Working holiday visa’s seedy underbelly

July 1st, 2014 | | industry

Screen Shot 2014-07-01 at 9.30.46 pmEach year, more than 100,000 foreign visitors, the majority of which are backpackers, come to Australia on working holiday visas. The Australian Government’s Working Holiday Visa (WHV) programs were created to enable young travellers to have an extended holiday while earning extra money through short-term employment.

Travellers on a working holiday visa are permitted to stay for a maximum of 12 months. If they wish to stay longer they can apply for a second working holiday visa which allows them to stay for up to an additional 12 months. The catch is that those wanting to extend their stay must have completed 88 days’ work in regional areas of Australia while on their first visa. Not unsurprisingly, to meet these visa conditions, many end up picking fruit on farms along Australia’s harvest trail.

But exploitation of these working holiday makers within Australia’s agricultural industry is rife. Many farmers employ contractors to source fruit pickers on their behalf and to take responsibility for their wages and accommodation. The wages are often paid in cash by a labour hire contractor who also charge costs and weekly rent, often housing the workers in overcrowded properties that do not meet fire and safety standards.

Stories from backpackers reveal that many are paid as low as $7 a day, often working up to six hours a day. Some contractors are now brazenly advertising fruit picking jobs for Asians only, or on internet sites such as Gumtree, seeking backpackers to work on their farm for free. Authorities have warned that the advertisements could be in breach of the Fair Work Act; while ethical labour hire contractors say they can’t compete with the prices being offered to farmers by illegal operators.

Workers must provide evidence of their 88 days of work, such as pay slips, group certificates, payment summaries, tax returns, employer references or equivalent documents. Certain contractors are demanding large sums of cash in exchange for signing off on the work that visa holders are required to do to get a second year in Australia.  In April this year there were reports working holiday visa holders in Gippsland were being forced to work 30 hours for free before the contractor would sign off on their working hours.

Keith Pitt, Federal Member for Hinkler, which includes the Queensland towns of Bundaberg and Hervey Bay, says the exploitation of foreign workers is a national problem; and is one pushing Canberra for legislative changes aimed at driving unscrupulous labour hire contractors out of business.

„It’s something which has been around for a number of years. But the anecdotal evidence which is being produced to my office would indicate that it’s escalating significantly,” said Pitt.

Pitt, himself a former cane farmer and training provider, recently delivered a speech to Federal Parliament in which he declared: “there is a seedy underbelly in the contract labour hire industry in this country which is unfairly damaging the reputation of our agriculture industry and our tourism centres.

„Allegations range from underpayment and exploitation of workers to tax evasion, visa breaches, racial discrimination, intimidation of farmers and overcrowding in private residential properties,” he said.

The Fair Work Ombudsman has formed a specialist team to investigate complaints from overseas workers in Queensland’s Bundaberg region, but locals say finding offenders can be difficult.

„The problem we have in Australia is that the issue crosses so many jurisdictions—local, state and federal government; immigration, taxation, Fair Work, agriculture, police, fire, health and safety, and tourism,” said Pitt.

„One of the problems people face in formally reporting their complaint is the sheer number of agencies involved across all three levels of government. In many cases they are just too scared to give their name to the authorities.

„It’s hard to identify who these people are. They effectively close their company overnight. They remove their capital assets, they take the cash that they have and they start up down the road with another company doing basically exactly the same thing as they have been doing for a long period of time. So they’re hard to catch. And this is one of the issues that we have: it is very, very difficult for our enforcement agents to be on top of these things.

„However, we want to ensure our seasonal workers are protected; that businesses have a level playing field and Australia remains a destination of choice for overseas students and working holiday makers,” he said.

What can be done to end the exploitation of working holiday makers? Have your say.


22 Responses

  1. Jeff Hausler says:

    1/ Penalty Rates must be abolished
    2/ Oz needs common Local, State & Fed employment laws-
    3/ Mandatory 2 year Backpacker work visas
    4/ A Foreign worker Tax threshold of K10
    5/ Oz business must plan now for a rapidly ageing population

    • Suzi says:

      Yes, totally agree Jeff…..however, what your reasoning behind a 2 year backpacker work visa? Primary producers need backpackers to get out of the cities and work on our farms. The government have introduced this excellent program where they come and do their regional service and get their 88 days on our farms – and then they go back to the city!! Gone are the days where we can rely on Australians doing our farm work.

