors, are required to establish that they did not know or could not reasonably have known about the contravention. This is stronger than the test in this bill, which places an evidential but not a legal burden on franchisors. As elected representatives, surely it is our duty and responsibility to ensure that everyone is given a fair go. We must enact legislation and be the measure of balance to ensure that no-one is being exploited. The Turnbull government must do more. They need to do more.

Although, I overall support this bill, I attach to my support an addendum that more needs to be done to protect vulnerable workers, and it starts with protecting penalty rates. In my electorate of Herbert, where unemployment is now at 11 per cent and youth unemployment is nearly at 20 per cent, we have many vulnerable workers who are not even getting an opportunity to engage in the employment marketplace, let alone have their working rights protected. This is simply not good enough. We have young people who have no access to an apprenticeship, because there are no jobs where apprenticeships are offered to them. We have an aged care industry where we know that people are being paid appallingly low wages. For most people working in the aged care industry, if they do not get to work on a weekend where they can get their penalty rates, they are forced to work two or three jobs. The same thing applies in the childcare industry. It is simply not good enough. I urge this government to take every step that it possibly can to ensure that we are protecting the most vulnerable citizens in our community.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. I was stunned last night. The Treasurer got up and we were all waiting to hear what he was going to say. I thought I had seen it all since I have been in this House—it is coming up to 10 years; Mr Deputy Speaker Vasta, I think you have been here a bit longer than me—but I have never seen a government that has had such a level of incoherence in its internal thinking. They have spent four years now just hammering into workers conditions through the ABCC, through the registered organisations bill and through the latest round of penalty rate cuts. The member for Newcastle was talking before about that in relation to the last election. This harks back to the history of the Liberal Party, which has always been about—except for the occasional ceasefire—hacking into working Australians and benefiting the top end of town. I do not mind if that is the philosophy, but what we had last night from the Treasurer was a speech of cant and incoherent babble, really. What really stuck in my craw was this bit—and I will quote him here:

And it’s been a fair while since most hardworking Australians have had a decent pay rise.

He says this to the House in the budget speech on the one night of the year when people are really paying attention to what goes on in this House. I do not think most Australians are tuned in at the moment.

Mr Tudge interjecting—

My colleague opposite is being unkind about my speaking skills. Here is the point: the people of Australia actually pay attention to see what happens on budget night. It is not just an economic document. It is a symbol of the values and political priorities of the government. We had this sort of cant about: 'Oh, geez, it's a pity hardworking Australians haven't had a pay rise. Gosh, who could possibly be responsible for that?' Well, I don't know. Maybe it is a government that sits on its hands when report after report comes down about the exploitation of workers. Maybe it is a government that cheers on cuts to penalty rates. It does not put a submission into the Fair Work Commission to say, 'A cut to penalty rates would be a bad thing for workers and it would be a bad thing for the economy, particularly when we have very little wage growth in the economy.' Does the government do that? No, the government does not. Why? Because government members are so obsessed with their own jobs. We have had two prime ministers and, I think, three or four defence ministers. There is a revolving door of ministerial appointments. Sadly, the deputy speaker did not get a geurnsey. The bar has been set so low that even my friend opposite can get a geurnsey these days. He is going right to the top; he will be in cabinet next. Maybe with the next leadership change you can get a geurnsey for cabinet. You are not in cabinet already, are you?

Alan Tudge (Aston, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

No.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

No. Maybe next time. I made that mistake with Mr Ciobo. I was accusing him of being an assistant minister and he was actually in cabinet. Everybody was laughing behind me. I was not up—

Alan Tudge (Aston, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

It's not unusual for you not to be up with these things!

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

It is not unusual, but who can blame me if I cannot keep track of the ministerial changes under this government?

It is a very interesting situation we have here, I guess, when the government brings in this bill for protecting vulnerable workers. One can imagine, with its title, people listening to this broadcast think to themselves, 'That's good; it's got a good title.' What they do not know is the terrible, almost negligent—not almost, it is negligent—delay, when we know workers are being exploited and when we know workers are being mistreated, and those in government just kind of sits on its hands.

