Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes:

(a) the recent media investigation on the ABC program Four Corners about the abuse of 7 Eleven employees;

(b) complaints against the 7-Eleven franchise included employees being underpaid and forced to breach their visa requirements and work very long hours without a break; and

(c) these reports and the employment practices of 7-Eleven franchisees have caused significant community concern which must be addressed; and

(2) calls on the Government to:

(a) take immediate action to address the abuse of workers across the 7-Eleven franchise network; and

(b) ensure that workers that were forced by their employers to breach their visa conditions are not penalised.

It is good to be speaking on this motion in the House today. Obviously, Australia has prided itself on being a nation of a fair go, and that is a very important thing for our nation's psychology. But we cannot be the nation of a fair go unless we have a system of wages in this country which has integrity and a system of immigration and visas which has integrity. These two things are fundamental—absolutely fundamental, I think—to our view of ourselves as a country. We certainly cannot be the country of a fair go if we have an immigration system interacting with a wages system which produces something like modern serfdom. We cannot be the nation of a fair go if that is the case.

Recently, due to the good work of the ABC and the good work of the Fairfax press—and both the ABC and the Fairfax press get a bit of a hard time from ministers in this government from time to time—they did the nation a service when they published and broadcast very serious allegations about the 7-Eleven group, which basically revolved around the abuse of both visa conditions and our wages system.

Of course, they featured the rather harrowing story of Sam Pendem, who had to work shifts of up to 16 hours at 7-Eleven without a break. He was robbed twice in the space of 18 hours by a man in a balaclava, brandishing a long serrated knife; he was scolded by his employer for not fighting the robber—not fighting back to stop the robber from taking $180; he was paid somewhere between $10 an hour at one store and $14 an hour at another store; he had to do the job of two people; and, often, if someone drove off without paying for their petrol he basically had to foot the bill for the lost petrol costs. Of course, all of those things—the long hours he worked and the conditions in which he worked—also put him in breach of the visa conditions that he was in Australia under. He was an overseas student. As The Sydney Morning Herald, which I just quoted from, pointed out, this arrangement, which was known as a 'half-pay' scam, put Mr Pendem in breach of his own visa conditions.

The half-pay scammers know that students can work up to 20 hours on their visas. What was going on here, apparently—according to these reports—was that people worked twice as many hours at effectively the same rate, which made it half the pay. It would appear as if they were working 20 hours on the book but in actual fact they were sometimes working double that. A 7-Eleven insider was quoted as saying:

They can’t run 7-Eleven as profitably as successfully as they have without letting this happen, … but the reality is it’s built on something not much different from slavery

So, according to the ABC and Fairfax Media, that is the model on which, 7-Eleven are operating at the moment. I notice that they now have Mr Allan Fels undertaking investigations to clean up some of those issues that have occurred in their stores. But you would have to say that if a franchise model is built on these sorts of scams then that should attract the attention of the government.

But what have we seen from this government? We have seen no leadership, no press releases, no task force, no new laws, no new action and no urgency. They have been content to let departmental spokespeople talk about proposing amnesties. But we have not seen one iota of action from this government. It would seem that they are happy to allow this to occur—this stain on our nation's character. And we cannot be the country of a 'fair go' if we are allowing modern-day serfdom and modern-day slavery to be undertaken by people who are little more than guest workers. They are here on student visas, or backpacker visas or some other visa category, but more often than not they are here to work. And more often than not their employer is hanging that visa over their heads as a method to get leverage, to underpay them and to have them fulfil conditions that we do not think are right. So the government has to act on these matters.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I find that it is a rare occurrence when I actually have some partial agreement with the member for Wakefield. It is in the sentiment of his motion, but not actually in the sentiment of his language used during his speech.

It is true that this has been a scandal involving 7-Eleven. But the facts are that in this country we can never forget that the vast majority of employers do the right thing by their employees. We know that all visa holders in this country must be employed in line with Australian pay, conditions and workplace entitlements under the Fair Work Act. All employers are legally required to remunerate and to meet the work rights of all their employees, including foreign visa holders, in accordance with workplace law.

If you listened to the speech by the member for Wakefield, you would think that nothing is being done about this. It is far to the contrary. In fact, in June 2014 the Fair Work Ombudsman commenced a long-term inquiry into the systematic workplace issues at 7-Eleven franchises. The Fair Work Ombudsman conducted an education and audit campaign of several 7-Eleven franchises in metropolitan Melbourne and Geelong in 2009-10. In February 2015 the Fair Work Ombudsman commenced proceedings in the Federal Court. In June 2015 the Fair Work Ombudsman filed court proceedings against the operators of a 7-Eleven store in Blacktown. So for the member of Wakefield to say that nothing has been done is completely incorrect.