      And for backpackers who have not been in one place for six months well there is no tax free threshold for them. However the majority of farmers do not follow this ruling as some earn so poorly that a $10 wage for a days work, after a 30% + tax, would not keep them on our farms either.

      • Anthony Hamilton says:

        Yeh Suzi!
        If it’s such a good scheme why are so many foreign workers complaining about being ripped off! This is a big problem accross Australia and needs fixing by the Federal Gov’t. Fair Work Australia needs the necessary powers to enforce fines on employers/contractors who exploit foreign workers. If a farmer will not sign the 88day visa if the foreign worker has worked for 88days then he should lose accredition and be banned from the visa accrediation scheme! This problem can be fixed if the federal Gov’t wanted to fix it!

      • Yes Minister says:

        Exploitation, embezzlement and fraud have been developed into art-forms in Australia, and by far the worst offenders are government entities that were ostensibly conceived to protect the interests of individuals. Its hardly surprising that certain private business operators get into the act when all three arms of government (legislature, executive and judiciary) work together to rip off anyone unfortunate enough to fall or be pushed into their clutches. Human Rights do not exist in Australia. Whilst all states have kangaroo tribunals with native jurisdiction over human rights issues, these star chambers do not recognize rules of evidence, they can inform themselves any way they wish (lies and innuendo are fine), and they are not expected to determine the truth or otherwise. If perchance there is no evidence to support a decision, no problem, the quasi-judges simply manufacture it to suit the previously made decision. In short, decisions are made well before any hearing and they ALWAYS favour the party with most influence. The ONLY difference between Australian kangaroo tribunals and the old star chambers is that the latter were abolished hundreds of years ago. A group of us who work in human rights advocacy were told by a special representative of the UN Human Rights Council in September 2016 that Australia is the most corrupt country in the world. Much of the reason for this statement was the obsession of officialdom with sweeping problems under the carpet in stead of dealing with them. As UQ academic Cameron Murray states in his book ‘The Game of Mates’, favours granted to politicians, bureaucrats and the judiciary by big business cohorts bleed the nation dry. Endemic corruption cannot be exposed since perpetuators are protected by a wall of watchdogs created to protect the guilty,and the media doesn’t help as its part of the club of crooks. (See ‘All Governments Lie’ by White Pine Films)

        • John George says:

          What on earth are you talking about? How is this possibly relevant? I think you would probably be better living somewhere else where your utopian view of other countries can be fulfilled, somewhere like Sudan, Somalia or Syria spring to mind as countries where human rights are paramount. Go peddle your mumbo jumbo there.

  2. Suzi says:

    It is terrible what is happening in horticulture in regards to dodgy contractors….and the government will find it very hard to stop these contractors.

    As a farmer myself I have first hand experience of contractors ripping off the backpackers. Some backpacker will fight these contractors via Fairwork but some of them find it too hard and just let them go.

    The buck has to stop with the farmer who puts on these contractors. You cannot tell me the farmer is totally ignorant of what is going on? Does the farmer not talk to the workers on his property? Is he making sure they are getting the right money and some Super? I don’t think so……

    However, on the other hand, the prices we get on the market floor sometimes makes it not worth while growing produce at all. With the increasing cost of labour (remember in America they are fighting for an $11 minimum wage and nothing about employers paying into a pension scheme for workers) it is not surprising some farmers turn a blind eye. If I want to pay a backpacker an hourly wage it has to be over $20 an hour + Super – even if the guy wants to work for $18 an hour, which he/she would be happy with, I am not allowed to pay it. Is that fair what the government is doing to farmers?? $18 an hour gross is still a good wage and if I was offering a real low hourly payment then the worker could make their own mind up whether to take on the work or not.

    As long as the wages rise in horticulture this use of dodgy contractors will not go away.

    And just out of interest…..a farmer close to me employed a Taiwanese contractor who brought about 20 workers to the farm. The Taiwanese contractor was on a Student Visa, but of course had an ABN (which is easy to get for nearly everyone that comes here……). In any one week the farmer would have given at least $40,000 in payment to the contractor….and this guy is on a Student Visa. If he decided to take off with the money then there would be nothing anyone could do. Maybe the rules for handing out ABN’s to everyone and asunder would be a start to controlling these dodgy contractors? Then if there is no ABN the farmer would not be able to claim the contractor as a taxable expense.

