Farmers may be liable warns Ombudsman

August 5th, 2014 | | industry

Screen Shot 2014-08-05 at 3.23.40 pmThe Fair Work Ombudsman is cracking down on the exploitation of working holiday makers on 417 visas, following a large spike in complaints, according to a recent report by ABC Radio.

Farmers are being warned they could be held liable for the underpayment of workers on their farms, even if they’re employed through labour hire companies.

Ombudsman Natalie James says “foreign workers, who are required to work 88 days in a regional area to gain a one-year visa extension, are increasingly complaining about their wages and conditions. Complaints from 417 visas now are almost a third of complaints from all overseas workers and visa holders.

“These workers often don’t complain,” James told the ABC.

“They are primarily often concerned with just getting the 88 days’ work and obviously they need to produce evidence of that, and so I think there is a tendency to put up with a lot before they will complain.”

She says farmers are responsible for ensuring workers on their properties are being paid award wages, even if they are employed through labour hire companies.

“If you’re not employing the people who are working on your farm, but you are closing your eyes to the fact that these workers are being consulted and they are not being paid their minimum rates, then you need to be aware that you could be found liable, if you knew, or you should have known that was going on.”

Carl Walker, president of the Bowen Gumlu Growers Association, which represents fruit and vegetable growers in north Queensland’s Bowen region, has welcomed the Fair Work Ombudsman’s clampdown, and says it will target the small minority of people who are doing the wrong thing. He says the industry would fall apart if it weren’t for workers on 417 visas.

Walker said he’s heard stories of farmers being duped by dodgy contractors, who tell them they are employing a certain number of workers to pick a crop, but actually employ more workers and pay them less.

“The contracts that they (labour hire firms) sign with growers … say number one that the person must be paid a minimum of X amount … they must have their visa, they must be eligible to work, all these conditions are on these contracts and they sign it,” Walker told the ABC.

“If the contractor doesn’t adhere to those rules, it’s really hard for the grower to say ‘hang on a minute, I trusted this bloke I thought he was doing the right thing, but it turns out he’s not’. ”

“How can the grower be liable? It’s a very, very grey area,” he said.

Written by Kris Madden


Is it fair that the growers may be liable if a labour hire contractor doesn’t do the right thing? Have your say.

8 Responses

  1. Macca says:

    The Weekly Times reports 6/08/14 that the employment watchdog has prosecuted just one horticulture workplace for beaches against overseas workers, despite a spike of complaints.
    The Fair Work Ombudsman made the revelation when it announced this week it would review the issues raised by backpackers on the 417 working holiday visa.
    The Weekly Times has revealed allegations two Victorian farms were underpaying Asian backpackers via labour hire firms, as well as overseas workers being asked to pay up to $600 for a visa extensions.
    In one case, Taiwanese backpackers lodged complaints to the FWO about alleged underpayment at a Maffra farm, but claim no action was taken and the labour hire company was still operating, paying workers similar wages.
    In the last two years, the FWO said it had had received 2000 complaints from people with 417 working holiday visas, a third of all complaints from overseas workers.
    And the agriculture sector was among the top three industries where workers were lodging these complaints, behind the accommodation and food service industries.
    Yet among the 51 prosecutions the FWO has brought on employers since the office was created in 2009, only one was against a horticulture business.
    The restaurant, retail and fast food sectors were subject to the most litigations by EWO.
    the Fair Work Ombudsman, Natalie James, said the office would examine allegations some employers were demanding backpackers work for free to gt a visa extension.
    In June, THe Weekly Times revealed backpackers working for three months for no pay on farms to qualify for a second-year visa extension.
    Ms James said they would be working with the Immigration Department to review these allegations.
    “Underpayment of wages, employees making payments to employers and third parties in return for documentation supporting their second visa application and exploitation of employees in exchange for accommodation programs will all be dealt with.” she said.
    A report of the review is expected next year.
    Assistant Minister for Immigration Senator Michaelia Cash said her department would work closely with the FWO and had no tolerance for employers found to be exploiting workers.

