Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Hansard source

Is it any wonder that this bill proposed by Minister Cash is so deficient? Her former colleague, Bruce Billson, was trousering money from the Franchise Council of Australia while he was still a member of parliament. The former coalition small business minister is the principal business lobbyist opposing the bill, using all of his experience, contacts and influence to diminish the effectiveness of this bill. Billson has asserted that he regularly updated his interests and his declarations. However, despite being in this highly compromising position, he somehow failed to disclose his position or salary at that time. It absolutely stinks. It's as rotten as it gets. Questions surrounding the influence Mr Billson had on the Turnbull government's vulnerable workers legislation abound. The Franchising Council of Australia is a powerful business lobbyist that wants the bill killed. Senator Cash and Mr Billson need to explain what conversations they or any of their staff had in relation to this bill. Mr Billson needs to explain what discussions he had with colleagues while in the parliament regarding underpayment and exploitation by franchisees. Mr Billson needs to outline what pressure he put on the Minister for Employment, Senator Cash.

The vulnerable workers legislation is weak and utterly deficient. It will not effectively hold to account businesses that are doing the wrong thing. Revelations about Bruce Billson's compromised position as head of the Franchising Council of Australia reveal why. Perhaps the government could turn its attention away from relentless ideological attacks on unions and instead canvass Mr Billson's suspicious position and dealings with the government regarding this deficient bill.

Despite the 7-Eleven scandal coming to light more than two years ago, the government delayed this bill. While there are a number of serious questions surrounding Mr Billson's compromised and covert conduct, and his influence over the bill, what remains crystal clear is that the Turnbull government doesn't take examples of systemic worker exploitation seriously. It pays lip service to the exploitation of workers, while turning all of its resources against working people and their unions.

The Fair Work Amendment (Protecting Vulnerable Workers) Bill amends the Fair Work Act to increase penalties for what are described as 'serious contraventions'—conduct which is deliberate and a part of a systemic pattern of conduct by one or more persons relating to contraventions of prescribed workplace laws. I note at this point that the increase in penalties falls short of what Labor committed to at the last election. There are increased penalties for employer record-keeping failures. The bill makes franchisors and holding companies responsible for underpayments by their franchisees or subsidiaries where they knew, or ought reasonably to have known, of the contraventions and failed to take reasonable steps to prevent them. The new responsibilities will only apply where franchisors and holding companies have a significant degree of influence or control over their business networks, and the franchisor or holding company may raise a defence of taking reasonable steps to prevent a contravention. The bill expressly prohibits employers from unreasonably requiring their employees to make payments—that is, demanding that a proportion of their wages be paid back in cash. It gives the Ombudsman and employees at SES level the power to compulsorily question persons as part of an investigation into breaches of the Fair Work Act.

The bill falls significantly short of the suite of legislative measures required to properly address the breadth of worker exploitation we have seen occurring far too frequently across the country. For example, it does nothing in relation to stopping sham contracting or phoenixing to avoid wage liabilities. It doesn't reform the Fair Work Act to strengthen protections for workers who want to exercise their workplace rights—for example, querying whether they are an employee and not an independent contractor. It doesn't make it easier for workers to recover unpaid wages, or strengthen protections for foreign workers who are exploited because of their immigration status. It doesn't address the proliferation of dodgy labour hire companies. Labor moved a private member's bill back in March 2016 and have policies which do address all of these issues. Yet the government haven't done anything at all on these matters. They like to pretend that they want to protect workers, but they don't.

This bill purports to make franchisors and holding companies responsible for underpayments by franchisees or subsidiaries. This is aimed at responding to the 7-Eleven scandal, but there are flaws with the new civil liability offence in this bill, which shows that the government's response is weak. The government's offence will not reverse the onus of proof, which means that it will remain very hard for workers and the Fair Work Ombudsman to successfully prosecute franchisors. Many large businesses do not use a franchise model and will therefore not be liable, and businesses that use a franchise model are likely to move out of that model or design their business relationships in order to escape prospective liability under the offence. Labor's amendments address all of these flaws. They are essential to giving this bill real teeth. The government must support them if it truly wants to stamp out underpayments across our economy.

The second area is the proper use of coercive powers for investigations into exploitation of vulnerable workers. Labor has led the government every step of the way in proposing measures to protect vulnerable workers. Labor wants the Fair Work Ombudsman to have all necessary powers to pursue unscrupulous employers who exploit their workforce. There is a clear need for the ombudsman to have the ability to use coercive questioning powers when investigating employers who underpay their workers, but, as with any coercive powers, they must be subject to an appropriate oversight and used sparingly. Labor's amendments are entirely consistent with the purpose of the new powers and with the government's stated reason for introducing them.

