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

Mr PITT (Hinkler—Assistant Minister for Trade, Tourism and Investment) (11:16): After some delay, it is my great pleasure to be here speaking today in support of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. This is a matter that I have been extremely vocal about for some time. It is an issue which has been around a lot longer than I have, with the Hon. Phillip Ruddock raising it back in 1999. It has been the subject of numerous inquiries, numerous Senate reports and various other activities within government. I have campaigned long and hard against worker exploitation since I was elected to this place in 2013, and this legislation will ensure that workers in Australia are better protected.

In 2014, at the federal council, the Nationals voted unanimously to seek a multi-jurisdictional task force to address worker exploitation. The exploitation of foreign workers is something which largely impacts regional farming areas like my electorate of Hinkler, but in reality it can happen anywhere—and, sadly, I am sure my office is not alone in receiving reports of allegations and complaints of worker exploitation. In May 2015, Taskforce Cadena was established by the coalition government to investigate illegal practices in temporary visa programs and to target unscrupulous labour hire contracting firms. Led by the Department of Immigration and Border Protection and the Fair Work Ombudsman, it works with the Australian Federal Police, the Australian Securities and Investments Commission, the Australian Taxation Office and various state and territory agencies to ensure that incidents involving exploitation and visa fraud are appropriately investigated. The reason for Taskforce Cadena is that we needed better coordination and intelligence sharing between agencies at the various levels of government to ensure seasonal workers are protected from these unscrupulous employers. As at 12 January 2017, Taskforce Cadena had received 267 allegations for investigation and completed 13 operations, uncovering evidence of serious wrongdoing, including illicit drug, illicit firearms and proceeds-of-crime offences.

The legislation being debated today delivers another tool to increase safeguards for vulnerable workers, whether they are migrant workers here on a working holiday visa or a local teen working in a franchise. This is about human decency. Regardless of the nationality of the worker, they all have the same rights and obligations while they are working here in Australia. Yet, in the 2015-16 financial year, 38 of the Fair Work Ombudsman’s 50 litigations—some 76 per cent—involved a visa holder. Sixteen of those litigations involved a 417 visa holder. In 2015-16 the Fair Work Ombudsman recovered just over $3 million for all visa holders, with $1.37 million of this for 417 visa holders. Importantly, this legislation is another coalition government election commitment being delivered.

The government has provided $20 million in funding to the Fair Work Ombudsman and established the Migrant Workers’ Taskforce. The Migrant Workers’ Taskforce, led by Professor Allan Fels AO, will provide expert advice on measures that will deliver better protections for overseas workers. The exploitation of migrant workers affects a range of industries, and in recent cases it has become clear that some employers have blatantly ignored their responsibilities under Australian law.

In February Professor Fels provided an update on the four areas of action the task force has set for itself: better communication with visa holders, stronger measures to prevent and redress workplace exploitation, more effective enforcement and ensuring that policy frameworks and regulatory settings are right. The task force has endorsed a proposal by the Fair Work Ombudsman to host a new, anonymous-reporting-online tool designed specifically for migrant workers. This new tool will allow migrant workers to provide information or share concerns about a workplace without identifying themselves if they do not want to make a formal request for assistance from the Fair Work Ombudsman. The task force is also considering the matter of visa arrangements for exploited migrant workers and is in discussions with the Department of Immigration and Border Protection on how this will be handled.

Professor Fels also stated in his public statement:

I look forward to this very important legislation as I consider it is critical to addressing the highly exploitative culture and practice of some employers.

I agree with him wholeheartedly, as I am sure you do, Deputy Speaker Kelly. This legislation sends a clear message to employers: if you are doing the wrong thing, you will be caught. It will not be tolerated, and you will be punished to the fullest extent of the law.