At the same time, it is cheering on cuts to penalty rates. At the same time we are getting reports about how we have to get stuck into the trade union movement either through the registered organisations bill or through the ABCC. There is this sort of idea that we should turn the screws every day on the only institutions in this country that really have their heart in protecting workers—the trade union movement. The trade union movement is not without its flaws, but overall it has been a patriotic, decent and very Australian institution which has added to the character of this country right from Federation onwards. We have one of the few constitutions in the world which has an arbitration power in it and protection for workers in it. Why is that in there? Because they had to get workers' votes and they had to get the support of trade unions to get Federation up, so the arbitration power was put in there, I think, after two or three referendums. The unions have added a great, important part of our culture: that idea of fairness.

The government received a report of Baiada Group with a date of publication of June 2015. That report said there has been:

Exploitation included significant underpayments, extremely long hours of work, high rents for overcrowded and unsafe worker accommodation, discrimination and misclassification of employees as contractors.

I know that this also affected Australian workers, so this report was no news to me. If you went down and asked the South Australian branch of the National Union of Workers they could have told you all of this. These reports were around well before. There were newspaper reports and other information in the public domain well before the report from the Fair Work Ombudsman. But this government got an official report from a government body, and what did it do? Nothing.

Then we fast forward. There are many newspaper articles, including some good work by The Sydney Morning Herald and The Age about worker exploitation. Then the government got a report on 7-Eleven in April of 2016. Again, there are a whole range of issues. The executive summary states:

Investigations of stores included in the 20 store sample and of stores investigated as part of the wider Inquiry have led to a range of enforcement actions, including:

So what do the government do in response to that? Well, we know what they did: they did nothing. They just continued on their merry way—the ABCC, registered orgs and cuts to penalty rates—as if this is not going on.

I have some personal experience about these matters, and I will tell the House about them, because the other side of parliament is always telling us about how people in the Labor side went to university and never had a real job and blah, blah, blah. We hear that from those opposite all the time. But I have had some experience in this because I was a trolley collector for a while and I was a cleaner for a while. I worked for a company that did not pay its penalty rates, often did not pay its workers and had a boss who, while he was a nice enough fellow, you would have to chase sometimes for your wages and sometimes for other things. He would always try and slip one by you. You had to keep an eye on him. He was always going around in the trolley collection game and in the cleaning game undercutting his competitors. The way he did it was that he sliced and diced workers' wages. He did not pay penalty rates.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

Why didn't you pay your union fees?

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

My friend says, 'Why didn't I pay my union fees?' Well, because I got told by the supervisor, 'If you join a union, you will get the sack.' The member for Flynn acts like this is some sort of surprise, but he knows that this goes on. He is a truck driver—an owner of trucks. He knows how the real world works. He knows that supervisors say that to workers sometimes: 'Join the union, you get the sack.'

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

Not up our way.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Not up his way? That is bulldust and you know it.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Order! There will be no interjections.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

A lot of workers in this country want to join unions but they are not allowed to. They are specifically told by their employers. That is what is happening today. I remember when this company eventually folded. By that time I was not working there but my friend Spike was. He had trouble getting his wages and all the rest of it. I said, 'That is pretty bad luck,' and he said, 'It is not as bad for me as it is for the other guys who went into subcontracting trolley collection contracts.' These guys were owed big money—$12,000, $10,000 and all that sort of stuff. There is a chain of contracts and, of course, when the top company went under everybody else lost their money. And it was real robbing Peter to pay Paul stuff, a real race to the bottom. Of course, the only real winners in all of this were Coles and Woollies. They were the ones who were getting the cheap trolley collection contracts. It is not like the workers were winning and it is not even like the small business were winning, because they went broke. They could not do it. They could not undercut themselves into business. We had this whirlpool of competition. You still see it going on today. The Fair Work Ombudsman still has to really focus on trolley collection and cleaning in particular, because they are areas where contracts go to the lowest common denominator. It was not uncommon when I was a union official to meet trolley collectors who were paid $5 an hour, and if you tried to get them to take action they often would not because they were afraid of losing their jobs. We absolutely know that that goes on today.

What is worse than that going on—it went on in my day—is that now it is becoming the norm. It is the norm. There is a vast army of exploited workers out there who operate in an area of a grey labour market where nobody enforces their rights and where they cannot enforce their rights and where they are terribly exploited, in terms of both their wages and conditions and safety and standards. That is against the Australian way. Even the National Party know it. I know that one of the members from Queensland has done quite a bit of work on this because he knows it is not fair to have this army of guest workers in this country exploited and abused and have them being competition for Australian workers.

