House debates

Thursday, 11 May 2017


Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017; Second Reading

10:38 am

Photo of Graham PerrettGraham Perrett (Moreton, Australian Labor Party) Share this | | Hansard source

I rise to continue the contribution I was making on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, repeating that the Labor Party will be supporting this legislation but have serious concerns about its efficacy.

The Turnbull government has been brought kicking and screaming to this legislation and finally have put it into the chamber, but it is nowhere near the standard of protections that Labor took to the last election. Labor's policy addressed the multitude of instances where workers' rights are crushed. Sadly, it is a practice that has become commonplace since the coalition has been in office. They are now approaching the beginning of their fifth year in office but are still acting like they are in opposition and that somehow everything that is wrong with the world is the Labor Party's fault.

There has been a series of high-profile cases where workers have been treated appallingly by some very well-known companies—not fringe companies but well-known companies like Myer, where cleaners were paid well below award wages, were denied penalty rates and superannuation, and were working in circumstances where they had no occupational health and safety protections. The 7-Eleven stores investigated by Four Corners were shown to be systematically exploiting vulnerable foreign workers. There was horrific evidence of gross underpayment of wages, the doctoring of pay records, threats of deportation and physical intimidation. Pizza Hut delivery drivers were paid as little as $6 an hour. As I said, these are not fringe-dwelling companies; these are major companies, major Australian employers.

We have heard of some poultry-processing plants where temporary overseas workers were being forced to work dangerously long hours for very little pay, far less than the minimum wage, and were being housed in overcrowded, substandard accommodation. We have heard of agricultural workers being exploited. I have gone out with the Taiwanese community to see the Taiwanese backpackers that were being exploited both in Bundaberg and in Gatton to make sure that people were informed what their rights are under Australian law—laws that the Australian government should be upholding and speaking strongly about.

Sadly, we saw the Turnbull government do nothing to stand up for these workers who were being severely exploited. The silence coming out of Point Piper on this issue was deafening. But today we can say, finally, they have done something. It is not nearly as much as Labor would do—as a sensible, fair-minded government would do—but at least it is something. This bill is not perfect—far from it. Obviously Labor will always, like a good opposition, closely scrutinise bills put forward by the government. We do have some concerns that, due to some of the drafting, there may be some unintended consequences.

This bill has been to the Senate Education and Employment Legislation Committee for inquiry and there were several issues raised by that inquiry process. Labor is concerned that there is an apparent gap in the legislation. The provision that will prohibit employers demanding unreasonable payments from employees may not capture the situation where an employer demands that prospective employees pay for sponsorship of working visas before they arrive in Australia so that the extortion takes place before the person gets on a plane.

There is a provision that would give the Fair Work Ombudsman power to compel people to answer questions, thereby removing their right to silence. As a lawyer or anyone concerned with human rights would know, that is a very difficult thing to sign away. Sadly, this bill does not contain protections which you might expect for a situation where somebody is being compelled to answer questions.

Provisions that will make franchisors and holding companies responsible for underpayments by their franchisees or subsidiaries to employees have failed to reverse the onus of proof, so the workers that have been short-changed will still have the evidential onus of proving that they have not been fully paid. We saw in the Four Corners investigation and since that people were given a pay packet with the right amount of pay in it but then, around the back of the shop, they basically had to hand back the cash that they had paid tax on. This evidential onus of proof, I think, is a particular problem where the employer has not kept proper records. This sort of employment often has that situation. How can a low-paid worker be expected to prove that an employer has not paid them when there are no employment records available?

As you would know, Deputy Speaker Mitchell, unions do great work in this area of tracking down pay records. Sadly in some of these areas, there is a deliberate attempt to exclude unions from the workforce, to make union membership almost impossible. We know that, where people are not unionised, they will be exploited. That is a basic law of industrial relations for the last 100 or 200 years. Those sectors of the community that do not have high membership get exploited, and that is where a sensible, fair government would step up and do the right thing by employees where there is low union membership. This is especially so if you have government that has those right-wing nut jobs who are obsessed with unions. That is all that they do, those right-wing nut jobs: they are obsessed with taking down unions, forgetting all the great work that unions do in the workplace. We know that is unfair.

If the Turnbull government really understood fairness they would implement the measures that Labor took to the election and they would stop the cuts to penalty rates. If they understood fairness they would stand up for the vulnerable, low-paid workers. Fairness, sadly, is not something that the Turnbull government has any understanding of. I look forward to the day when those opposite give me a list of all the times that employers have spontaneously given benefits to workers. I am waiting for that list to be put forward, because it has never happened. If the labour movement does not speak up, it does not happen!

We see it time and time again, that this Turnbull government has not been fair. We see it in their policies in this horrific budget, giving millionaires a $16,400 tax cut while everyone else actually gets a tax increase. That is just one sign of unfairness. They fundamentally do not understand or care about fairness in the workplace. They fundamentally are not committed to protecting workers rights. We know that; we see that by the voices opposite railing against penalty rates before the Fair Work Commission handed down that decision.

So many of those opposite are from the laissez-faire school of workplace conditions: let the market rip and let the devil take the hindmost! Fairness, I point out to those opposite, is more than a word. Fairness is not an attribute that can be feigned: either you get it or you do not. You can live and breathe it, but you cannot get it from a Crosby Textor focus-group-tested, clinically constructed line. I tell you that. And it is abundantly clear that the Turnbull government does not get fairness. The Turnbull government does not get fairness. The Tories never will—after all, that is why they are Tories.

We see this desperate manoeuvre of a budget, where the Prime Minister goes out there and frames it with his log cabin narrative that he came from humble roots. The only problem is that the logs in the log cabin were made out of gold! He talks about being this humble battler millionaire, whose chauffeur was picked on by the other chauffeurs when he was at school, and how he had these humble origins. He tries to frame himself by that so that he can at least try to convince some Australians that he cares about the lower-paid and disadvantaged people. The reality is that his government—and particularly those people who have hold of him on the Right—do not care about workplace relations, do not care about the lowest-paid and do not care about those people who know that $77 a week taken from them for working on Sunday, those penalty rate cuts, will mean the world of difference. That is a problem.

10:48 am

Photo of Julian HillJulian Hill (Bruce, Australian Labor Party) Share this | | Hansard source

I do not think that I am even going to try to top 'humble battler millionaire', but we will probably hear that again!

I have a few remarks on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. This is a typically weak response from an out-of-touch government. In reality it will do little to actually address the outrageous exploitation of vulnerable workers across Australia. Every hour of every day in every state and territory across Australia, people with little or no bargaining power in the workplace are being exploited by unscrupulous employers.

