Submission, Peter Crisp MLA
NOVEMBER 2015
Introduction
The challenge for the Victorian Inquiry into the Labour Hire Industry and Insecure Work is that each
level of government has responsibilities, thus a response by any one of the levels of government
alone will be ineffective. Local government in Mildura has had a long association with the issues,
state government a lesser role and similarly federal government.
Industry has some responsibilities also in who they hire and the conditions in which the work is
carried out, however without guidance and support from the government structure, industries efforts
are unlikely to be effective.
This submission will address the Terms of Reference.
The responses should be read in conjunction with the pre-submission background paper.
(a) The extent, nature and consequence of labour hire employment in Victoria, including but not
limited to:
ii. the use of labour hire in particular industries and/or regions;
Mildura has a strong agriculture sector which has always relied on seasonal labour. The seasonal
labour has come from a pool of Australian itinerant workers, locally based itinerant workers,
migrants and backpackers. Migrants and backpackers are potentially vulnerable to exploitation due
to being new arrivals and sometimes due to language constraints. Immigrants do have a support
network that is principally provided by the Sunraysia Mallee Ethnic Community Council, whereas to
my knowledge backpackers are reliant on word of mouth and social media.
The industries reliant on seasonal labour are the citrus industry in winter and early spring,
asparagus in spring and autumn, avocado in spring and early summer, tablegrapes principally in
January to April. There are also opportunities in fresh vegetables. The industries in the Mildura
(Sunraysia) region rely particularly on backpackers to meet fluctuating demand. They are a supply
of labour that can be switched on and switched off at short notice.
The labour hire arrangements seem to depend on the scale and preference of the property
operators. Some employers employ seasonal labour directly whilst others use intermediaries such
as labour hire contractors or accommodation providers. Some farming operations do offer
accommodation on site.
Backpackers are not only seasonal workers but they can also be considered as tourists as they
involve themselves in the region during their stay. They undertake sightseeing and they certainly
spent money enjoying themselves.
v. the legal rights and obligations of labour hire employees, companies and host
organisations/entities and any ambiguity that exists between them;
Communication issues between employees, contractors and employers can be difficult at times and
at worst clearly negligent in order to mislead the employees. It is my experience that most
contractors, employees and employers do have effective communication on what the job is and the
pay and condition, however there are difficulties. One of the difficulties is the misunderstanding
between what work paid by the hour and what work is piece rates. Piece rates of pay have a long
history in the Sunraysia region where an employee is paid by the unit ie per bin of oranges, per case
of tablegrapes, per vine pruned or per lug of asparagus picked, just to name a few.
Miscommunication and understanding of how you are paid does account for significant issues. Most
employers and accommodation providers go to adequate lengths to explain the difference, however
a few do not and this is where difficulties can begin but in most cases are resolvable. The more
serious issues occur when there is an intermediary involved, being a labour hire contractor, or
someone purporting to be a labour hire contractor who do no communicate adequately the
remuneration and then proceed to take a commission for arranging the work and charge for
transport. This then leads to the examples of people working for very little money at the end of the
day. Clearly there is a sector of the industry that needs to communicate far more effectively with the
employees they are providing.
Also, employees need to be better informed as to the work and the method of payment for the work
they are about to undertake.
Clearly the most vulnerable are the new arrivals. Once seasonal workers have some experience
they very quickly pick up the right questions to ask. Being the younger generation they also have
access to social media once they get ‘settled’ into Australia.
Finding: there is a need for better communication.
vii. the need for labour hire companies and host organisations/entities to provide workers with
suitable accommodation; and
Experienced Australian seasonal workers are quite capable of dealing with labour hire companies
and arranging suitable accommodation. New migrants have access to services to assist, however
backpackers, particularly new arrivals, need to both source accommodation and work. In Mildura,
backpackers are most likely to contact a hostel to seek accommodation and information about work
availability, thus hostels need to have direct relationships with employers or a relationship with a
labour hire contractor or be both.
Various forms of accommodation are available, the most common is shared dormitory style for
backpackers.
Hostels providing accommodation can be registered thus invoking the Public Health and Wellbeing
Act and other Acts that protect the safety of backpackers as well as providing a minimum standard
of comfort. Registered hostels fall under the responsibility of local government and the legislation is
a state government responsibility. It is my experience that the difficult issues arise with
establishments providing accommodation that choose not to be registered. Unfortunately
backpackers are not informed and therefore not empowered to ask whether a hostel is registered or
not. Accommodation providers are not required to state whether they are registered or not in any
advertising they may choose to use to attract backpackers.