All the while, this government, while it is hacking into penalty rates, ignores the abuses. It is now blackguarding the unemployed, saying there is this vast army of people out there who will not get a job—absolute nonsense. The reason they cannot get a job is because there is a vast army of exploited workers on 417 visas and other visas taking many of these positions where people might get their start.

The government rolled this bill in here this week very quickly. It is another patch-over on a prime ministership that is failing, on a government that is incoherent, on a government that has had multiple personnel changes and is completely lacking any philosophical underpinning other than being in office. This is why the member for Warringah is so outraged. Whatever you say about the member for Warringah, he stood for something.

If the government wants to convert on the road to Damascus, what it should do is pass Bill's bill. The Leader of the Opposition has introduced a bill into this House which closes down sham contracting, which licenses labour hire firms, and which shuts down phoenixing of firms to avoid the payment of wages, superannuation, conditions, annual leave, redundancy pay and the like. The taxpayer picks up the bill for all of that. Bill's bill criminalises coercion or threats that are used in the commission of breaching of FWA in regards to overseas workers—we know this is happening—and it improves unpaid wage recovery, which is absolutely critical. That is what the government should do. If it is going to do a backflip, if it is going to pretend that it is protecting vulnerable workers, why not go the whole way and just pass the Leader of the Opposition's bill? Pass the Labor bill because we are the only ones who can be relied on to support workers, to protect workers in this country. It has been ever thus; that is our mission.

Richard Marles (Corio, Australian Labor Party, Shadow Minister for Immigration and Border Protection) Share this | Link to this | Hansard source

I rise to speak in support of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. I do so though with a sense that picks up a fair amount of the sentiment that we have just heard from the member for Wakefield. This is a bill put forward by the government when their hearts are hardly in it. Whilst, on the face of it, the issues it addresses are worthy and deserve support hence the fact that we are supporting it, what really shines out from this proposed piece of legislation is the opportunity that is lost.

Sure, it is a welcome development to increase penalties for serious contraventions of the Fair Work Act. It is of course important to increase penalties for failures in record keeping. We do welcome greater responsibility on franchisors in the franchisor-franchisee relationship; although what is proposed here is pretty limited. It is a good thing to prohibit employers from putting in place unfair demands on employees, which, in essence, ask people to pay for a job, particularly in a context where you are talking about noncitizens who are working in the Australian labour market under some form of temporary work visa. Those are good things to do. But there is so much more to be done than to pretend that those measures alone will address the kinds of abuses and exploitation that we have seen in recent years in the Australian workplace. It is plain fantasy. This is not a Band-Aid; it is not even that. What we have is a really significant issue out there and this was an opportunity for the government to come forward and meaningfully address it. Whilst the specific measures in the bill are okay for what they are, they go only a small way down the road of actually dealing with the tremendous issue of worker exploitation and, particularly, of people who are noncitizens who are working in Australia under a temporary working visa and who often do not know our laws and are unable to access services that represent them in the workplace in the same way that citizens do. Measures could be put in place to stop those people, who are very vulnerable, from being exploited.

We do not see those measures in this bill, because, as I said, the government's heart is not in it. They are not serious about putting in place measures in the workplace that could really promote workplace rights and fairness. The governing party today are the party of Work Choices. We saw, in their heart of hearts, what they truly believe should occur in the workplace through that legislation, which is now infamous in Australian political and industrial history. Whilst we have not seen all of that re-emerge, be under no illusion that the fantasies of going down that path are still very much harboured in the hearts of those opposite.

As the member for Wakefield rightly said, if you were serious about actually trying to deal with issues of workplace rights and fairness in the workplace, you would do something towards empowering collective action, collective bargaining and trade unions. Trade unions have been the most important phenomenon in this country's history for providing balance and equality in the workplace. They are the most important phenomenon in this country for providing what has been, over the journey, a relative equality of wage outcomes in Australia compared to the rest of the world, although that equality is fast eroding. Unions matter deeply in terms of promoting fairness and rights in the workplace.