This takes many forms. It is underpayment, below award or minimum wages. It is superannuation theft, not being paid—wage theft of a different kind. It is being forced to work unpaid overtime. It is being forced to pay kickbacks to employers or to pay other illegal charges for visa fees, tools or uniforms. It is being forced to work dangerously long shifts. Young people are especially vulnerable; they may not know their rights or have fewer options. People most desperate for work are afraid to speak up. And by far, in my view, the most vulnerable group of people in our country now are temporary migrants. The government no doubt hopes that this bill will make people think that they are doing something, 'There is nothing to see here; we really care.' But the truth is that it is about as little as they think they can credibly do and get away with. Something is better than nothing, which is why we will vote for it, but this bill is grossly inadequate. So what does it actually do? The two-word summary is 'not much'.

The title of the bill is Orwellian doublespeak, because it really does not do much to address all of the numerous issues which have been raised in parliamentary inquiries in recent years. It is a weak response that the government probably does not want to do, but which they have been publicly shamed into doing by the scandals at 7-Eleven and other franchises. There are a few increases in penalties for serious contraventions, which are probably hard to prove. There is a bit of a slap over the wrist for recordkeeping failures and there is a rule against requiring workers to pay kickbacks to their employer, which appears to be badly drafted and ineffective. And the bill purports to make franchisors and holding companies responsible for underpayments by franchisees, but even that drafting is flawed and weak and it will be easily avoided. In summary, it will not stamp out exploitation or go any meaningful distance to do so.

The government must be terribly embarrassed by the Senate committee report on the bill, which was released a couple of days ago. Even the government senators criticised the bill and recommended changes, having been forced to sit through days of hearings and hearing reams of evidence from businesses, from lawyers and from unions about the bill's deficiencies and the negative impacts on businesses. As drafted, the bill unfairly singles out franchisors and fails to cover other types of commercial relationships. As business after business said, 'We will just restructure to avoid these provisions. It is not actually going to work.' A proper bill that properly protects vulnerable workers would combat sham contracting. It would provide a national approach to license scam labour hire companies and it would stop companies phoenixing. Phoenixing is when companies are dissolved and do not pay their employees and they just pop up with the same people, the same directors and a different company name, but the directors are not responsible—apparently. A proper bill would make it easier for workers to recover their unpaid wages from employers and directors of companies.

You would think that it would not be a difficult or controversial proposition that the parliament would support laws to fix these things. I would put three simple propositions that, in my view, would pass the so-called 'pub test' anywhere in this country. Firstly, employers should pay their workers what they are owed and must act in accordance with the law. Secondly, if they do not then the law should be enforced by a strong, well-resourced regulator. Thirdly, if there are gaps in the law or the regulatory regime then this parliament and the government of the day—that is those people over there, who are the government, even though they do not often act like it—must actually act quickly and fix the gaps in the law.

Australians support fairness in the workplace and vote against extreme IR laws. Indeed, the only two prime ministers in the history of our federation ever to lose their seats in a general election—Stanley Bruce, who my seat is named after, and John Howard—lost their seats, in large part, because they tried to introduce extreme IR laws. So it beggars belief that whenever workplace issues arise the Liberals have to be dragged kicking and screaming to fix or enforce the law and give everyday, ordinary Australians a fair go.

I will make some remarks about a couple of aspects of the issue and the bill's deficiencies that hopefully will be addressed in a more sensible fashion in the Senate. The first and most substantive issue is temporary migrants. This is a weak bill that will do little to address the exploitation of vulnerable workers. There is overwhelming evidence that the worst exploitation in this country is happening to temporary migrants. Australia now has over 1.2 million people who are legally in this country on temporary visas with some form of work rights attached. There are hundreds of thousands of people in Australia who are here for years on temporary visas. They are people who pay tax and who try to follow the law. Many are making a life here and contributing to Australia but remain condemned to an insecure existence, hopping from temporary visa to temporary visa.

The truth is that they are a growing underclass in our society and they are vulnerable to the most appalling exploitation. Migration status and uncertainty is an enormously powerful threat to any worker. It is difficult for many of us who are born here to truly understand how terrifying this threat can be. In summary, they are told, 'Do what I say or I will dob you into immigration and you will be deported.' It happens to international students, it happens to working holiday makers who want a second year on their visa and it happens all the time to people on 457 visas who want an extension or sponsorship.

We have heard these reports firsthand from unions. Without a doubt, the worst issues which they see day in, day out relate to temporary migrants. There is a fine line, in fact, between slavery and severe exploitation. The old notion of slavery, of course, was forced restraint, but it is not far off to say in a modern context, 'I will take your passport,' or 'I will cancel your visa and deport you from the country.' Labour shortages are one thing, but, really, for many employers the issue is a shortage of exploitable labour. This quote sums up the attitude:

Visa holders are the best workers you can get as if they don't do what you want we'll put you on a boat and send you back.'

The 417 working holiday-maker visas are now a growing and significant issue—bonded labour, in many cases. People are reported to be paying employers to do the 88 hours of work in regional areas to get the second year on a working holiday-maker visa. These are not things we are making up; they are things that have been on TV and in parliamentary inquiries. This bill does not do anything about them. Unions also rightly point out that the focus of government and the media in the public narrative is always on the dodgy illegal workers—'We've got to crack down on the illegal workers.' Yet the reality is that there is supply, illegal workers, and demand, dodgy employers. I think we need more focus on unscrupulous, dodgy employers to provide a stronger deterrent and curb demand for exploitable and exploited labour.

We have heard reports for many years through the media about 7-Eleven and Domino's selling visas, Myer cleaning subcontractors being underpaid, and Pizza Hut drivers and Caltex outlet workers being exploited. We have heard reports of international students. We hear reports of 457 visa holders. The government has heard the reports through the parliament, most recently through the Senate Education and Employment References Committee report entitled A national disgrace: the exploitation of temporary work visa holders. It is shocking reading. It is noteworthy, though, that the government has not even bothered to respond to the report. We cannot find any evidence of the government implementing any of the report's 33 recommendations. Labor, of course, had legislation on the Notice Paper to address these issues 12 months ago. But, perhaps most appallingly, the government is actually set to make these problems worse with the half-baked immigration and citizenship changes.

Australia, our country, used to pride itself on being a permanent-settler-migrant society. Yet, over the last couple of decades, under both governments, we have seen incremental changes and we are now at risk of entrenching a guest-worker or serf class in our country. Minister Dutton's con job on 457 visas and citizenship changes stands to make this problem worse. As an aside on the 457 visa, fundamentally, whatever you rename it and whatever scam you pull on the lists, if there is no proper labour market testing it will be rorted, pure and simple. There is nothing in the budget papers that will implement proper labour market testing. For vulnerable workers, the topic of this bill, the new, two-year 457 visa—whatever it is called—has no pathway to permanent residence. This entrenches, in fact, an even larger guest-worker program in Australia. Even people on a four-year version cannot gain PR for at least three years, and then they have a four-year wait for citizenship.