    • Hi Suzi, it’s great to have some insight from the other side of this issue. We, as an industry are of course concerned about the welfare of our backpackers. It’s important that backpackers have a great time while in Australia to go home and spread the good word, instead of having a negative view and doing the opposite.

      I know for years the farming community have been heavily reliant on backpackers for seasonal work and we as an industry would be in a sorry situation without the WHV’s. For regional tourism and accommodation operators, without farm work being part of the 457’s second year they would struggle to survive too.

      • Suzi says:

        It is true Thomas, without the 2nd year visa ‘carrot’ we primary producers would be stuffed. It is what keeps the backpackers on our farms.

        However soon the hourly wage within horticulture will be the killer of the industry.

        Without produce increasing in price, and with the supermarkets squeezing us out of any significant profit and with the QLD horticultural award just gone up $21 an hour and Super to 9.50% – I think I’m ready to chuck in the towel.

        I cannot afford to pay any backpacker this sort of money – I pay my skilled mechanic $24+ an hour – and an unskilled backpacker wants nearly the same.

        • Sky says:

          To be fair, the govt has set the minimum wage at $21.08, not workers. The backpackers aren’t going around demanding the minimum wage – most don’t even know it!

          • Suzi says:

            Yes, and a backpacker would work for $15 – $16 and hour gross, it’s a good wage. But the government will come down on me big time if I paid a backpacker that money!

            So we have to play around with piecework payment so it looks legitimate…..

      • Anthony Hamilton says:

        Well Thomas!
        I sounds to me that you have your head stuck up your ar!e. The whole backpacker industry in Australia is getting a very bad name for exploitation of foreign workers! As an Aussie worker I have experienced similar working conditions however by finding reliable clients I have better knowledge on who to work for now. We need a Federal Gov’t acreditation scheme for employers/contractors who employ foreign workers in every state in Australia. The Fair Work Ombudsman needs to be enshined with the necessary laws to fine and force employers/contractors who do not comply with the employment law.! As well any breach of the accreditation scheme by an employer/contractor should ban them from the scheme! Backpackers could use a Gov’t register of Gov’t approved employers/contractors to safely work for.

  3. Greg Cole says:

    I’ve heard this so many times before: increasing wages will be the killer of the industry whatever that industry is – nonsense. Businesses who generally want customers rich and employees poor usually end up performing poorly then blaming the underpaid employee for under-performance. Or wondering why they leave. This isn’t a wages problem.

    We’re not a unique industry: we flourish when our customers have money in their pockets and are looking for something to do. We all know this. So why then do the same issues of exploitation by contractors and fairly rotten treatment by some farmers still exist 20 years after I first read about them?

    We’re a highly regulated country so you’d think working towards striking a balance between farmers interests and those of the 417 workers would – from the Govts perspective – be mana from heaven. A win for everyone. A vote-winner perhaps? Even a headline? But can anyone name a tourism minister or an industry minister or a govt whose taken this issue on? Our recent and current crop of elected representatives (I just can’t call them leaders) are second rate and only concerned with bashing or knifing each other. There’s no leadership here from Govt. That this problem still exists on such a scale is just absurd and demonstrates and indifference towards our sector that is simply laughable.

    • Benny G says:

      I think i would usually agree with you on the point about poor pay and poor performance Greg – but this is an isolated incident where the workers are often (as suzi has alluded) happy to work for a lesser wage because they are desperate to get the second year visa.

      Its only due to this desperation that these backpackers are taken advantage of in the first place.

      agreed though on there needing to be a balance for both the agriculture and tourism sector – they both need each other.

      • Suzi says:

        Until Australians get used to regularly paying $6 a punnet for a 250 gram punnet of strawberries or $10 a kilogram for apples then the backpackers will continue to be ripped off by the dodgy contractors.

        Unfortunately a lot of farmers send their produce to the central wholesale markets and there the agent takes a cut; then it goes to the retailer and that retailer marks it up. So between the farmer and consumer there are two entities in between taking money out.

        And still that produce has to be affordable for the end user. So paying someone $21+ an hour plus Super becomes an impossible task. And then of course there is the question of imports…..USD$7.50 they pay farm workers in the USA! And in the UK the minimum wage is GBP6.50 (about $13). Forget about what they pay in China!

        • Andy says:

          I can completely understand where you’re coming from, Suzi. I’m very heavily involved with citrus contracting in one of Australia’s major citrus-growing regions.