The government is run by a party that is plainly opposed to all of what I have just said. They do not believe in collective rights. They would like workplaces that are based on individual workers having to negotiate one on one with large multinational companies, as if there is something remotely fair or equal about that. Of course, it is worth spending a moment of this, because it goes to how deeply illogical and unfair that proposition is. In a commercial context, the Trade Practices Act prohibits moments of unequal bargaining power and situations that give rise to that. The Trade Practices Act seeks to regulate agreements that are struck in those situations. There is a notion of equality of bargaining power contained in the Trade Practices Act. When you are talking about company to company, that notion is there. It ought to apply in an industrial context as well. There is no way that anyone would think it is remotely fair that a single individual on a wage of $50,000 or $60,000 a year can negotiate on any kind of equal footing with a company with revenues of tens of millions of dollars. There is nothing fair or equal about that, which is why collective bargaining is so important in the workplace and the role of unions is so important. If this government was serious about addressing the kinds of issues that they say need to be addressed in the context of this bill, they would go there. But we will see pigs fly across this chamber before that day ever comes, because it is not in their DNA. Fundamentally, they do not believe it and, as a result, what we have on the table now as a proposed bill is really a shallow, skin-deep attempt to deal with what is a really significant problem.

Make no mistake, there is a real problem out there. You only need to look at the events that we have seen over the past few years, including the incident of Myer, who were using cleaners that were employed by sham contractors, and the really appalling situation that we saw at 7-Eleven with a systematic exploitation of vulnerable workers who were here under temporary work arrangements, which effectively saw their exploitation at the heart of a business model. That is the kind of thing which needs to be dealt with. We saw in respect of Pizza Hut—

Alan Tudge (Aston, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

Clean Event!

Richard Marles (Corio, Australian Labor Party, Shadow Minister for Immigration and Border Protection) Share this | Link to this | Hansard source

Clean Event is not remotely the same kind of proposition as what we are talking about here. There we were talking about people who were being paid in accordance with the law, but this is not what we are talking about in any of what I have just described. That just shows how little is understood about the industrial situation and how, when there is an opportunity to go to the politics of a matter, that is where the coalition will go. In terms of actually dealing with real people's rights, they understand nothing.

We saw in the Pizza Hut situation people being paid as little as $6 an hour under sham contracting arrangements. We saw supply chain arrangements which were put in place by Baiada Group which involved gross exploitation of those who were working under temporary visa working right arrangements in Australia. At Caltex people were being paid $13 an hour—half the legal rate—and not receiving tax returns. At Domino's there were allegations of franchisees actually selling visas to prospective overseas workers, again in a manner which involved pretty well a systematic underpayment of wages. That is what is going on out there. There is a genuine issue of exploitation of working people. It is particularly acute for those who are here working under temporary visa arrangements. As I said earlier, I think that is a function of those people not necessarily knowing their rights.

When I was working in the previous portfolio as the Labor spokesperson for immigration, I had—without naming the country—representatives of foreign countries coming to talk to me about the concern they had about the way their citizens were being treated in workplaces in our country. That says something about the significance of what is going on here. It goes to our standing in the world when you have got those kinds of representation being made, which is why we need to deal with this issue in a substantive and deep way rather than what we have got going on with this particular bill at the moment.

The lost opportunity that was provided here could have been taken up by looking at the kinds of proposals that Labor has been championing for many years now. At the beginning of 2016 Labor put out its Rights at Work policy. A number of the elements of that were contained in a private member's bill: the Fair Work Amendment (Protecting Australian Workers) Bill 2016. That was introduced in March 2016 but was reintroduced on the Notice Paper in August of last year after the election.

It contains a whole lot of measures which would go significantly to dealing with the kinds of issues that this bill purports to deal with and deals with the kinds of problems that I have outlined such as ensuring that the Fair Work Act applies to all people in the Australian labour market irrespective of their immigration status. It required the Fair Work Ombudsman to publish information and provide material about workplace rights and, particularly, the relationship between rights that people have under our industrial laws, rights that exist under our immigration laws and how those relate to each other. It sought to put in place added protections for those in the workplace who speak out or, indeed, even ask questions about what their industrial rights may be. It sought to put in place a reasonable person test when applying a standard to determining whether a sham contract existed or did not. It sought to ensure that directors of phoenix companies could be pursued personally for the payment of unpaid wages to those workers who had not received the proper payment of their wages. Indeed, it would have provided a threefold increase of penalties for a failure to pay the correct wages. It would have provided for a power to disqualify directors of companies which had been involved in breaches of the Fair Work Act. It would have placed new criminal offences in relation to coercive conduct which led to slave-like conditions.