I want to paint a picture of what will become a scenario under these changes. I used to run international education in Victoria and have quite some familiarity with these issues. We are trying at a national and state level to grow our secondary education high school market. Someone might come here as an international student to do years 11 and 12. Then they will stay on for three years and they will study and pay through the nose. They get a good return, quality education, but they pay for an undergraduate degree, so they have been here five years. Then they may look at these new arrangements and say, 'I'm going to have to do a master's. That'll take a year or two.' Let us say they have been here for six years. If you do a master's, you can have a crack at getting a 485 graduate visa and stay for three more years. You had better hope that in those three years you secure work in your chosen field for at least two years, because then you might be eligible to fill a skills shortage. We are up to about eight years, and with a four-year visa that is 12 years. After three years on that visa you might apply to be a permanent resident, so let us say you have been here for 11 years. After another four years, that is 15 years in this country. So, never having lived anywhere else in your adult life and having paid your way through education, paid taxes, complied with the law, and maybe married and had kids, after 15 years here you might be eligible to apply for citizenship. I have been hearing calls, in fact, that there is a need to explore fairer pathways to citizenship for people like this who live here all of their adult life and contribute, not make it harder. But that is a debate for another day.

Stepping back from vulnerable workers—what does this say about us as a society? If what you want is to set up a society with an exploitable vulnerable underclass then these policies to increase the number of temporary migrants makes sense. If you want to give up on building a cohesive, proud community of permanent settlers who create a life here then this makes sense. That is not the kind of society I want to see, but if that is what you want then ramping up a class of permanently temporary migrants and avoiding real safeguards against workplace exploitation is the way to go. Many people hear this as 'Oh, well, it doesn't really matter. It's some migrants. They're not me. They're not my family' but it has enormous impacts on the broader Australian community. My daughter is 21. Her generation knows perfectly well the impacts it has, because it massively changes the power balance to employers. They can prefer a cheap guest worker, a temporary migrant, to a local person with rights. As I said, it is an enormously powerful threat in the real world to withhold sponsorship over someone. There is an industry in kickbacks, deductions and so on.

The second but less obvious issue is that these non-wage incentives that are so powerful over temporary migrants have an enormous impact on everyday Australians, because wage growth for everyone else in the country is driven down by this underclass of desperate or vulnerable people who have no choice but to cop illegally low wages and awful conditions. This is a serious issue in an economy with low or stagnated wage growth. It is also noticeable—I think the shadow minister is here—in my reading of the government's announcements that the government is also refusing to index the minimum salary for temporary migrants. So, year on year, the value of it erodes, and this will open up the temporary migration scheme to lower and lower paid occupations, which makes this problem of exploitation worse.

The Fair Work Ombudsman is supposed to deal with these issues but it seems practically broken now in its enforcement. Migrants just give up. They probably leave the country by the time Fair Work might even get back to them on their case. Unscrupulous employers know they can just get away with it. There is a clear need to review and overhaul the Fair Work Ombudsman and provide it with proper powers and resources to do its job. We could have a look at that in a proper piece of legislation that is properly trying to deal with the issue of exploitation, not some little sham, fig leaf effort by the government. If the government were serious about protecting workers, they would provide a response to the Senate report about constructive improvements, such as Labor's legislation, which hangs around on the Notice Paper,to amend the Fair Work Act to make it clear that it applies to all employees, irrespective of their migration status, and implement complementary amendments to the Migration Act.

The other issue is penalty rates. The other group of vulnerable workers that the government does not care about but could use this bill to look after is people on penalty rates. We have heard about the impacts on people who are on fast food, hospitality, retail and pharmacy awards from general cuts. They are the lowest paid workers in the country. We are already seeing a flow-on effect to those on enterprise agreements and, more concerning, the potential for the penalty rate decision to set a precedent for other awards in Australia. It is a time to talk about it and at another time the legal advice which has been revealed, showing exactly why there is a risk of this decision flowing on to other awards.

11:03 am

Photo of Stephen JonesStephen Jones (Whitlam, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | | Hansard source

I am delighted to be talking about a serious matter—a matter that has not been discussed enough in this parliament and certainly not in this term—and that is the plight of vulnerable workers in Australian workplaces, in the Australian economy. The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 has a long history. In 2005 the ABC Four Corners crew ran an investigation into the exploitation of workers; 7-Eleven, an iconic business, became famous for all the wrong reasons. We heard allegations on that program of dodgy books, blackmail and the systematic underpayment of workers. The workers affected were vulnerable workers, often young students and foreign workers—people on working visas. We discovered that it was not an oversight but a business model. It was not an oversight by the company; it was a business model. And the only reason that 7-Eleven could continue to operate in that way was that their business model that systematically exploited workers ensured that those workers were underpaid thousands and thousands of dollars. It is bad enough that this occurred in an iconic Australian business, but that this problem is so rampant in the Australian economy deserves much more attention in this parliament.

Over the next 10 minutes I will tell stories of systematic abuse of workers in my own region and across the country. As I go through these stories, you will be asking yourself, 'Why was it that, at the very time ABC Four Corners was broadcasting its program about the exploitation of workers, the government's priority was to spend $46 million on a witch-hunt to go after unions instead of spending that same money investing in enforcement and investigative activities to ensure that the most vulnerable workers in our society were protected from this sort of behaviour?' In that passage of events, you see the priorities of the Turnbull government in a nutshell. They had a choice and they chose to spend $46 million going after unions instead of going after employers who are clearly and systematically doing the wrong thing.

This bill increases penalties for serious contraventions of prescribed workplace laws. It increases penalties for employer record-keeping failures. It focuses its attention on franchises 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 stop them. It expressly prohibits employers from unreasonably requiring their employees to make payments. This is something that was exposed in the Four Corners investigations. Workers were being paid and then required by the employer, the franchisee, to pay that money back to the employer. It was a sham. The bill also gives the Fair Work Ombudsman and employees at the SES level the power to compulsorily question the person as part of an investigation into breaches of the Fair Work Act where a failure to answer questions gives rise to a civil liability.

I want to talk about some stories from my own region. I want to congratulate the Illawarra Mercury and other mastheads within the Fairfax enterprise for a series of investigations that they have been conducting into the systematic exploitation of workers, particularly young workers. The investigation was initiated by a young university student by the name of Ashleigh Mounser. I had the opportunity to speak to her at a May Day function in my electorate last week. She is 22 years of age. After her own exploitation, she started the campaign to find other workers like her in the Illawarra. It resulted in the massive Fairfax investigation finding scores of other workers just like her who had been underpaid—just $10 an hour in one workplace and $15 at another workplace well under the award. There were people like Lucy Vance, a 19-year-old young woman who was paid just $6 an hour at a local restaurant where she should have been paid $17 an hour. There was Rashid Saleem, 22, who worked for free in the promise of a job that would later pay him $16 an hour. Instead he was offered $12 an hour and was let go when he asked questions about the gap. Then there was Kiara Robinson, aged 21. She was not allowed to take time off after being incapacitated after a dental operation to have her wisdom teeth removed. There was Nathan Subanness, 24. In every job he has ever had in the area, he has been underpaid. Hannah Hughes, 23, was paid as little as $12 an hour. She was then bumped up to manager and was significantly underpaid again. Blake Roberts, aged 20, was given an unpaid trial—all too common in some of the restaurants and hospitality businesses around my electorate—and was never called back. The trial shift was actually for a full fortnight. He worked for a fortnight for nothing. There was Lachlan George, aged 21, paid $15 an hour. He should have been on at least $19 an hour. There are scores and scores of examples. This is just the tip of the iceberg.