Finding: current hostel registration arrangements are inadequate
(b) The extent, nature and consequence of other forms of insecure work in Victoria, including but not
limited to:
i. the use of working visas, particularly in insecure, low paid, unskilled or semi-skilled jobs and
trades;
The Mildura region has been a mecca for newcomers and working holiday visitors for a very long
time. The unskilled and semi-skilled work and its seasonal nature has been viewed by these
groups as a positive. Newcomers to Australia, utilise seasonal work to refine their language skills
and in many cases to have existing skills recognised and for those on working holiday visas it
provides an opportunity to supplement their savings for their great Australian adventure.
As I understand, if you are under 30 and from a country that reciprocates, you can have a working
holiday visa for one year. The Federal government varied this class of visa some years ago to
allow for a twelve month extension if 88 days of work was completed in rural Australia and in the
agricultural, construction and mining sectors. This has increased the supply of seasonal labour
but has also increased opportunities for exploitation of seasonal workers.
(c) In making recommendations, the Inquiry should have regard to matters including:
iv. the impact, benefits, or possible drawbacks of any regulatory regime applying to labour hire
businesses, on Victorian business;
I am advised by a number of registered hostel operators and labour hire businesses that any
drawbacks in administering a higher regulatory regime would be more than offset by the
improvement in the perception of the industry.
The challenge will be to identify from the evidence given of the difficulties in the industry
measures that will be effective in a complex regulatory environment involving other levels of
government.
v. the ability of any Victorian regulatory arrangements to operate in the absence of a national
approach;
Victoria has governance of a number of Acts that are applicable to this sector, for example
the Public Health and Wellbeing Act, the Residential Tenancy Act and Consumer Law.
A number of business models have evolved that appear to avoid any of the existing
regulatory requirements.
3.3 Questions for participants to address in submissions
To what extent is labour hire used in Victoria? In which industries and regions is it most prevalent?
Labour hire is used extensively in horticulture in the Mildura area and to a lesser extent hospitality,
the building industry and professional services.
What do labour hire suppliers in Victoria look like (e.g. size, sectors they operate in, local or part of
national/multinational business)?
In the Mildura region most are locally based business.
How are labour hire workers generally engaged? To what extent are they engaged as employees?
Or as independent contractors?
Mostly as employees on piece work or hourly rate. There has been some indications that
backpackers have been requested to get ABNs but this practice is not widely established in Mildura.
What working conditions do labour hire workers typically have? What differences are there, if any,
between the conditions of direct employees of a host organisation and labour hire workers?
For seasonal workers on farm there is little difference in their working conditions to other employees.
The issues arise in the fees and charges from labour hire contractors that direct employees may not
incur eg transport, accommodation and commission charges.
To what extent is accommodation provided by labour hire companies to workers, and what is its
nature and cost?
Labour hire companies can provide accommodation and in many cases do not. The costs for
accommodation typically seem to be around $150 per week which is competitive with what
backpacker hostels charge. Whilst most hostel operators provide suitable accommodation, those
labour hire companies/hostels trying to circumnavigate the system can provide accommodation of a
substandard nature.
In what ways do hosts typically use labour hire workers? Are they used to supplement or to replace
ongoing workforces or direct employees?
They are generally used to supplement other sources of labour during peak periods.
To what extent do hosts inquire into the labour practices of labour hire suppliers? Should this occur?
It is my view that most employers (hosts) will want a happy and productive workplace. However,
there is sufficient evidence to suggest that some unscrupulous labour hire contractors have found a
niche market with equally unscrupulous employers.
Employers (hosts) have responsibilities under Commonwealth law to ensure that the workers on
their property have a legal right to be working in Australia.
Is there evidence of labour hire being used to evade workplace laws and other legal obligations?
Fairwork Australia are the body that investigate such matters and my office has referred
backpackers to Fairwork Australia.
Does the use of labour hire arrangements lead to positive outcomes for Victorian workers,
businesses and the broader community? What problems does it create?
In the agriculture sector crops need to be harvested at a particular time to meet quality and market
requirements. The use of seasonal labour ensures that crops are not left to rot and therefore there
are benefits to businesses and the broader community. The problems within the seasonal labour
sector threaten the continued supply of labour and thus are a threat to the broader community.
Seasonal labour is a vital sector for business within the Mildura region and there needs to be a
structure in place that ensures future supply is dependent on workers having confidence that they
will be treated fairly in this region.
Finding: Seasonal labour is vital for Sunraysia’s industries.
4.2 Vulnerable Workers
WHM visa holders undertake a significant amount of unskilled and low-skilled work. There is recent
evidence of WHM visa holders at the tail end of complex supply chains suffering exploitation
including significant underpayments, extremely long hours of work, being charged high rents for
substandard accommodation, discrimination and misclassification as contractors.
