Labour hire companies face harsher penalties under new SA laws if workers exploitedDecember 6th, 2017 | | industry
People running labour hire companies that exploit workers and dodge tax will face up to three years in jail under laws that have passed South Australia’s Parliament. The laws were sparked by a Four Corners investigation that found extreme exploitation and slave-like conditions in the food production industry, mostly affecting workers employed by labour hire companies.
The legislation means companies operating in South Australia must be licensed and will face tougher penalties, including jail time, if they flout the law. Employment Minister Kyam Maher (pictured) told Parliament unscrupulous operators were underpaying workers and avoiding tax, workers compensation payments and superannuation.
He said when those companies come under question, they quickly fold and start up a new business — a process known as ‘phoenixing’. Mr Maher said in one case a worker lost their fingers, and the company folded soon after.
“The labour hire company that supplied the workers were unable to be contacted,” he said. “And inspectors were unable to take any action against the labour hire company.”
Audit finds companies dodging payroll tax Mr Maher said he had also heard from a worker who had been underpaid wages and superannuation over a two-year period.
“When she started making inquiries she received a text message from the host employer just a few hours before she was due to commence her shift, advising her she was no longer required because there was not enough work,” he said. The company then folded and “the individuals that operated the labour hire company that she worked for started a new labour hire company”, Mr Maher said.
An audit of labour hire companies by Revenue SA found several that were not paying the required payroll tax, with the worst offender going into liquidation owing more than $500,000.
Union calls for national reform
National Union of Workers‘ general secretary Tim Kennedy welcomed the laws, but said there needed to be national reform. “We would urge the Federal Government to reconsider its opposition to regulating labour hire nationally,” he said.
“Failing a commitment from the Turnbull Government to fix these matters, it is heartening to see governments such as the Weatherill Government stepping up to the plate and making certain that workers aren’t exploited.”
Similar laws have already passed in Queensland, and a bill is currently before the Victorian Parliament.
QLD, SA – passed, VIC – bill before parliament, what about NSW, NT, ACT and WA? This is stronger if its a federal or at please pan-state action.