What is tragic about these examples is that they are not one-offs; they are actually a business model. They are a business model that relies on the exploitation of young and vulnerable workers to give a particular business an edge over another enterprise that is doing the right thing. That is why it is so wrong, because there are two victims of these crimes. There is the worker who is being exploited and there is the business that is trying to do the right thing, but is being run out of town because of these unscrupulous businesses that are breaking the law. You have to ask yourself: why did the coalition government, why did this Prime Minister, spend $45 million going after the people who are trying to protect workers and not a cent investigating these egregious breaches? It is not fair to businesses and it is not fair to the workers.

When we think about vulnerable workers we often think about people in the position of those young workers that I have talked about. Unfortunately, that is not always the case. It is a sad fact that conservatism has a habit of percolating down, from this place, into every business and workplace in the country. An unscrupulous employer will feel encouraged and goaded on to do the wrong thing when the government gives the signal that this is okay by them. I have in mind, literally, hundreds and hundreds of union delegates around the country who, on an unpaid basis, stand there and look after the rights of workers in their workplaces. They sometimes take difficult messages up to an employer, or a manager, on behalf of their workers. And sometimes they have to take a difficult message from the negotiating room back to the workplace, and tell the workers something that they probably do not want to hear but often need to hear. It is a thankless task being a union delegate in this country. Often these are the people who are the first to be targeted when a government such as this gives the green light and says, 'It's not in the law, but it's okay by us.' Every signal that they are getting from this government is: 'It's not in the law, but it's okay by us.'

I reported a couple of days ago to this parliament, and I asked for the parliament's support, about a worker who was in Canberra two days ago, a fellow by the name of Dave McLachlan. Dave went down a coalmine at the age of 16. He has been working in the industry for over 30 years with an unblemished record. He is the sort of worker that politicians love to throw their arms around during an election campaign to get their photo taken with—you know, the hard hat, the high-vis gear and the coal dust on the face. Politicians always love to throw their arm around the shoulder of somebody like Dave, because it is good election shot. Now Dave is asking for their support, because his employer has done the wrong thing. I am here to inform parliament today that, on the evidence, it looks like his employer is systematically doing the wrong thing.

Dave led an imaginative protest in his workplace a little bit over a month ago. His employer had been very tardy in implementing the agreed terms of their enterprise agreement, which included the provision of protective equipment and laundry facilities on site. Anybody who has ever worked in a coalmine knows that you do not come home from work at the end of the day looking like you have just done a shift in the office—rather you are dirty head to toe and smelly. It was a reasonable, and not uncommon, provision within this agreement that laundry facilities be paid for on site. The employer had been very tardy. The union and the workers in the workplace had time and time again given them an opportunity to put this in place.

They decided to put in place an imaginative protest at a meeting before a shift started one day. Without interruption to production, the workers at this site decided to have a very short stop-work meeting. It went for about two or three minutes, I am told. They attended the meeting in their undies to make the point that the employer had done the wrong thing. On the day, nobody mentioned anything about it. In fact, I am told some of the managers on site thought it was a bit of a laugh. Dave was subsequently sacked by the employer on the allegation that he had embarrassed the company and he had done the wrong thing. I think most Australians would look at that protest and think, 'That was pretty funny.' They had been incredibly reasonable and patient with a company who had done the wrong thing. They did not interrupt production to make their point known. In fact, if anyone should have been punished in this circumstance, it was the company or the management for not implementing the agreement—not the union delegate.

Dave, a worker, is asking for the support of the government and the parliament today to ensure that he gets his job back. The Deputy Prime Minister is often heard saying in this place that he is the best friend the coalminers have. Well, Dave, a coalminer, is after a best friend today. He is after the Deputy Prime Minister of this country to pick up the phone to the employer, South32, and say: 'Do the right thing and put this worker back on the job. It's the right thing to do.' If the Deputy Prime Minister really is the best friend that a coalminer has ever had, Dave is a friend in need indeed.

What makes this situation so egregious is that it appears, on the facts of the matter, to be a pattern of behaviour. At this coalmine in the Illawarra, run by South32, Dave is the third union delegate to be sacked in the last two years. That sounds like a pattern of behaviour that is discriminating against somebody because they happen to have the job of being the union delegate in the workplace. I have described Dave as somebody who had an unblemished record in the workplace for over 30 years. I do not know each of his predecessors, but I do know the lodgers involved. I know they are incredibly responsible, they do the right thing by their workforce and they do the right thing by the company. The challenge is on, and this is the question for the employer to answer: is this business going about systematically discriminating against people who were in the position of the union delegate? The facts of the matter look like that is exactly what they have done.

This bill is about protecting vulnerable workers in the workplace. I have talked about young workers who have been systematically exploited, but there is another group of workers who need the backing of the government and the parliament in the workplace today. That is the people, who are volunteers, who take on the thankless job of being the union delegate of the workplace. They do not get paid a cent for it. It is one of the toughest jobs in the workplace. They get grief day in and day out for doing it. They deserve a hell of a lot better than being sacked by unscrupulous employers who do not respect the law and do not respect their position.

11:18 am

Photo of Gai BrodtmannGai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | | Hansard source

I commend the member for Whitlam on that speech highlighting the exploitation that has been happening to workers in his electorate. There are scores and scores of examples of people being underpaid and exploited. Who would have thought that we would still be telling these tales in 2017? We are still hearing stories right across the nation of workers being exploited by unscrupulous employers. What has the government been doing about it? Very, very little.

Before I start on my discussion of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, I want to remind Canberrans and those across Australia that on 2 July this year more than 13,000 Canberrans will face a pay cut as a result of the government's changes to penalty rates. There are 13,000 Canberrans facing pay cuts. They are relying on that money, they are paying their mortgages with that money, they are paying their rent with that money, they are paying their car loans with that money, they are putting food on the table with that money and they are paying for their children's school shoes and school books with that money. More than 13,000 Canberrans, as of 2 July, will face a pay cut thanks to this government.

I am pleased to have the opportunity to speak on this bill, because Labor has fairness and workers' rights at the core of its mission. That is the Labor way. That is part of our social fabric. That is part of Labor's DNA. This bill goes some way to dealing with some of the exploitation issues that the member for Whitlam mentioned that are occurring right across the country. They are not just in his electorate; they are right across the country. They just highlight the fact that there still needs to be a lot more work done on eliminating exploitation of workers in Australia.

We are talking about 2017. The fact that these stories still exist is absolutely outrageous, particularly given the fights that have been fought by Labor for more than 100 years to get decent wages, to get decent conditions, to get an eight-hour day. Labor and the labour movement fought to get an eight-hour working day. Fights have been fought to get decent work and pay conditions for the workers throughout Australia by successive Labor governments and by the labour movement. The fact that we are having this debate on this bill and the fact that exploitation is still happening in this country are just an outrage. We as a nation should hang our heads in shame about the fact that our fellow country men and women are being exploited. That is the only word you can use when people are being asked to pay their wage back, as we heard from the member for Whitlam.