Yes, we have to look after the workers, but we also have to look after the franchisees, those small business operators. The real problem, the root cause of this evil, is the franchise agreements between the franchisor and the franchisee. We have seen the attitude of the Labor Party to this. We have seen the current leader of the Labor Party's attitude with the hot pie scandal where he actually went into a 7-Eleven store and abused the worker. That is the attitude of the Labor Party.

When it came to looking after the interests of small businesses, we saw that during their term of government no less than five separate small business ministers—a rotisserie of changing small business ministers. Most of all, this issue gets down to unfair contract terms. I quote from an article by Robert Gottliebsen about this issue. He said:

… then the standard contracts put out by Wilmot's—

which is Warren Wilmot, the former chief executive—

7-Eleven might be one of those declared unfair because they made it impossible for many franchisees to make a profit without using low-cost labour.

Indeed that’s exactly what former ACCC chief Allan Fels concluded on the program. Fels is now heading the 7-Eleven inquiry into its contracts. The Allan Fels I have known for a long time will honour his word and recommend changes to make 7-Eleven contracts fair—exactly what would have been required under the … “fair contracts” promise …

I remember the Labor Party back in 2007 when they were first elected. They had promised to extend the unfair contract provisions from consumers to small business but when they came to government they buckled, they took their orders from the Franchise Council of Australia and they refused to introduce that legislation to extend to small businesses protection from unfair contract terms. We in the coalition have taken that step that the Labor Party refused to do to protect small businesses from unfair contract terms. It may well be said that the $100,000 cap that we have placed on those contacts is not high enough and could exclude some—and there is some truth there—but we have at least taken the first step—something the Labor Party refused to do when they were in government.

Of course, the other issue is the statutory term of 'good faith' that we in the coalition have put into the franchise contracts. Again there were complaints from the Franchise Council and the opposition. I have great concern about the issue of franchisee churn, which is where one franchisee leaves and gets replaced by another franchisee. We need to address this for the future. A report in TheSydney Morning Heraldsays that 68 franchisees left the 7-Eleven system in the 12 months to June 2015. That is 68 franchisees that have closed down and gone out of business in 12 months. This is something that must be in the Franchising Code of Conduct; this is something that must be disclosed. Someone going into one of these contracts should know that there has been that significant churn through the franchise system.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

The member for Hughes, the previous speaker, failed to actually speak to what is in this motion. It speaks quite specifically about what is going on in the poultry food-processing industry here in Australia. It talks about the work that the Fair Work Ombudsman has done to expose the abuse and exploitation of people who are here on temporary work visas, whether it be the 417 visa or the 457 visa, working for Baiada Poultry Pty Ltd. Unfortunately, what happened at Baiada is not a stand-alone case within the poultry industry. This particular case exposes the failure of this business and other businesses in the poultry industry to clean up their act.

The government must act—it must step in and get this company and other companies to start treating their workers properly—and implement the recommendations that the Fair Work Ombudsman has made. There are quite serious issues that the Fair Work Ombudsman has exposed in this particular case. Not only did it find that the company was refusing to pay people properly but it also exposed the hideous nature of the sham contracting arrangements, where one company subcontracts to another company that subcontracts to another company that then may employ people specifically. This issue that we have before us today demonstrates quite clearly that we have a problem within the temporary work visa program, whether it be at Baiada or 7-Eleven.

We are now hearing reports of problems with the temporary visa program. People who come here and work, whether they be international students, 457 visa holders or 417 visa holders, must be ensured that there are safeguards to protect their rights at work. We have seen time and time again problems in this system, yet the government is failing to implement the recommendations being made by the Fair Work Ombudsman to ensure these temporary work visa holders do, in fact, have Australian wages and conditions. This government has weakened the safeguards that were in place, by what they call streamlining, or removed, through their red tape repeal days, some of the safeguards that were in place to ensure that these workers had proper protection.

To unpack what is going on in Australian workplaces is complex, I acknowledge that, but it is up to the government to ensure the recommendations that have been put forward by the Fair Work Ombudsman are being adopted by the companies that they recommended do so. In my previous role I did quite a bit of work with international students. When they first come to Australia international students do not know what their rights are in regard to work. They can take on positions. And it is not until they meet a union official or they meet a union member or they meet someone—an Australian worker—who says, 'Hey, what are you getting paid? What is actually going on?' do they then learn the truth of how much they are being underpaid. And that is exactly what happened with the 7-Eleven situation that we are talking about today. 7-Eleven, Baiada, what we find is it is not until people are aware of their rights that they then raise the issues that are now being investigated by the Fair Work Ombudsman.