At the election last year, Labor announced a second tranche of policies going to this particular area in the workplace, such as reversing the onus of proof in respect of the accessorial liability provisions of the Fair Work Act—in other words, making it the case that a franchisor would need to prove that they were not involved in a breach of workplace laws that was undertaken by a franchisee—and also, and this goes to a point I mentioned earlier, broadening the way that operated so that it was not simply applied to the franchisee-franchisor model, which is one of the deficiencies of the bill that we have in front of us right now. Additional responsibilities for franchisors is a good thing, but it is limited to that particular kind of legal arrangement or a legal arrangement involving holding companies. But in fact there is a much broader range of legal arrangements where similar phenomena can occur. What we sought to do was to deal with all of those.

We wanted to put in place a legal burden on the accessory, the principal, if you like, to take all reasonable steps to ensure that the direct employer—in the context of the franchisee-franchisor model this is the franchisee—to act consistently with Fair Work Australia. We were also seeking to put in place greater rights to pursue underpayment claims against franchisors and greater standing for workers for their representatives and indeed for the Fair Work Ombudsman.

In the time I have left, can I perhaps briefly mention that one of the greatest opportunities missed in this is of course dealing with the question of the Fair Work Australia penalty rates decision and the potential that has to undermine the take-home pay of so many thousands of Australians. We have a private member's bill put into this parliament by the Leader of the Opposition, as the member for Wakefield said. This was a perfect opportunity to support that bill, which would have protected the take-home pay of all Australians so that the decision of Fair Work Australia in relation to penalty rates would not apply and reduce take-home pay for those people.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to 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.

Justine Keay (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I concur with the member for Lyons, who raised some very valid and accurate factual points to support the amendments to this bill. As secretary of Labor's Australian jobs task force, I have the honour and the privilege to hear some very heartfelt stories of workers who have been victims of exploitation and noncompliance in the workforce. These are the stories that really make you think: what is going wrong in this country? What can a government do to ensure that we do have compliance in our labour market? These are stories that pull at your heartstrings when you hear about the impact it has on these individuals' lives, on their mental wellbeing. It is absolutely astounding that we can sit here in this place—and particularly those on the other side, who are not even prepared to go out and speak to these people face to face and hear those stories. We are putting in place a bill that clearly does not go far enough. So I welcome this opportunity to speak about this legislation because protecting vulnerable workers should be an important role for this parliament.

Labor is supporting the legislation. While it does contain some measures to protect vulnerable workers, like increased penalties and strengthening the evidence-gathering powers of the Fair Work Ombudsman, as I said before, it just does not go far enough. When you hear these stories, you have to ask: why does this not go far enough? And I question the legitimacy of this government when it puts in place a bill when they are not prepared to go out and speak to these workers and listen to the stories that they tell. I know that imitation is the best form of flattery, but in some cases—in the parts of the bill that we do agree with, when you are pretending to be Labor when you are not—it just does not cut it. The coalition pretends to care about workers but I can say they do not, particularly not vulnerable workers. The coalition is not out there listening to these stories.

At the 2016 election, Labor developed a comprehensive suite of policies to protect vulnerable workers: combating sham contracting; licensing labour hire companies; shutting down the practice of companies phoenixing to avoid wage liabilities; reforming the Fair Work Act to strengthen protection for workers; criminalising 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; and making it easier for workers to recover unpaid wages from employers and directors of responsible companies. These are the things we need to be addressing.

You have to ask the question: if the coalition are truly serious about protecting vulnerable workers, why are these measures not included in this legislation? Companies' phoenixing to avoid wage liabilities is just one issue that needs addressing. A phoenix company is one that rises from the ashes of a failed company. It then begins trading as an identical business from the same location with a similar trading name to the other company's. The assets of the former company are transferred to the new company, and no consideration is paid for those assets. The old company then enters liquidation and leaves a number of creditors unpaid.