I have heard, just when going around and speaking in my electorate, about the impact of the penalty rate cuts on the community. I have been talking to people in the electorate, and they have told me not just that they are concerned about the cut in the penalty rates but also that we have people in Canberra who are being paid in cash, below the award rate, of course—being paid in cash. This seems to be a common phenomenon right across Canberra, and I am sure it is not confined to Canberra, Deputy Speaker. I am sure it is happening in your electorate. I am sure it is happening in every electorate right across the country: under-award wages being paid in cash. This seems to be a significant issue too, and I wonder what the government is going to do about that.

In the time I have, I will address a small portion of the problems as I see them—the problems and the holes—in this bill, because there are many of them, but we do not have time to cover them all. The bill does not include protections for workers against sham contracts. It does not include protections against phoenixing to avoid wage liabilities. It does not do anything to make it easier for workers to recover unclaimed wages from responsible companies, and that is a significant issue. I know that one of my constituents spoke to me about this. He ended up resigning from the company because it was all just getting too hard. He was in a daily battle, a hand-to-hand combat each day, with his employer to try to get his pay rectified, to be paid properly and to be paid back. It was just completely ignored, so he ended up resigning. What choice did he have? Also there is the question of penalty rates, which I raised at the beginning of my speech.

For years Labor has campaigned strongly to protect workers against exploitation. As I said, it goes right back to the beginning of the Labor Party. The labour movement has been working with us all these years, more than 100 years, fighting the good fight for workers, for decent wages, for decent conditions, for decent work and for safe work. As I have said many times, workers' rights did not fall from the sky. Workers' rights, the conditions, the pay and the work that we enjoy today and the safe work environments that we enjoy today are all thanks to hard-fought fights by thousands and thousands and thousands of men and women over more than 100 years. These rights did not fall from the sky. Each gain has been made through a hard-fought fight, and there are still plenty more fights that we need to undertake. The member for Whitlam highlighted the many fights that we still need to undertake as a result of the exploitation of Australian workers that is happening each and every day right throughout the country.

In 2016, Labor introduced its Rights at Work campaign, which committed to a suite of reforms to protect workers by cracking down on unscrupulous employers who exploit their staff. This bill is the government's comparative policy, but the title is where any similarity ends. The rights of vulnerable workers are not always anywhere near close to the top of the agenda for the Turnbull government in this bill. When I think about vulnerable workers and those who are really doing it tough, I think about the cleaners in this building.

I come from a working class matriarchy: three generations of cleaners. My great-grandmother was a domestic in the Western District. She cleaned the houses of the very wealthy in the Western District. Not only did she clean houses but she also did their washing, Mr Deputy Speaker. You can imagine what the washing was like in those days: it was the copper, it was boiling water. It was the stinking hot summer in the Western District, pushing all that linen down into that stinking hot water, then wringing it through, putting it on the line, pulling it off the line and then ironing it within an inch of its life and with a ton of starch. That was my great-grandmother's life. At the same time she was not only toiling in that fashion but also bringing up 13 children on her own.

Then there was my grandmother, who was also a cleaner. My grandmother left school at the age of 11 or 12 and with very limited opportunities. She cleaned three places in Melbourne: a hospital, a theatre and also a factory. Basically, she would work around the clock. She had very little time off because basically she had to put food on the table. She was a single mother, again, bringing up seven children on her own in a housing commission house in Preston.

Unfortunately, I did not meet my grandmother. She died when I was six months old, of an undiagnosed heart condition. In the fifties and sixties we did not have universal health care. Decent health care was reserved for the wealthy and she was certainly not a wealthy woman. So she had an undiagnosed heart condition and died at the very young age of 54 and had had a very hard life before that: three cleaning jobs, working around the clock to keep food on the table for her seven children.

And then there is my mother. My dad walked out on us when I was 11 and he left us with $30 in the bank—'us' being my two sisters, me and my mum. We did it very tough in my teens. In the latter part of her life, my mum went back to cleaning. She cleaned houses until she retired, again, to make ends meet and to put food on the table.

So, as I said, I have some experience in cleaning, and it is a tough job. It is a physically tough job and it does take its toll on the body. I was a cleaner when I was going to university. I cleaned the houses of the very wealthy around Canberra, in Forrest. That is what put me through university. But that was nothing like my great-grandmother had to do, toiling every day on that linen in the copper, and it was nothing like my grandmother, who did three cleaning jobs, had to do. Imagine: a factory, a theatre and a hospital!

So I really felt for those cleaners who were so shabbily treated by this government. These are the people who clean the offices of the Prime Minister and of the ministers—of all of us here who serve the people of Australia. They were treated so shabbily by this government. I met some of the women, who came in to have a chat about what the wage cuts actually meant. They were going to have a huge hit on their lives. With the cost of living going up, their wage inequality meant that every week they were having to make critical choices and decisions about how they were going to make ends meet: 'Okay, this week do I have a meal every night?' Being the daughter of a single mother I know that my mum, particularly when dad first left us with so little money in the bank, would often—every second night—go without a meal so that my sisters and I could actually have a meal. On the other nights we ate out at friends' and family's. These are the decisions in the last five years that the cleaners in this building, in this seat of democracy in the nation's capital, are still making every day as a result of the government's outrageous cuts to their pay.

I just find it absolutely gobsmacking that the government could not care about the cleaners that actually look after them and make the environment here at Parliament House a pleasant one. It just goes to show this government is completely out of touch with what the reality is for most Australians, particularly those vulnerable workers, particularly those who are doing it tough.

My colleague the member for Whitlam highlighted a number of cases that underscore the exploitation that is still taking place in Australia. We have seen many high-profile cases. We have seen media reports on it. The Illawarra Mercury did a feature. It sounds like it was an excellent feature. I do commend the Mercury for doing that piece. We have got so many examples. We have 7-Eleven stores, which were operating a business model based on methodical and systematic exploitation of vulnerable foreign workers. This model included appalling undercutting of wages and doctoring of records designed to conceal unlawful conduct. Can you believe that? They were doctoring the pay records in a deliberate, methodical, systematic attempt to exploit workers. How these people sleep at night is anyone's guess. It is absolutely appalling. And these were foreign workers. Not only were these vulnerable foreign workers methodically and systematically exploited but they were also threatened with deportation and physically intimidated if they spoke out. Can you imagine what their lives were like? Can you imagine the fear that they lived in? Not only were they trying to live on the appalling wages, trying to make ends meet in a foreign country, but they were also being intimidated and bullied by these employers. It is just appalling. Shame on those employers and shame on the government that allows these sorts of things to happen.