Within this country, we need to ensure that we have proper safeguards in place. We need to ensure that whether you are here as a guest temporary worker or you an Australian citizen worker that you have the same workplace wages and conditions. But what we see time and time again through the work of the Fair Work Ombudsman is that there are a number of people working here in this country that do not have access to those rights. We need to ensure that this government gets serious about ensuring that people working here have the same rights and conditions. Further, whether it be at Baiada, which was one of the issues exposed, whether it be at 7-Eleven, whether it be at KR Castlemaine, which is in my electorate, that those positions are being offered to locals first. We know that Australians will not accept half pay. We know that Australians will not accept being exploited in this way. They also do not expect people who are here guest workers being exploited in this way. I support this motion and call on all of those in this House to support this motion.

Ken Wyatt (Hasluck, Liberal Party) Share this | Link to this | Hansard source

The Four Corners journalist Adele Ferguson's investigation into the 7-Eleven business empire exposed revelations of dodgy bookkeeping, blackmail and the mass underpayment of its workforce, and that exposure showed that this has been a continuing practice for some time and it was also a practice under the previous Labor government. The allegations made in the Four Corners program are concerning. While the majority of employers do the right thing and treat their workers with the decency they deserve, we have a responsibility to ensure we are doing all we can to address the instances where workers' rights are being compromised, which is why the government continues to undertake targeted compliance activities across several departments.

Exploitation of workers in Australia, whether domestic or foreign, is unlawful and any employer engaging or paying workers below those conditions are breaking the law. All visa holders must be employed in line with Australian pay, conditions and workplace entitlements under the Fair Work Act. All employers, as we know, are legally required to treat and remunerate all of their employees, including foreign visa holders, with work rights in accordance with Australian workplace law.

Both the Department of Immigration and the Fair Work Ombudsman are active in ongoing compliance campaigns to ensure that visa holders are being paid in accordance with Australian pay and conditions. I find the member for Bendigo's comments interesting because Fair Work was established under the Gillard-Rudd government and therefore, on that basis, I would have expected them to have been very active in addressing this issues within that period. In hindsight, it is always easy to criticise. Governments have enduring departments that undertake this work so when information is exposed, the department then follows through.

Mr Champion interjecting—

It is interesting, member for Wakefield, that you were in government for six years. Why did you not address this then? This is not just now; it did happen. The Four Corners expose implied greater than what you are saying. The government actively encourages overseas workers who have concerns that their workplace rights are being compromised to contact the Fair Work Ombudsman on 131 394 or the Department of Immigration and Border Protection. The Fair Work website has material translated in 27 languages and includes fact sheets.

In June 2014, the Fair Work Ombudsman commenced a long-term inquiry into systemic workplace issues at 7-Eleven franchises. As part of this inquiry, the Fair Work Ombudsman made unannounced site visits at 20 7-Eleven stores across Melbourne, Sydney and Brisbane on 13 September 2014. These site visits identified contraventions in a majority of stores. This inquiry remains ongoing.

In January 2010, the Fair Work Ombudsman commenced legal proceedings against a company operating 7-Eleven stores in Geelong and South Yarra in Victoria and against two individuals responsible for setting and adjusting the employees' pay rates, resulting in a court compensation order of almost $90,000 and a penalty of $150,000. A total of $30,000 in penalties recovered from the individuals was paid to the employees. The Fair Work Ombudsman later wound up the company.

I want to go to a couple of comments that reflect this issue in the long-term context. When you consider the coalition's record compared to Labor, Labor cut staff funding at the Fair Work Ombudsman from 900 in 2009-10 to 723 in 2013 when the then minister, Bill Shorten, stopped being the responsible minister. When you cut then you leave an agency exposed in the work covered, member for Wakefield. Bill Shorten had the power to take action when he was minister and he did nothing. Brendan O'Connor had the power to take action when he was immigration minister but the evidence shows that he did nothing.

Labour hire companies, like all Australian employers, are legally required to treat and remunerate all of their employees, including foreign visa holders, with work rights in accordance with Australian law. I hope that we do not see a continuance of this in the future and that those who break the law face the consequences of the penalties that are applied. I would encourage those who have visas that work in conditions where the salaries are not commensurate to certainly expose that to the relevant agencies.

Debate adjourned.