New Laws to Protect Against Illegal Exploitation of Workers

The Victorian government is set to introduce new laws to crack down on the exploitation of workers – especially those on working holiday visas – by labour hire syndicates and businesses such as farms who hire from them.

As part of the reforms, a new watchdog will be given the power to raid workplaces and launch criminal prosecutions.

Illegal exploitation

Those who are in Australia on working holiday visas are easily exploited by labour hire businesses and local employers who prey on their desire to remain in the country.

The “88-day farm work program” is a prerequisite for many visa holders who wish to remain in Australia. After consulting with over 4,000 working holiday visa holders, the Fair Work Ombudsman found the program resulted in:

• Unreasonable and unlawful requirements being placed on visa holders by unscrupulous businesses,
• An environment which enabled exploitative work practises,
• Almost a third of workers not receiving payment for some or all work,
• A third of workers reporting a poor or fair experience, and
• A third of workers claiming they were paid less than the minimum wage.

In announcing the new reforms, Premier Daniel Andrews stated:

“For far too long, dodgy operators in the labour hire sector have underpaid workers, exploited workers, using some of the worst practices to enhance their profits, but in essence peddle misery”.

Government inaction

Calling on the federal government to follow the state’s lead, Victorian Industrial Relations Minister Natalie Hutchins stated:

“We have a preference for a national system of labour hire regulation, but unfortunately the federal government just hasn’t stepped up in this situation and taken this issue seriously.”

South Australian Attorney-General, John Rau, has also criticised the federal government, saying he has been raising the issue with Canberra for some time to no avail. In the absence of a nationally coordinated approach on the issue, Mr Rau believes the only way forward is for states and territories to take matters into their own hands.

Industry group takes the lead

Growcom is the peak lobby group for Queensland’s horticulture industry. The organisation has created the Fair Farms initiative, which certifies farmers who meet their workplace requirements.

Spokesperson for the group, Rachael Mackenzie, says the industry can no longer wait for government action and needs to take action to prevent unlawful exploitation of workers.

“At the moment we have a situation where in our supply chain there’s no differentiation between those who do the right thing by their workers and those who don’t,” she remarked.

Regulatory changes in Victoria

The Victorian regime will require labour hire businesses to demonstrate compliance with labour and migration laws before being licensed to provide labour to farms and other businesses. A new public register will be created of all licence holders.

Employers will only be permitted to use businesses that are on the public register, and those who engage unlicensed businesses will face hefty fines.

Significantly, labour hire business who breach employment or immigration laws will face having their licences revoked, as well as fines and potential criminal charges.

“This scheme will bring some much needed transparency to the labour hire industry. Businesses will need to show they treat their workers fairly and become licensed or face hefty penalties,” Ms Hutchins said in a statement.

She pointed to investigations which suggest that several labour hire businesses are controlled by organised criminal groups, who flout immigration and workplace laws to unlawfully exploit workers.

Reaction

Victoria’s opposition Leader Matthew Guy has not explicitly supported the new regime, preferring to highlight the fact that other areas of workplace law are in need of reform.

By contrast, Victorian National Union of Workers secretary, Gary Maas, applauded the new laws, calling them a step in the right direction.

“We hear daily reports of the exploitation of workers who are not employed directly at the sites they work on,” he stated. “We know that this exploitation won’t cease until this legislation is passed.”

Scheme must be supported by sufficient resources

Professor Anthony Forsyth of RMIT University’s Graduate School of Business and Law conducted an inquiry into Victorian labour hire syndicates last year.

His report outlined systemic exploitation of workers at the hands of labour hire syndicates, farmers and other local employers. The professor cautioned that the new regime would only be effective if adequately resourced and prepared to prosecute offenders.

He also warned the reforms – which will be tougher than new labour hire regulatory regimes planned for South Australia and Queensland- may drive syndicates to states with little or no regulatory oversight.

This is where NSW comes in – a state where regulations are weaker than those planned for Victoria, South Australia and Queensland – and where there are no current plans to improve the situation.