We have heard about 7-Eleven. We have heard about ACT school cleaners, the majority of whom were refugees from Thailand and Burma who were grossly underpaid and forced to sign contracts they did not understand. The reports are endless. There are scores and scores of stories about foreign workers being exploited, about women being exploited, about young people being exploited. This is absolutely appalling. It is a national shame that this is happening in Australia in 2017. This bill goes some way towards addressing some of these real issues but there is still plenty that needs to be addressed. We have to maintain attention on this issue. We have to maintain the rage on this issue because it is unacceptable that workers are being exploited in Australia in 2017.

11:33 am

Photo of Matt ThistlethwaiteMatt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | | Hansard source

I support the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, which contains some elements aimed at protecting vulnerable workers but in reality does not go anywhere near far enough to truly make a difference to those workers who have been systematically targeted by big businesses to save a buck, in particular in wages expenses, by underpaying them, by forcing them to pay back money after they have been paid, by doctoring employment records and by committing what in reality should be crimes in this country regarding the underpayment of workers.

I suspect that the government's heart is not really in this particular type of legislation. It is the antithesis of what they believe in. They believe in free markets and in employers being able to employ people at will and do whatever they like in terms of the amount of money that they pay them. It is all because of some horrific cases of exploitation and underpayment of workers and manipulation of the nation's immigration and visa system that the government have been dragged kicking and screaming to the parliament, albeit at a delayed rate, to make these reforms. We have seen the horror of businesses such as 7-Eleven and Domino's being caught out actively disadvantaging their workers. 7-Eleven not only systematically underpaid migrant workers, failing to pay their employees at a lawful rate, but also coerced them into paying back money—actively forcing people to go to the ATM, withdraw money and pay it back to them—in cash once they had been paid those wages. Some of them were even underpaid those wages.

A strong, unending desire to help these workers and ensure that their exploitation does not happen again is encoded in Labor's philosophy but also in the policies that we released in the lead-up to the last election. That is why we support this bill. But we also say that it simply does not go far enough. I will go through some of the elements of the bill. I will point out their deficiencies, and I will also outline what Labor would do to make issues such as this end in Australia and also ensure that we have effective laws that protect workers from exploitation.

This Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 does amend the Fair Work Act by introducing a higher scale of penalties for serious contraventions of prescribed workplace laws. It does increase penalties for failure to keep proper records. It makes franchisors and holding companies responsible for underpayments of their franchisees. It expressly prohibits employers from unreasonably requiring their employees to pay a portion of their wages back in cash. It strengthens the evidence-gathering powers of the Fair Work Ombudsman to ensure that the exploitation of vulnerable workers can be effectively investigated.

Unfortunately, this bill, the scandal that has preceded it and the significant period of inactivity from the government on these important issues are symptomatic of its disregard for vulnerable workers and citizens, who have continued to be ripped off by corporate interests and the big end of town. The previous speaker, the member for Canberra, rightly pointed out that these sorts of things should not happen in modern-day Australia. With effective computer systems, pay systems, the availability of awards online and an enterprise bargaining system, these sorts of scandals and rip-offs should no longer occur in Australia. Where they do, and where there is active knowledge by directors of companies, they should be crimes. There should be serious ramifications for those who are involved in, or know about, the commission of these crimes. Unfortunately, we do not have that level of commitment from this government to tackling these issues and to making them crimes in Australia to ensure that there is effective deterrence for people who are seeking to undertake these sorts of crimes—in my view—against workers in Australia.

This bill falls significantly short of what Labor would do in terms of a suite of policies and legislative reforms to tackle these issues. We announced these reforms some 12 months ago, well before this Turnbull government even turned its mind to protecting workers, so caught up has it been in the ideological crusade against workers and their unions. We have seen that through the royal commission that the government instituted and through endless calls for the reduction of penalty rates and cutbacks in Fair Work protection by those opposite, who fundamentally do not believe in regulation to protect workers and would like to see a freer market for labour in this country.

The measures in this bill simply do not address the breadth of worker exploitation that we have seen run rampant under this Liberal government. The bill does nothing in relation to a range of policies which Labor took to the last election and which are directed towards things like combating sham contracting. Sham contractors are people that set up arrangements to avoid paying proper penalty rates and proper rates of pay when they contract to a major company to do work.

Labor has a policy on the licensing labour hire companies. We have seen many cases of labour hire companies ripping off workers and seeking to undermine award wages and conditions. I was recently in Gladstone with Senator Chisholm conducting a jobs forum in that town, which, of course, has faced a downturn in the wake of the construction phase of the LNG plants at Curtis Island ending and the plants moving into a production phase. There has been a massive downturn in work there. We talked to workers. We went to the local bowling club and we had a great forum talking to local workers about issues. One of the major issues that is coming up is the use of labour hire by local firms in the area that are seeking to drive down costs by reducing wages and penalty rates for workers and, unfortunately, seeking to skimp on occupational health and safety protections. By licensing these labour hire companies and by holding them to a set of regulations which ensure fair treatment of workers, we can keep an eye on these things. That is not part of this bill, but it should be.

Labor also has a policy on shutting down the practices of companies phoenixing to avoid wage liabilities. This really gets up my nose and it happens a lot in the construction industry. A company might build a particular job, underpay their workers and then move on. They move on, and when the group of workers seeks to be back paid or seeks to launch legal action against the company that has underpaid them, what do you know? The company is sent into liquidation and it is wound up. The operators of this company a few months later then set up a new company. Because you cannot pierce the corporate veil under Australian corporate law they just move on and they get away with essentially what is a crime in this country of underpaying a group of workers. They are knowingly avoiding paying the right rates of pay and then moving on because they can use Australia's corporate laws to do that. Labor will not allow that to happen if we are elected. We will introduce practices that crack down on phoenixing to avoid wage liabilities.

We will also reform the Fair Work Act to strengthen protections for workers. We will 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 whilst making it easier for workers to recover unpaid wages from employers and directors of responsible companies.

The other serious shortfall of the government's bill which really highlights their approach to workers across the nation is their refusal to protect penalty rates for vulnerable workers. Labor, of course, is fighting the Fair Work Commission's recent decision on penalty rates which undercuts the accepted penalty rates that have held in this country for many years. We have had close to a century of paying people fairly for working on weekends. The cuts to penalty rates will see up to 700,000 Australians lose up to $77 a week. Without the Prime Minister coming to his senses and supporting Labor in reversing these cuts, the wages of some of the lowest-paid workers will be hit. This failure goes directly to the government's wrong priorities.

In previous careers I have represented low-paid workers in disputes before industrial tribunals. I have represented low-paid workers in annual wage cases before the New South Wales Industrial Relations Commission. There are characteristics that develop of low-paid workers—unfortunately, typically they are women. They tend to be working casual or part-time occupations and are looking for more hours each week. They are underemployed, generally. They struggle from week to week. If the car breaks down they struggle to find the money to fix it. They very rarely have holidays. They are very rarely able to afford a night out. An $80-a-week hit to their income is a big impost on their quality of life and their ability to participate in our community. That is why Labor is opposed to this penalty rate cut. That is why it is outrageous that we have got deafening silence from the Turnbull government, with Prime Minister Turnbull actively opposed to supporting Labor's plan to ensure that the take-home pay of these workers is not cut by this decision.