As at October 2014 there were 402,363 student visa holders in Australia.75 Student visas permit
most students to work for up to 40 hours per fortnight while their course is in session and for
unlimited hours during course breaks. In addition, there were 21,859 graduate visa holders in
Australia, who are permitted to work temporarily here following the completion of their course of
study. There is no comprehensive data on the prevalence of international student work, or the types
of jobs these workers are employed in.
There are a number of training organisations who offers courses for those on student visas and also
offer employment and accommodation within the course. This is a very hidden sector as most of
these students have an objective of a qualification which may enable them to return home or in an
unknown number of cases provide a conduit to citizenship. Because of what is at stake this is a
sector of the insecure labour market that keeps its head well down. However, there is concern
amongst some training organisations about the use of student visa holders to provide a subsidised
workforce operating in conditions and pay at significantly less than the going rate.
Proof of these practices is very difficult to find.
Other Vulnerable Workers
My office has referred one case of seasonal backpacker claiming harassment to Mallee Sexual
Assault.
4.5. Questions for participants to address in submissions
What experience or evidence can you provide of insecure work in Victoria? What form of working
arrangements give rise to this? Which industries and regions does it occur in?
Agriculture is the main industry that utilises seasonal workers but within the electorate of Mildura
there is limited use by the grain industry during sowing and harvest and some utilisation as day
labour in the construction industry.
What experience or evidence can you provide of sham contracting?
What experience or evidence can you provide of the use – or misuse – of working visas in Victoria?
Which industries and regions are they used in? What kinds of jobs do working visa holders obtain?
Recent changes by the Commonwealth have tightened up requirements for signing off on the 88
days. The employer (farmer) now must sign off rather than the labour hire contractor and/or the
accommodation provider. There have been some transitional issues that have occurred where
seasonal workers have continued to seek sign off from labour hire contractors and do not have the
transport or sufficient information to find the farmer who actually employed them.
What experience or evidence can you provide of exploitation of vulnerable workers in Victoria? This
could include working visa holders, young or older workers, workers from a non-English speaking
background, women workers, workers with low levels of formal education, workers with a disability
or other vulnerable workers.
What experience or evidence can you provide regarding the use of phoenix activity, supply chains or
franchising arrangements contributing to insecure work, the exploitation of vulnerable workers or
unfairness for competing businesses?
What are the effects of insecure work on Victorian workers, including their family life, community
involvement, housing and financial arrangements?
Robinvale has a high semi resident seasonal working population who from time to time will travel
extensively to fill up the gaps in the local work calendar. This has significant effects on consistent
school attendance and the load on other community services such as hospitals, etc. Smaller
communities with fluctuating seasonal populations have significant issues with service demand
during peak periods.
5. The current regulatory landscape and other regulatory approaches
5.1 Fairwork Act
Although this is Federal legislation I make the following comments. The Fairwork Ombudsman has
been a regular visit to Mildura to gather evidence of unconscionable activities in the seasonal work
sector. The challenge they face is not only to collect the evidence but to be able to proceed to
prosecution, particularly in the case of working holiday visa holders leaving the country before a
prosecution can be launched. The complainants wish to see justice, however are unable to remain
in the country to assist.
Also, it is difficult to proceed when the seasonal workers have been paid in cash, have not received
a pay slip and cannot identify or locate the employer because in many cases they are being
transported to the property in darkness for an early start and do not accurately remember locations
or travel routes in a foreign environment.
5.2. Victorian legislation
The Residential Tenancies (Rooming House Standards) Regulations 2012 (Vic) set down minimum
standards for the privacy, security, safety and amenity of rooming houses (this is relevant where
rooming house accommodation is provided by an employer as part of an employment arrangement).
In the Mildura region this Act does not assist with the issues that we have been raising with the
inquiry.
Clearly there are
gaps in Victorian legislation that have allowed business models to evolve that enable the operators
to act with immunity.
The Health and Wellbeing Act should also be included here as it can be utilised to ensure that there
are sufficient sanitary arrangements for the number of people being accommodated.
Finding: There are gaps in Victorian law that allow for exploitation of seasonal workers, particularly
backpackers.
5.4. Labour hire reform proposals
The Recruitment and Consulting Services Association Australia and New Zealand (RCSA) has
adopted two initiatives to improve the standards of operators in sectors including the on-hire
provision of labour:
The code only works for those who are members and I see little evidence that the RSCA is active in
the seasonal labour hire and accommodation sector in the Mildura region.