There are concerns that civil penalties under the Fair Work Act are currently too low to effectively deter unscrupulous employers who exploit vulnerable workers because the costs associated with being caught are seen as an acceptable cost of doing business. This bill will introduce a higher scale of penalties for serious contraventions of payment related workplace laws so the threat of being fined acts as an effective deterrent to potential wrongdoers. The higher penalties—and these are 10 times higher than previously—will apply where a contravention was deliberate and formed part of a systematic pattern of conduct.

The Fair Work Ombudsman issued 347 on-the-spot fines between 1 July and 31 December 2016. They range from $540 to $2,700 to employers for contraventions of recordkeeping and payslip laws. In February the Fair Work Ombudsman announced that it had initiated proceedings against a Queensland labour-hire firm over claims that its failure to keep records of employees’ hours prevented the agency from determining whether 265 migrant workers had received their full entitlements. The labour-hire firm supplied employees to pick and pack strawberries at a Stanthorpe farm, and the Fair Work Ombudsman alleges that a lack of basic records of hours of work prevented its inspectors from checking whether almost all employees were being paid their minimum entitlements. Underpayment of entitlements could be calculated for just six of those 265 employees identified, with inspectors determining the workers had been underpaid a total of $316.

Under the legislation, penalties will also increase for recordkeeping failures. Contraventions relating to employee records and payslips double for both individuals and bodies corporate, companies et cetera, and the maximum penalty also extends to false or misleading employee records or payslips which the employer knows to be false or misleading. Employee records and payslips play an important role in determining compliance under the Fair Work Act. Without reliable employee records, employees may be unable to prove their case and recover their minimum entitlements. If underpayments cannot be proved, employers may end up with a significant windfall even if fined for the contraventions.

This increase in penalties is not designed to target those employers who genuinely overlook recordkeeping requirements. It is aimed at deterring the small minority of employers—and I reinforce that it is a small minority and the overwhelming majority of employers do the right thing—who deliberately fail to keep records as part of a systematic plan to underpay workers and disguise their wrongdoing. This will also help ensure that employees receive their legal entitlements under the act and levels the playing field for those employers who are doing the right thing and comply with their legal obligations to their employees.

At any one time in my electorate of Hinkler there can be a large number of backpackers who are working on local farms. A common complaint that I have heard over the years is that lack of paperwork makes it hard to establish that underpayment has actually taken place. Working holiday-makers are not just a travelling workforce; they are also an essential part of the tourism industry. Tourism Australia is promoting Australia to potential working holiday makers through a $10 million global youth targeted advertising campaign. Our growers require a large labour force of unskilled workers for short periods of time and they need them at short notice; otherwise, their crops would sit there, they would not be picked and that would be a great loss to our economy. We want people here on working holiday visas to enjoy their time in Australia both while they work and whilst they are a tourist. And we need to ensure that when they go home they encourage others to come here and have exactly the same experience. We do not want them to go home and tell people they were ripped off or treated poorly.

Under this legislation, the Fair Work Ombudsman will have its evidence gathering powers strengthened to ensure the exploitation of vulnerable workers can be effectively investigated. These powers will be similar to those already available to corporate regulators like the Australian Securities Investment Commission and the Australian Competition and Consumer Commission. New examination powers will provide the Fair Work Ombudsman with a greater suite of options to investigate potential noncompliance with workplace laws. This will help achieve positive investigation outcomes where existing powers to require the production of documents fall short because there are no employer records or other relevant documents. This will enable the most serious cases involving the exploitation of vulnerable workers to be properly investigated, even if no documents are produced. The bill will also give the Fair Work Ombudsman new avenues to pursue those who hinder or obstruct investigations, or who provide false or misleading information to the regulator; and penalties will also apply to individuals and bodies corporate who fail to comply with an FWA notice.

New provisions in this legislation will make franchisors and holding companies responsible for underpayments by their franchisees or subsidiaries where they knew or were reasonably to have known of the contraventions and failed to take reasonable steps to prevent them. Some franchisors and holding companies have established franchise agreements and subsidiaries in their corporate structure that operate on a business model based on underpaying workers. Some have either been blind to the problem, which is unlikely, or not taken sufficient action to deal with it once it was brought to their attention.