Labor will continue to support the Fair Work Amendment (Protecting Take Home Pay) Bill 2017 and push it through this House of Representatives. It would stop those cuts to penalty rates because we believe in a fair day's work for a fair day's pay.

A few additional issues Labor has with this bill include provisions which give the Fair Work Ombudsman the power to compel people to answer questions and do not contain procedural protections which might have been expected to have been included in such a regime. It is no small thing to give a government agency the power to compel citizens to answer questions, removing the right to silence, and we must be vigilant to ensure that these powers are proportionate and appropriate safeguards to the exercises that are in place.

The bill makes franchisors and holding companies responsible for underpayments by their franchisees or subsidiaries where they knew or would reasonably have known the contraventions and failed to take responsible steps to prevent them. Labor's position on this issue at the last election was that the onus of proof should in fact be reversed so that accessories to contraventions of workplace laws such as franchisors are required to establish that they did not know or could not reasonably have known about the contravention. There is a subtle difference between what is proposed here and Labor's planned approach to this, which is a much stronger provision and lays the responsibility with those who are accused of these contraventions. It is up to them to demonstrate that they did not know what was going on or that they should not reasonably have known. Again, it is representative of this government's lax approach when it comes to putting in place proper regulation to protect workers.

They are skimping on this bill. There is the failure to protect penalty rates for Australian workers. These demonstrate that, as I said earlier, when it comes to protecting workers, this government's heart really is not in it and it is only because of the horror and outrage in the community regarding what has happened at 7-Eleven, Domino's and other big employers in this country that the government has been dragged kicking and screaming into this parliament to make this reform. This bill is a step in the right direction, but it does not go nearly far enough. If the government were serious, they would take a good look at Labor's plans on this issue and implement them.

11:47 am

Photo of Tony ZappiaTony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | | Hansard source

I commend the member for Kingsford Smith for his comments and certainly agree with him that the government's heart is not truly in this bill. In speaking on this legislation, I support the amendments moved by the member for Gorton. The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 not only is long overdue but, as other speakers have said, falls well short of what it should be enacting. In fact, this legislation is like the Turnbull government's recent announcement to abolish 457 visas and replace them with temporary skill shortage visas: it sounded tough at the time, but on close scrutiny it was nothing more than a public relations stunt, more spin than substance. As it turns out, from that announcement only nine per cent of the current visa holders would be excluded under the new arrangements. That is equally the case with this legislation; it is more bark than bite.

Other Labor members who have spoken on this legislation have outlined many of the cases where worker exploitation has occurred, and I do not want to repeat those cases or other examples. They have also talked about the shortfalls of this legislation, and again I do not want to go into the detail of that but may do so at the end if time permits. I want to talk about the issue of vulnerable workers in this country. Vulnerable workers are people who because of their circumstances have no choice but to take on jobs that have no security, poor work conditions and low pay. They are mainly young people, migrants and women. Particularly vulnerable are new arrivals, working holiday-makers, overseas students and temporary work visa holders. Workers who have come from overseas are especially vulnerable, and I want to go to the heart of that point.

In an article posted on 21 April, Tim Colebatch points out that between 2008 and 2016 in net terms the Australian labour market expanded by 474,000 full-time jobs. Of those, only 74,000 went to people born in Australia—that is, roughly three-quarters of the growth in full-time jobs since the global financial crisis have gone to recently arrived migrants, mainly from India and its near neighbours. With respect to the exploitation of migrant workers, new arrivals and students, the perpetrators, sadly, are often people of the same background who bring their country-of-origin work practices here to Australia. Work conditions in overseas countries that years ago were being condemned by Australians are now being exposed right here in our own backyard. The only reason this legislation is before the House is that the level of vulnerable worker exploitation has now reached a crisis point and it is being exposed almost on a daily basis throughout the country. The government had to act.

How and why did Australia, an advanced country that has often led the world in workers' rights, get to this situation? The underlying cause can be attributed to this government and previous conservative governments over the years attacking trade unions and weakening their ability to protect Australian workers. Those attacks culminated in the Howard government's failed Work Choices legislation. Work Choices might have failed but the ideology that drove it is alive and well within government ranks.

Other tactics have been used with the support of this government to exploit workers and deprive them of their rights and of a fair go. The most glaring is the use of so-called self-employed subcontractors. Courier drivers are clear examples, although the practice has now become widespread across many other sectors. Because they are subcontractors they are considered self-employed. They are not paid overtime, they do not have a minimum hourly rate, they do not get holiday or long-service pay, they do not get sick pay or superannuation and they often work very long hours for very low rates of pay. Making people self-employed subcontractors is a legal way of depriving people of their working rights. It implements all of the objectives of Work Choices in one simple move, and that includes shutting out the unions.

What are the workers' options? In most cases there are none when the current job situation is analysed. Currently there are around 750,000 Australians who are unemployed and there are 1.1 million Australians who are underemployed. As of 30 June last year, there were 137,000 working holiday-makers in Australia, 95,000 457 visa holders, 554,000 overseas students—and that figure could even actually be 100,000 higher—30,000 asylum seekers and 4½ thousand seasonal workers. In total there were around 2.1 million people looking for jobs in Australia, not including other holiday-makers or illegal migrants who are also competing for the same scarce jobs. Not only are these people often desperate to get work and willing to work for less than standard labour conditions but also, in turn, they put pressure on people who have jobs to accept very unfair conditions. It is not uncommon for people to work unpaid overtime or work through their meal breaks or at lower rates of pay than they should be paid. The demonising of and attacks on unions in recent years have had a direct correlation with the level of worker exploitation that is being exposed. Successive conservative governments have made it increasingly difficult for unions to ensure that that exploitation does not continue.

Of course, there are other good reasons that it is in the government's own interest to bring in this legislation. The government's budget is in a mess. We heard only a couple of days ago that the deficit for this year will hit $37.6 billion. Gross debt for this budget, as we heard from the Treasurer only yesterday, will hit $649 billion and is going to rise even higher, to some $725 billion, at the end of the decade, in about 2027-28, from memory. The government needs to raise more money, but when workers are underpaid, or are paid cash so as not to report their low payments, the government collects less tax. So it is not in the government's interest to allow worker exploitation to continue at the levels that have been exposed, particularly, as I suspect, as the cases exposed to date represent a minuscule amount of what is really going on with respect to overseas workers.

Most vulnerable workers are shiftworkers and those on the minimum wage. They work shifts or for the lowest wage because they cannot get any other work. If they could, they would. They have no choice for a whole multitude of reasons, but they need a job. They need to pay their bills just like everyone else does and they need to provide food and shelter for themselves and their families. Where was the government when those same workers needed it earlier this year? It was nowhere to be seen. It turned its back on those very vulnerable workers with respect to the penalty rates decision. It did not support Labor's move to protect them. Indeed, it walked away from the workers as quickly as it could, putting the responsibility wholly back on the Fair Work Commission. Where was the government with respect to defending vulnerable workers in the minimum wage case? Again, it was nowhere to be seen. The two categories of workers who are the most vulnerable in this country, when they needed the government's help and needed the government to stand up for them, had the government turn its back on them.