As drafted, the bill provides for the Fair Work Ombudsman's coercive questioning powers to be exercised in relation to any Fair Work Ombudsman investigation, which includes investigations into industrial action taken by workers and their unions. In contrast, the explanatory memorandum more narrowly describes the purpose of the coercive powers as 'strengthening the evidence-gathering powers of the Fair Work Ombudsman to ensure that the exploitation of vulnerable workers can be effectively investigated'. It's about investigating employers. The government's public statements have described the bill as introducing better investigatory powers relating to the exploitation of vulnerable workers. So both the explanatory memorandum and the government's public statements say the bill is for this purpose, but the bill is actually using a wider range of powers for wider purposes than the government has made public. There is no evidence that these new coercive powers are legitimately needed for any purpose other than gathering evidence against exploitative employers.

The ombudsman's evidence before the Senate employment committee focused on strengthening her power to conduct investigations into systemic underpayments. She specifically used 7-Eleven as an example of where the absence of coercive powers restricted her ability to properly investigate. Further, in her submission to the Senate employment committee, the Fair Work Ombudsman specifically linked these coercive questioning powers to investigations of new provisions in the bill.

There is, however, strength to the concern that, with coercive questioning powers in its arsenal, this government would direct the Fair Work Ombudsman to put more of its resources into investigating union activities. This is the lived experience with the ABCC and the ROC. The Prime Minister and Senator Abetz directed Fair Work Building and Construction on 12 November 2013 to transfer wage compliance functions to the Fair Work Ombudsman, despite legislation requiring Fair Work Building and Construction to deal with wage compliance. So there you have it, how this government operates; it doesn't care about workers being exploited. This bill will not resolve the problems. The then Prime Minister, Tony Abbott, and the then minister, Senator Abetz, directed the Fair Work Building and Construction not to pursue breaches of legislation against employees. That wasn't their job, according to the two ideologues and extremists when it comes to the trade union movement.

We need to limit the use of proposed coercive powers to investigations into underpayment of wages and allowances. Our position is consistent: coercive powers should be used sparingly, and only where justified. If the government does not support Labor's amendments to put in AAT oversight and require the ombudsman to only use their coercive powers for investigations into the exploitation of vulnerable workers, then they will be exposed. They will be exposed in their pretence that they care about workers in this country. They will be exposed in their attempt to have yet another agency prosecute the government's ideological crusade against working people and their unions.

This case study, taken from the Fair Work Ombudsman's submission to the Senate employment committee inquiry into this legislation, shows why Labor's amendment, extending liability to where companies use labour hire and along the supply chain, is necessary. It's also an example of the type of investigation the Fair Work Ombudsman needs coercive questioning powers for—that is, an investigation into the exploitation of workers. They said:

Over a number of years the [Fair Work Ombudsman] received intelligence that site managers employed by Baiada were actively involved in employing migrants to work excessively long hours, paying them below minimum entitlement rates in cash, and threatening workers with termination when they complained.

The Baiada Inquiry was principally concerned with identifying the nature and terms of labour procurement through the Baiada Group’s contracting networks. Understanding in detail the characteristics of the labour arrangements was critical to identifying whether the arrangements comply with the [Fair Work] Act and who may be responsible for non-compliance with workplace laws.

The [Fair Work Ombudsman] found that principal contractors in the labour supply chain were related to the directors of Baiada and were using the supply chain to avoid regulatory obligations. False records had been created and produced by the contractors in response to a [notice to produce] issued by the [Fair Work Ombudsman], and little significant or meaningful documentation was provided regarding the nature and terms of its contracting arrangements. Baiada also denied inspectors access to its three sites in [New South Wales] during the course of the Inquiry which prevented inspectors an opportunity to observe work practices or to talk to workers about work conditions, policies and procedures.

The lack of cooperation from the Baiada Group, including failure to provide accurate contact details for contractors, lengthy delays in providing requested records and not consenting to Fair Work inspectors entering worksites, along with the failure of contractors to update business registration records in contravention of the Corporations Act 2001, presented challenges in contacting directors and serving notices issued by the Fair Work inspectors under the [Fair Work] Act.

Due to the negligible records produced and the [Fair Work Ombudsman's] reliance on voluntary participation in interviews, the [Fair Work Ombudsman] was unable to effectively account for the hundreds of thousands of dollars that moved down the supply chain, conduct proper interviews with employees or compel those with information to speak with inspectors.

Despite volumes of intelligence received by the [Fair Work Ombudsman] regarding Baiada's alleged involvement, no evidence sufficient to put before the court was recovered, due to the limitations on the [Fair Work Ombudsman's] investigative powers.

That's what the Fair Work Ombudsman said.

Now, I am clearly of the view that if you really want to deal with exploitation against working people, then the situation at Baiada needs to be dealt with. This legislation does not cover that range of circumstances and will not allow the Fair Work Ombudsman to deal with it effectively. It's concentrating on the franchising area, and I would appeal to Senator Xenophon and his team to stop being a rubber stamp on this government's attacks on workers' rights and support Labor's amendments. That's what will protect workers: our amendments as they are on this bill before parliament.