The highly publicised case of the 7-Eleven franchisees shows that more needs to be done by the franchisors and holding companies to protect vulnerable workers employed in their business networks. These new provisions only apply to the franchisor—entities which have is significant degree of influence or control over the relevant franchisee’s affairs. Where a franchisor or holding company should have known of the breach but did not take reasonable steps to try to prevent it, they may be liable for the underpayments. There is no liability if the franchisor or holding company has taken reasonable steps to deal with the problem.

Lastly, the bill will expressly prohibit employers from unreasonably requiring their employees to make payments. This seems unfathomable to me that this would even happen but there are instances where employers have forced employees to hand back part of their wages so they can keep their job. An overseas worker employed as a cook on the Gold Coast was allegedly required to pay back more than $21,000 of her wages to the employer. The Fair Work Ombudsman claims the Korean national felt compelled to do it as she was concerned her employer would cease to sponsor her 457 visa if she did not. Asking an employee for any amount to be spent or money to be paid out of an employee’s pocket in a way which involves undue influence, duress or coercion will always be unreasonable and unacceptable. Under the amendments, any employee who has paid cash back or made other payments which are unreasonable is entitled to have the amounts reimbursed by their employer. This legislation will deliver on the commitment made by the coalition government to provide greater protection for vulnerable workers and hold accountable those who intentionally exploit those workers.

In the brief time I have left, I want to mention hapless member for Bundaberg, Leanne Donaldson, who, on 3 May 2017, put in our local paper, the Bundaberg News Mail, a story that we had done nothing for local workers, and that it was only the state Labor government which was out there making changes which would be of a difference to these people who have been exploited. I have stood in this place on many occasions and given credit where credit is due. I have given credit certainly to Minister Jones, who is a Labor Minister for Tourism in Queensland, for her work with me on HMAS Tobruk to deliver it for the people of Wide Bay as a piece of tourism infrastructure. But for a member who obviously has some problems with her memory, who has clearly forgotten what has happened over the last three or four years, to make a public statement to say that we have done nothing is quite simply unacceptable. It is the coalition government which has delivered these changes. It is the coalition government and the National Party in particular which have moved things through the federal conference, through the Nationals’ party room unanimously. It was us who had the meetings, it was us who consulted with stakeholders, it was us who made the changes and it was us who delivered $20 million to Fair Work to make a difference. It is absolutely us that implemented Taskforce Cadena, which is out there making a real difference to the people who are being exploited. This is the reality. But here we have a member who, I have to say, forgot to pay her bills for some three or four years. However, to be out there spruiking that nothing has been done is just clearly unacceptable. The member for Bundaberg should be out giving credit where it is due, because these changes make a real difference to workers who are being exploited.

The Queensland Labor government has form. Would you believe the proposal is to charge a fee? The solution for them is that they would like to have a regulation which lists all labour hire firms. To be on the list, of course, firms will have to pay, so they are going to tax them. On top of that, firms have to report the number of employees they have, as well as the number of employees engaged through work visa arrangements. Now, I think whoever put this together has never worked in the horticulture field. We are talking about thousands and thousands of workers, which change not only on a weekly or daily basis but on an hourly basis. Fundamentally, workers could do three hours of work and move to a different property on a different farm with a different employer every single week.

This is another burden of red tape on our hardworking small businesses. This is another tax from the Queensland Labor government, which small businesses are going to absolutely have to pay, unfortunately. Then, to be out to say, ‘This is the only solution,’ I think, is incorrect. The absolute best way to do this is the way that we have taken it on in consultation with the state governments. Taskforce Cadena brings together all of the different jurisdictions. It has been successful. It is making a difference. It is cracking down, and I can tell you that, being on the ground, we have seen the results.

In my electorate, specifically in my home town, I have seen four brand-new backpacker accommodation hostels. That is clearly because we are making a real difference on the ground for people who are being exploited. Certainly, we will continue to do that. I commend the bill to House.