I have spoken in this place previously about the effect of penalty rates. It is a matter that affects so many people around the country today, as other members on this side of the House have spoken about. I will not repeat the speech I gave here only a few weeks ago. What I do know is that even with their penalty rates these are some of the lowest income earners in Australia. These are the very vulnerable people that this legislation seeks to protect, yet when we had an opportunity to ensure through the Fair Work Commission that they did not lose any income as a result of that decision, the government failed to protect them. Yet the government has brought this legislation in, on the pretence that it cares about vulnerable workers.

I turn now to why this legislation falls well short of what it should be doing. Indeed, I suspect it has been drafted deliberately as an attempt that purports to protect vulnerable workers, when it does not. The explanatory memorandum to this bill highlights five dot points with respect to what this legislation seeks to achieve. I will read through them. The first is:

Introducing a higher scale of penalties for 'serious contraventions' of prescribed workplace laws.

I highlight the words 'serious contraventions'. That is a very subjective phrase. It is one that will be open to abuse, and which I am sure that those employers who wish to abuse the system will hide behind when it comes to being penalised or not. The second dot point is:

Increasing penalties for record-keeping failures.

Again, that is pretty wishy-washy at best. The third dot point is:

Making franchisors and holding companies responsible for underpayments by their franchisees or subsidiaries where they knew or ought reasonably to have known of the contraventions …

The words 'where they knew or ought reasonably to have known of the contraventions' give them plenty of latitude for protection against being penalised when they do take advantage of their workers. The fourth dot point is:

Expressly prohibiting employers from unreasonably requiring their employees to make payments …

The word 'unreasonably' could mean anything to whoever wants to interpret it and, again, it will be used by unscrupulous employers to hide behind in order that they do not get penalised under this legislation.

The last dot point talks about 'strengthening the evidence-gathering powers of the Fair Work Ombudsman'. The Fair Work Ombudsman already has plenty of powers. I am not sure what else it needs in order to get to the bottom of some of the exploitation that is taking place. Even then, if you strengthen its powers, what good is that when this legislation provides no additional resources to the Fair Work Ombudsman whatsoever? I cannot see any in the explanatory memorandum. There is no cost attached to this legislation, which implies that there will be no additional resources provided. It seems to me that the first thing that ought to be done if the Fair Work Ombudsman is to be more effective is to ensure that he or she is better resourced—but, again, that is not the case with this legislation.

On the subject of phoenixing, I have had people come to my office on many occasions to raise it with me, and other speakers from this side of the House have talked about it. In instances of phoenixing, vulnerable workers lose out not just by getting paid poorly but, at times, by not getting paid at all as a result of practices of unscrupulous employers.

This was an opportunity for the government, with all of the evidence that is now being provided to it with respect to vulnerable workers being exploited, to do something constructive, truly stand up for those vulnerable workers and bring in legislation that would protect them. But, as we know, the very people who are exploiting these workers are often the people this government seeks to protect in other ways, so they are quite often the people that the government does not particularly want to target. I suspect that this legislation is nothing more than a veneer by a government that wants to be seen to be doing something in order to appease the public outcry that is out there but in its heart, as other speakers on this side of the House have said, is not truly behind what it is purporting to do with the legislation. The amendment moved by the member for Gorton at least tries to do something to fix that. I support it. Yes, this legislation is better than nothing—nobody would deny that—but being better than nothing does not make it as good as it could have been.

12:02 pm

Photo of Christian PorterChristian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | | Hansard source

I thank members opposite for their contributions. I understand that, by agreement, I now have an opportunity to make a few closing remarks representing the minister on behalf of the government. The government is pleased to be delivering on its election commitment to protect vulnerable workers. While we recognise that the vast majority of employers in Australia do the right thing by their workers, the bill will more effectively deter those employers who do underpay workers and impose significant penalties for deliberate and systemic breaches and the underpayment of workers. There are too many cases of widespread exploitation of vulnerable workers in Australia. They have shown the extent of a problem within some businesses, and this cannot continue.

The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 includes higher penalties to deter would-be wrongdoers. Stronger powers for the Fair Work Ombudsman mean the workplace regulator will be more effective in uncovering and investigating exploitation, with powers similar to those held by corporate regulators such as ASIC and the ACCC. The bill also provides that a person who gives the Fair Work Ombudsman false or misleading information will be penalised. The bill includes new responsibilities for franchisors and holding companies with significant influence or control over companies in their network who knew or should reasonably have known of breaches of workplace laws in their network and failed to take reasonable steps to prevent them. These businesses will no longer be able to be complicit or turn a blind eye to exploitation of workers in their business networks with any impunity. It was clear from the events at 7-Eleven and elsewhere that the community expected the government to take action to strengthen workplace protections for vulnerable workers. We presented a comprehensive policy for the protection of workers to the Australian people prior to the 2016 election, and this bill implements our commitments to strengthen workplace laws.

I thank the Senate Education and Employment Legislation Committee for its inquiry into this bill and all those individuals and organisations who contributed by preparing written submissions and giving evidence at the public hearings. I recognise the committee's longstanding interest in protecting vulnerable workers in Australia. The government is pleased that the committee has recommended that the bill be passed. There are areas of the bill, such as the proposed new responsibilities for franchisors and holding companies, where a range of views were expressed about the proposed scope and application of the provisions.

The committee has recommended the government consider a clarifying amendment to ensure the provisions operate as intended. The government will consider this recommendation carefully. The committee also recommended that, as part of the Migrant Workers' Taskforce, the government consider whether any further reforms are necessary to address issues of exploitation and liability in the context of labour hire. I am pleased to inform the House that it is clearly stated in the terms of reference that the taskforce is examining labour hire practices for companies that employ migrant workers, with consideration of particular industries or groups of vulnerable workers where there are systemic problems with exploitation and underpayment. The taskforce will continue to consult broadly with key stakeholders to better understand the issues and develop solutions. The government will be considering the views of the taskforce carefully in determining whether changes in this particular form of work are needed to address the broader issue of worker exploitation.

The committee also wants to encourage the Fair Work Ombudsman to take an appropriately targeted and measured approach to oversighting the measures within the bill once passed. The government supports this recommendation and is confident the proposed statutory safeguards set appropriate parameters for the use of the ombudsman's powers. The government also notes the Fair Work Ombudsman will play a critical role in educating business and employees about the new requirements and helping them to comply or seek assistance.

The committee's report shows that the government got the balance right with its election policy. These changes represent a balanced and proportionate response to worker exploitation. It is the reason the Australian people supported our policy at the last election and the reason that these laws should now be passed. I commend the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 to the House.

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Gorton has moved as an amendment that all words after 'that' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.