  2. Suzi says:

    Backpackers working for free in exchange for their visas? Have you heard of the Wwoof organisation?

    That is exactly what they do and quite successfully….

  3. Sam says:

    Instead of putting the blame on labour hire companies, I say the blame SHOULD be put on the growers. When a growers insists on paying ridiculously low piecework rates to the aforementioned labour-hire company, and justifies it with something along the lines of “I can employ local Aussies the same amount in cash to get the job done, so why should I pay more to employ backpackers?” One thing that should be kept in mind is that those Aussies getting paid in cash are, invariably, on Centrelink welfare payment, the cash income goes undeclared, and taxpayers lose out … again.

    So perhaps the watchdogs should be focusing more on welfare fraud instead?

    • Suzi says:

      I agree with you Sam. I do know a local farmer who only pays cash, I know this because he took on a young backpacker (he must have been short of labour that week). She came to me telling me it was a cash job and she couldn’t get a second visa through him, so I found her a legal job. It is happening out there, but not on a a big scale as some farms just do not have the amount of cash needed to pay workers unless they are selling their produce directly to the public (and therefore able to accumulate large stashes of cash) and not going through the wholesale markets

  4. Macca says:

    Some of those found to be working for non-payment were on the Wwoof program but it doesn’t hide the fact that their are those that are abusing the system.
    There has been reports of overseas syndicates setting as contractors and hi-jacking the program.

    Herald Sun Letters 7 Aug. Keeping Workers Safe
    The headline, “Foreign jobs grab” (HS, Aug 5), misrepresents a review of the 417 working holiday visa.
    The 417 allows young overseas people to visit Australia for up to two years. They must undertake 88 days specified work in a designated regional area and in certain industries in their first year to be eligible to stay for the second year.
    It is the potential for exploitation of the 417 visa holders as they undertake this work, often with limited English, that is of concern.
    In the past two financial years, we have received about 2000 requests for assistance from 417 visa holders. The back pay we have recouped for those found to have been underpaid their entitlements has risen from $67,000 to $345,000 in three years.
    It is important the integrity of the 417 scheme is upheld.
    Natalie James,
    Fair Work Ombudsman

  5. Suzi says:

    Natalie, the horticultural award has gone up again, and next year it will go up again and again and again. Ten years ago the award rate was $10 or $11 an hour and now it is $21. Where will it end?

    Produce prices do not go up in such increments. Prices returned to the farmers have not increased significantly in the last five year. With the wholesaler taking their margins, the chain stores taking their margins it becomes ever harder for the farmer to make a decent living.

    Unfortunately the pressures of increased labour charges that are imposed on them by the Australian Government will see an increase in farmers finding illegal contractors so the farmer can make some sort of profit for their efforts.

    I think it will be a cat and mouse game between farmers and the FWO for the years to come. Or maybe we should forget about a farming industry in Australia and just import our food from China?

  6. Macca says:

    For many years rural woman have been calling on the Federal Government to include on-farm domestic work like child care to the specified work list under the working holiday program, especially during harvest season.
    Finding childcare in rural and regional areas is exceptionally challenging at this time as it all hands on deck.

    Job rules to spark childcare ‘exodus’ (TWA 9 Aug ’14)
    Tens of thousands of children will be be forced out of their child-care centres if stringent new work rules are imposed on parents, according to the Australian Childcare Alliance which represents private providers.
    The Productivity Commission has delivered an interim draft report for a major overhaul of the childcare system which calls for both parents to work or study for at least 24 hours a fortnight to qualify for government subsides.
    Gwynn Bridge, head of ACA said the recommendation would have a devastating effect on children and families that need care even though they may be not strictly fulfill the proposed new criteria
    She said she thought there would be an exodus from most centres hurting people in suburban, regional and rural areas the hardest.
    The commission also recommends the government extend backpacker visas to encourage parents to hire live-in foreign au pairs on the working holiday program

  7. Suzi says:

    ….but where does it stop Macca?
    I have read that the hospitality industry also wants to be part of the Working Holiday Program and have the ability to give second visas in the relevant postcode.
    There are only so many backpackers to go around……