The ACTU has called for changes to the Fair Work Act to impose responsibility for workers’
employment entitlements on both host organisations and labour hire suppliers; and the
establishment of a national licensing scheme for labour hire operators. Under the licensing system,
minimum capital requirements would apply to any person or company intending to register as a
labour hire provider, as well as requirements relating to compliance with minimum employment
standards, superannuation, taxation, etc. Avenues would be provided for enforcement of licensing
standards, with remedies including penalties and recovery of underpaid wages for employees.
I would support a national licensing scheme for labour hire contractors operating in the seasonal
labour market. Such a scheme would provide security for seasonal workers by having labour
contractors identifiable and de-registerable should any of these contractors be found to have
questionable business practices. This would also assist in another complication that occurs with an
unregulated labour hire sector where a farmer employer seeks workers to harvest fruit undertakes
all the duties an employer has to ensure they are not employing a legal worker only to find that for
one reason or another a legal worker is substituted by an illegal worker who may then be identified
on or off the farm. Horticulture in particular is corporatising and you may have an employer with
staff on several farms and not be directly supervising them as this is the role of the labour contractor
but is responsible for the labour contractors activities. Clearly there needs to be a registration
scheme to ensure that contractors as well as the employer are identified and liable in the chain of
responsibility.
Finding: Labour hire contractors should be registered.
5.5. Regulatory approaches in other Australian states and internationally
The Agents Act 2003 (ACT) requires employment agents to be licenced and this does have some
possibilities for Victoria. However in crafting a legislative response based on the ACT Act,
consideration should be given to the style of contract for a particular player in the
accommodation/contracting sector with backpackers where workers sign away any protection that
might be offered.
UK Gangmasters Licensing Authority
I have a concern that this style of approach may be more about a tax collection mechanism rather
than effective control in the insecure employment sector.
5.6. Questions for participants to address in submissions
What regulatory options are available to address the issues raised by the Terms of Reference,
within the limits of Victoria’s legislative powers?
Through either regulation or legislation Victoria should ensure that all accommodation/backpacker
hostels are registered and that that registration is made clear in their advertising material.
The current regulation/legislation should be amended to remove the notice period required for local
government to undertake inspection of premises.
What models could operate for a national approach to regulation of the labour hire industry?
Labour hire contractors should be licenced or registered at a national level as many operate cross
borders. Any advertising by these contractors should include their registration number. One of the
requirements for registration is that labour contractors provide appropriate information to the workers
which specifies the type of job to be undertaken, the method of payment (hourly or piece) and
address and contact details of the employer including an ABN. It should be clear whether the labour
contractor is paying the workers or whether the property owner is paying the employees.
Fairwork Australia with their experience should be able to provide advice to the inquiry as to what
type of documentation should be produced, what it should contain and how it should be distributed.
Most of my issues have been with first time employment experiences in Australia. That is, someone
who has got off the plane, looked up a website and responded to an advertisement and travelled to
Mildura. Once backpackers have been in Australia for a short period they very quickly get their
social media organised, lock on to such sites at the Harvest Labour Trail and quickly become
competent and confident in seeking suitable work and accommodation. At a national level I see
value in some basic information to be provided to the WHM visa holder and also to student visa
permit holders about the labour hire industry and seasonal work in Australia. It could be as simple
as an email to the visa applicant or holder.
What would be the impact of a statutory licensing scheme for labour hire operators in Victoria,
including requirements for licensees to comply with minimum standards for the fair treatment of
workers?
Most contractors and backpacker hostels operate ethically and from my experience a minimum set
of standards would have little impact on their operations.
Final Comments
Much of this submission has focussed on backpackers and seasonal work and I think considerable
improvement can be achieved with some changes in state government legislation/regulation and
some cooperation with the Federal government who also have an inquiry running at this time. I
believe it is extremely important for Victoria’s reputation, both at home and internationally, that this
sector is managed in a way to deliver confidence to visitors/workers. I have always said that it is the
brightest and best of a country who travel and the impression we make they will take back to their
home countries and discuss with their peers. Some of the issues that persist in this industry have
already been raised on the international media and I have been interviewed by El Globo on this
matter.
We as a state/country are better than this and I look forward to the Inquiry’s recommendations.
Recommendations
1. That accommodation/backpacker hostels be registered.
2. The registration details must be displayed on advertising material.
3. That local government be empowered to make no notice inspection of accommodation premises.
4. Labour hire contractors should be registered.
5. Labour hire contractors should provide information on the type of work and the rate of pay to
seasonal workers.
6. Working Holiday Visa holders and Student Visa Permit holders be provided with information on
labour hire and seasonal work in Australia prior to arrival.