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Growers call for swift action to crack down on worker exploitation

QLD Country Hour - Kallee Buchanan

A Queensland growers group has welcomed a taskforce to crack down on the exploitation of foreign workers on farms, but warns real action needs to be taken.

MORE INFO Link: http://www.abc.net.au/news/2015-05-19/qch-visa-taskforce/6479632#action needs

SWA's opinion:

Although this article originates from Queensland the points of discussion have extreme relevance and ramifications for producers in all other states including Victoria.

Is there anyone out there concerned about what the end results of the dedicated taskforce investigations might bring?

It must be worrying for the growers because to a greater degree and in the majority of cases the grower is honest and ethical but in all cases are seen to be responsible and liable for the actions of others – the unscrupulous labour hire contractor. The grower enters into Labour Hire Contractor Agreements in good faith with the Labour Hire Contractors. The grower believes that the contractor will do the right thing, just as the grower does when he signs the Major Retailers (Coles, Aldi, Woolworths) Ethical Standards and Sourcing Agreement, so that he can supply the Supermarkets. The grower believes that if the contractor signs the Labour Hire Agreement he will act in an ethical manner and pay workers according to the relevant Award. If the Contractor unfairly treats his/her staff or under pays them, is the grower at fault? Coles, Aldi and Woolworths seem protected by their Agreements.

The problem seems to be that the grower pays the Labour Hire Contractor an agreed Award rate or fee to pick or process various crops and products. The contractor then arranges for his workers to complete the task. He may utilise 15 -20 people to do a job that 10 workers could complete and achieve the Award rate. With 15 – 20 workers doing the job each person will net much less in their wages than they should have under the Award but possibly completing the job in a shorter time frame. This would earn more money for the contractor. On the other hand if Piece Rates are used and calculated incorrectly and the targets set too high, some workers may not achieve the required production targets and consequently earn well under the Award rate.

A full investigation should involve identifying and analysing the contractor workers actual workflow, production targets and worker numbers, compared to quantities processed, as well as analyse the hours worked by each team member. This would involve a thorough investigation, an extended time period, possibly a huge disruption to businesses, and a huge expense. Will the Government do that or impose strict new regulations, leaving the obligation firmly on the grower’s shoulders, again.

The majority of Growers pay the labour hire contractor what they believe to be the correct award rates based on the contractor’s agreement to accept the task, and sign the Labour Hire Agreement. Now, if the contractor doesn’t pay the required tax, superannuation and work cover and takes whatever fee or cut off the top of the invoice amount for his/her efforts, do you think the worker would be paid correctly? And the Labour Hire Contractor or his/her Boss keeps the GST as part of his entitlement. The lost GST that the contractor keeps must run into the millions of dollars and the State Governments are missing out. Is this fair and reasonable?

For a grower to mitigate this potential risk to the business, his legal obligation and compliance requirements is to provide the full details of the Labour Hire Contractor to the relevant authorities so they can conduct the necessary enquiries and investigations to clarify the legitimacy of the Contractors and their business activities.

Will the Taskforce find it very difficult to identify and locate the unscrupulous contractors and therefore be unable to charge, convict and fine them or stamp out their presence?

If this is the end result, will the Taskforce recommend the implementation of strict additional regulations across the industry to combat the unscrupulous behaviour, further binding business owners in red tape?
 
Bundaberg Fruit and Vegetable Growers Executive Officer, Peter Hockings said about unscrupulous labour hire contractors:

"When the heat is turned on we find that these business owners, they are a phoenix company, within 24 hours they've got a new ABN, new director, new company name, business as usual”.

He too is concerned about the potential of new stricter and additional regulations being imposed on the sector after the Taskforce completes the investigation.

Another concern is that if the Taskforce is successful in its endeavours, apprehending the culprits, charging, fining or jailing them, what happens with all the legitimate staff left holding the bag with no employer/contractor?

What happens when an investigation is done on a particular grower(s) or region, and the Labour Hire Contractor(s) is found to be unscrupulous and a lot of his workers are illegal? They would be detained leaving the poor old grower out in the cold with no staff to pick and process his products. All of which has dramatic implications throughout the entire supply chain. In the end the consumer will lose out. Prices go up due to undersupply and other jobs are lost.

If the investigations are not conducted in a well planned manner that includes strategies to assist growers to transition from the old contractors to new compliant labour hire contractors, the initiative will create numerous issues throughout the supply chain.
Possibly a suitable strategy might be to ensure that the Taskforce and Field Operatives have alternative options available. They must be established, reliable, compliant, alternative options to provide to the grower to assist him if he finds himself unknowingly utilising an unscrupulous contractor and/or illegal workers. He may lose an integral part of his entire workforce over a 24 hour period with no options or alterative labour to process our food. This could cease operations further up the chain.

A consequence of all of this is that within the supply chain there are hundreds of suppliers and varying pay rates. The ones paying the incorrect wages fly under the radar and get away with their unscrupulous behaviour. Some growers – who knows what percentage- are paying $14.00 to $18.00 per hour, to unscrupulous labour hire contractors, or the equivalent on Piece Rates. The Award rate per hour including all statutory add-ons and GST should be around $30.00, a difference of $12.00 to $18.00 per hour.

Unscrupulous growers are knowingly paying the incorrect Award rate. If a grower is paying $21.09 per hour to the Labour Hire Contractor then it is blatantly obvious that the workers are not going to receive the Award rate. Under the Horticulture Award 2010 the Casual hourly Pay Rate is $21.09 per hour PLUS Superannuation; Workcover; Payroll Tax; and GST; Plus the fee for the Labour Hire Contractor.

It is obvious that payment equivalent to $21.09 per hour to the Labour Hire Contractor is no where near the ethical Award rate. Therefore we have an uneven playing field in the market place. How can the honest and ethical growers compete with their direct competition paying up to half the legal award rate? These unscrupulous growers and contractors operate up the road from the honest growers and contractors. They are often competing for the same business opportunities, grow the same products and have supply contracts with the same major retailers. In the end the unscrupulous grower has a much lower cost of production.

HOW CAN THE HONEST GROWERS COMPETE OR SURVIVE?
A well calculated and closely thought out solution is needed.

We have part of the Solution
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Federal Government and Australian Workers Union (AWU) approved
Fully supported by
The Government and people of Vanuatu & Pacific Nations

The Pacific Seasonal Worker Program
 
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