This practice is wrong, and it is wrong for two reasons. There is the financial loss suffered by the creditors of the former company when they go unpaid, and in nearly all cases the workers also miss out on their entitlements. It is also unfair for the competitors of the phoenix company. If a company is not paying its tax debts or trade creditors then its cost base is lowered, usually to the extent that a competitor cannot match its pricing.

In my electorate, one such company went into voluntary administration. As a result, it avoided creditor payments including employees' entitlements. One creditor was a competitor. I do not know how the so-called party of business would support these types of practices when other local businesses are being disadvantaged. This company transferred the employees to the new company—but with a catch. Under the old company, all employees, permanent, casual and seasonal, were covered under a single agreement. Under the new arrangement, the so-called new company negotiated a new agreement but split the workers off into two different tiers, permanent and casual. Despite their doing the same job at the same place, there are now two different employment arrangements, and of course the most vulnerable workers, the seasonal and casual ones, are worse off than they were under the former arrangements.

The exploitation of vulnerable workers is a nationwide issue. It reminds me of the example recently of seasonal workers in Queensland who made the headlines when a director of that company was treating those workers so poorly that the system actually worked in that instance. But there are many examples where the system does not work. In the Queensland example, seasonal workers were found to be living in inappropriate accommodation. These were workers from the South Seas. They were here—and some of them had borrowed money to come to Australia—to work. It was found that a majority of those workers had not been paid a single cent for the six months prior—not one cent. Some of the other workers, a small minority, were paid between $50 and $300 in cash for that six months work. That is appalling. That is happening under this government's watch, and unfortunately it is not the only case where that is happening. They were living in pretty ordinary accommodation where they were all cramped in together. They were paying fees. Those who were getting paid a small amount were charged a small amount to pay for some of that. Those who did end up going home went home in debt.

Unfortunately, in my electorate I hear stories of the Ni-Vans doing some of the seasonal work where in some cases they are getting charged exorbitant charges for transportation. When you have a bus of 20 Ni-Vans where they are getting charged around $100 a week to travel 10 kilometres to the farm, you have to wonder what is going on there. Why are these people, at the end of the week, left with nothing—absolutely nothing? They are paying exorbitant fees for their accommodation, for their transportation, for food and for other things while they are doing that work, which is really important work, and they are treated this way, where they are left with nothing in their pockets at the end of the week.

As part of the jobs taskforce, I was in Queensland recently and heard the story of a cleaner. She stuck her neck out through the union, who supported her to do this, when she realised that she was not getting paid the right rate, particularly for those after-hours shifts. She was being terribly underpaid. She stuck her neck out and said, 'This is not right.' So what happened? Her shifts were reduced. But the union investigated further and found that it did not just apply to her; it applied to thousands of other workers at this multinational company. They were not paid the correct rate of pay. So one person who thought, 'This is not right for me,' has actually made the situation for thousands of other workers better, and that was due to the support of the union.

I think we really need to start thinking about why the government, in particular, is bashing unions when unions seem to be the only body in this country with the resources and the interest to fight for workers and actually do the compliance. This is the problem. Other than unions, no-one is really resourced well enough to ensure that employers are complying with their obligations. We have workers who feel insecure in their work because they are, in most cases, casual workers. They are completely exploited and paid under the award rate, yet they do not know it. If they stick their necks out, they get treated like this lady and get reduced shifts and a financial loss. In this case, one person was brave enough to stand up and say, 'That is not okay,' and the unions were there to support her. I say to the other side: stop bashing unions and actually understand what they do and the role that they play in the Australian labour market. They are out there ensuring that employers are being compliant—because I tell you what: no-one else is doing it sufficiently. I have raised many examples, but you have to ask the question: how many other shocking examples of exploitation of vulnerable workers are out there?

There is another huge, gaping hole in this legislation that does not protect a group of vulnerable workers who are under attack by this government: workers that rely on penalty rates. These workers are some of the lowest paid in our community, yet this government is happy to support the cutting of their take-home pay. In Tasmania, around 40,000 Tasmanians stand to lose up to $77 a week. Those on the other side may not think that that is a lot of money, but the workers that I speak to know the value of that $77 and it is huge. It can make the difference in being able to fund school lunches for the week or put petrol in the car. It makes a massive difference to their lives.