          For those readers not familiar with citrus growing, break-even costs for the grower is approximately $240 per tonne, with this covering water, chemicals and fertilizers, electricity to run the pumps, orchard and machinery maintenance, plus picking costs (piece rates) and freight. So effectively, were the grower to sell his (or her!!) produce for $240/tonne, it would effectively mean having worked for nothing the whole year, ie. break even.

          The season for late navels ended about a month ago, and the 2 largest packing sheds in the region has just released their prices to the growers – this is the price that the growers got paid for bins of fruit that had been picked up up to 6 weeks earlier. Based on feedback from a majority of the 40-odd growers we work closely with, the prices paid to them by the growers all fell in the $140 per tonne to $235 per tonne range – So effectively not even break-even rates.

          In view of those numbers, I can understand why most growers choose to pay for labour costs on a piece rate through a labour hire contractor than directly through a hourly wage.

          And on the issue of piece rates – A good worker with some experience will make above award rates over a normal 7-8 hour day with piece rates. Takes plain old oranges for example. The normal piece rate is about $25 per bin, give or take a couple of $$s either way. A good worker does this in 1 hour or less, which is about 15-20% above award wages. I can do that same bin in about 40 minutes, consistently over a 7-8 hour day, which works out at over $37/hour – significantly higher than minimum wage.

          Perhaps instead of putting the blame on growers or contractors, government watchdog groups should instead shift their focus to packing sheds and similar processors, to ensure that a fair “minimum” price is paid to the growers for their produce?

          Anyway, feel free to comment or disagree, just my 2 cents.

          • Matt says:

            Hi Andy,
            Very interested in what you have said, what is your contact number mate? We own a hostel in the riverland region which does oranges. so just wanted to touch base with you. We could use some more professional contractors down here.

    • Anthony Hamilton says:

      Yes Greg
      I am on the same page as you! This exploitation of foreign workers should not be happening 2016 in Australia! The current Turnbul Government tried to impose a 32% tax on foreign workers but was reduced to 19%. So in my opinion the Turnbul Gov’t don’t really care about it!
      I believe a Gov’t accreditation scheme for all foreign workers in every Australian state that is ovseen by federal Gov’t. It should be properly administered by tourist or industry ministery and monitor the whole backpack industry! The Fair Work Ombudsman needs laws with greater powers to fine and stop ripoffs by employers/contractors who are exploiting foreign and Aussie workers!

  4. Franki says:

    I am an Australian who worked in the horticulture industry for many years. I was reliable, punctual and hard-working – worth every bit of the minimum wage. I would have continued to work in the industry were it not for the constant arguing about pay, having to chase my super, being refused time off for the very occasional doctor’s appointment, being told I could be sacked any time the farmer chose because I was ‘only casual’, and never offered any training or advancement because that was for the ‘local boys’, not women.

    • Suzi says:

      I think you were working for the wrong farm Franki……there are some good farmers out there who look after their staff and appreciate a skilled worker who returns season after season.

      But you have to search for a good farm. I know that I often look for a skilled Australian in my horticultural industry. Backpackers fill the need for unskilled labour but sometimes we need more stable employees who we can rely on year after year.

      • Anthony Hamilton says:

        Hi Suzi!
        I do not care if there are good or bad employers in horticulture or any foreign labour industry in Australia. These employers/contractors need to have Gov’t accreditation and Fair Work Australia needs to be enshrined with laws that ensure non compliant employers/contractors can recieve large fines by the Gov’t if they exploit foreign workers.
        From my own experience FWA is basically a toothless tiger with no real powers to force employers/contractors to pay the correct wages!

    • Anthony Hamilton says:

      Yeh Franki!
      I know what you talkin about! I’ve had unpaid wages and found that my attempt to fix it with Fair Work Australa was unsuccessful! FWA has little power to enforce any ripoffs by employers/contractors so if you cannot fix it with your employer then you have very little options left! The Coalition Federal Gov’t don’t care about workers or there conditions so I don’t think this problem will be fixed any time soon!

  5. Anthony Hamilton says:

    There should be a Federal Gov’t accredited employment contractors/employers to employ foreign labour who are answerable to Fair Work Australia! FWA needs better compliance laws as well for employers/contractors to pay workers the correct wages. From my own personal experience FWA is a ‘toothless tiger’ when it comes to getting correct wages paid and has very little enforcement powers or fines to carry out there job.