The old census data revealed that there are over 7,500 workers in the retail, food and accommodation industries in my electorate. I have no doubt that this figure will increase when the latest census data is released showing the increasing trend of using casual and part-time workers. Tasmania already has some of the lowest paid workers in Australia. The McKell Institute has found that a partial abolition of penalty rates will result in the loss of disposable income in the Tasmanian economy of between $15 million and almost $30 million per annum. The impact of that on the economy in my regional electorate is huge. The small businesses out there really need to understand what this means for them. It means less money going through their tills at the end of the day and they need to really understand that this is an economy where you need to support your workers. You need to get that money flowing through because these workers will spend every cent that they have in the local economy supporting small businesses. How will the loss of this income from cities and regional communities be good for local businesses and economies?

It just gets worse, however. This government's support for cutting penalty rates will disproportionately affect women. Women dominate the sectors that will have wages cut: hospitality, retail, fast food and pharmacy. I ask the question: if the Prime Minister is so keen on supporting women and talks about women in a way that suggests he actually values women as participants in the workforce, why is he not saying that we should not support this wage cut? On average, women already earn 17 per cent less than men. How does it make sense to further cut the wages of low-paid women? But this government seems very happy to make low-paid women struggle even more just to get by.

Another story in my role as secretary of Australia's jobs task force was from speaking to a nurse. You might think they are not being affected by the penalty rates cuts but when they are going there and working long shifts 24 hours a day, every day of the week, they are thinking in the back of their minds, 'Are we next?' I spoke to a nurse as part of our hearings around penalty rates. She recalled a situation recently over Easter where she spent the evening on the oncology ward in a local hospital in Melbourne. She got home on the Sunday morning feeling pretty tired, mentally drained and then thought, 'How can I enjoy the festivities with my family after working a really long shift in that environment, looking after those people?' She started to think about the value of her work and the payment of penalty rates really, for her, was the only recognition of the value of the work she did—being away from her family over Easter, coming home in an emotional and drained state and not being able to enjoy those celebrations. She thought, 'Penalty rates are the only recognition that I have.'

We love nurses and value the work they do but when this nurse is feeling that penalty rates are being attacked by those on the other side, she starts to question the value of what is doing. Her daughter wants to become a nurse. She is advising her not to do it because she is concerned that in the future her work will not be valued. She broke down in tears. We were all in tears at the table when we heard this story. You have to start to question: what is the value of penalty rates? It is far more than money. She never once mentioned the dollars that she got through those penalty rates. She talked about the recognition of the value of the work she does—being there overnight with patients who were receiving palliative care.

I say to those on the other side: really start going out in your electorate and talk to these workers. Talk to workers that are being exploited. Start listening to those workers who are receiving penalty rates. Do yourself a favour. You might actually increase your votes at the next election. You might even save your seats at the next election. I am saying to you: if you are going to make this country great again, go out and start listening to these people. It is the least you can do.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. I commend the contribution made by my bench companion on this piece of legislation. Labor supports this bill; I say that up-front. It is past time that the Abbott-Turnbull government acted to protect vulnerable workers. This piece of legislation is not the panacea for protecting vulnerable workers but it is something—slightly more than nothing—I guess. But it does not go anywhere near the protections that the Labor Party announced 12 months ago.

Sadly, this piece of legislation will not combat sham contracting. It will not shut down the practice of companies phoenixing to avoid wage liabilities, something that is particularly rife in the construction industry—and I say that with three brothers who work in that industry. It will not criminalise employer conduct that involves the use of coercian or threats during the commission of serious contraventions of the Fair Work Act in relation to temporary overseas workers—and I note that the member for Braddon touched on that in her contribution. It will not make it easier for workers to recover unpaid wages from employers and directors of responsible companies and it will not protect the take-home pay of the most vulnerable workers, people who rely on penalty rates as so clearly detailed by the member for Braddon, those weekend workers who miss their families for others like my mum did. She was a nurse who gave up so much of her life, and penalty rates made the difference. I can remember her missing out on so many of our Christmases. My wife, when she was a child protection worker, missed out on Christmas Days to help other people but missed out on family. Penalty rates have been part of the recognition of that sacrifice. Sadly, the Prime Minister has shown where his priorities lie, once again, by not standing up for the lowest-paid workers.

He has failed to protect low-paid workers who rely on penalty rates to pay for their essential living expenses. Up to 700,000 Australians will lose up to $77 per week. It does not sound like a lot for some people, perhaps in the suburbs around Point Piper, but I can tell you that there are people who are terrified at the idea of losing $77 per week—people who will have to work longer for less pay. Women will be disproportionately affected and also regional communities. I say as a Queenslander that my state is more regional than any other state. Regional communities will have less money to spend in their communities. Labor believes that it is fundamental that workers get a fair day's pay for a fair day's work. That is a not new concept in Australia. In fact, it is not a new concept in the world. Labor will not sit back and do nothing when it comes to protecting vulnerable workers.

Labor has a private member's bill, the Fair Work Amendment (Protecting Take-Home Pay) Bill, which, if passed, would stop the cuts to penalty rates. The power is in the Prime Minister's hands right now. He keeps hiding behind a decision of the independent umpire but forgets that he has the power to step up in a democratic system like this parliament and save these people from misery. We will always stand up for workers by continuing to press for the passage of this bill through the House. Sadly, this husk of a Prime Minister continues to do nothing.

We know that Prime Minister Turnbull and other members of the government actually support cuts to penalty rates. We know that because we have continually heard it from those opposite. In fact, the Prime Minister himself said in 2005 that he believes there should be a free market so that the cost of labour will be as low as possible. In 2014, on ABC radio, the Prime Minister said that it was 'nuts' that cafes and restaurants closed on weekends, because penalty rates were so high. The Minister for Employment, Senator Michaelia Cash, said on Sky News in 2015 that 'in many industries in Australia, literally the seven days a week now are basically the same day'. I am sure she says that to every church that she goes to in the state of Western Australia. Senator Cash also said in 2015 that we need to cut penalty rates to be globally competitive. And they are not the only ones we have heard. The member for Grey, Rowan Ramsey, said that he was particularly critical of 'unrealistic penalty rates'. Senator James Paterson, that great left-winger from Victoria, said that penalty rates will have to be 'tackled'. The member for Mallee, Andrew Broad, and the Minister for Aged Care and member for Hasluck, Ken Wyatt, have both considered that scrapping penalty rates may be a benefit—and I could go on. There are dozens and dozens over there who fundamentally do not get penalty rates.

The Turnbull government is basically supporting scrapping penalty rates. It does not support vulnerable low-paid workers keeping their take-home pay, despite the reality of the 2017 economic landscape. Let's have a look at that landscape Inequality is at a 75-year high. Not since the Great Depression have we seen inequality this high. Wages growth is at historic lows. In fact, in some quarters it has even gone backwards. Underemployment is at record lows, particularly amongst young Australians. This is not the time to give our most vulnerable workers another kick in the guts. We need to protect these workers who rely on penalty rates to feed their families, to pay their rent and to send their children to school.

The Leader of the Opposition's private member's bill will protect the take-home pay of vulnerable workers. It will protect the take-home pay of all workers under awards. Our modern award system is designed to be a safety net. It is described on the Fair Work Commission website as the 'minimum safety net for national system employees'. Labor's private member's bill will make sure that the minimum safety net for all employees is protected. I cannot stress enough how important it is for all Australians that we protect the take-home pay of workers under our award system. It would be unAustralian not defend it. In fact, last weekend I had some volunteers turn out in my electorate to speak to people about penalty rates on a Sunday. We had stalls in Acacia Ridge, Annerley, Fairfield, Moorooka, Rocklea, Runcorn, Salisbury, Sherwood and Sunnybank. Volunteers came out in force, generously giving up their weekend to support the take-home pay of our lowest paid workers. So a big thank you to Helen, Libby, Frank, Amber, Ben, Leah, Mark, Rod, Sasha, Donna, Laurence, Scott, Matthew, Ken, Annamaria, Scarlett and David—to name but a few. So many people came up to them to sign the petition to protect penalty rates that we ran out of paper.

So we know that Australians care about penalty rates even if they do not benefit from those penalty rates or even, in fact, if they will have to pay a bit more for their coffee, their nurse, their chef or whatever. We know that Australians care about penalty rates. Labor cares about penalty rates. But this government fundamentally does not care about penalty rates and does not care about workers' rights.