Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to 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.

James Paterson (Victoria, Liberal Party) Share this | Link to this | Hansard source

I am pleased to have the opportunity to rise tonight to contribute to this debate on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, although I must say that I am sad that it comes at the expense of watching what I understand is a fascinating episode of the Four Corners program tonight on the Greens political party. But I will look forward to downloading it later on iview and enjoying it in its full glory.

Before I turn to the main part of the bill tonight, I want to take the opportunity to respond to some of the observations that Senator Cameron made in his speech on the bill just then. I particularly want to focus on what I regard as his unfair and inappropriate attack on the character of Bruce Billson, the former minister and member in the other place, and also his implied criticism of the character of Senator Cash, the minister responsible for this legislation. It was a highly personal attack that made what I regard as very serious allegations and implications of corruption. I think he did even use the word 'corrupt' once in his speech. He certainly alleged that Mr Billson's advocacy on this bill was covert in some way, which I think is not supported by the facts.

It is certainly true that Mr Billson failed in his obligation to update his register of interests appropriately when he was a member of parliament. I take my own register of interests very seriously, as all senators and members should, and Mr Billson has apologised for what was an oversight, as he should. It's not acceptable to fail to update your register of interests. But to suggest that Mr Billson's appointment to the Franchise Council of Australia was in some way a secret flies in the face of the fact that a press release was issued, announcing his appointment to the Franchise Council of Australia. No-one was in any doubt about Mr Billson's involvement or interest in this matter, either in his final few months as a member of parliament before he retired or subsequently after his retirement from parliament and beginning his advocacy on behalf of the Franchise Council.

It was even less reasonable and even more unfair for Senator Cameron to go on to imply that Mr Billson had somehow had undue influence over the minister in the drafting of these laws. Senator Cameron has obviously missed the very strong criticism that the Franchise Council has made of the proposed laws—the very strong disappointment in these laws that the Franchise Council, along with some other business organisations, has made. There is no evidence in any way, shape or form that the minister was inappropriately or unduly influenced by the advocacy of Mr Billson. Of course, it is completely fair and appropriate for franchises or any other community organisations or business associations to have their views represented in public debate and to make the case for their point of view on the legislation, and for government to consider their point of view and, where appropriate and where the government agrees, to incorporate their point of view into the subsequent legislation. So I just want to underline what I thought was a very unfair and unjust personal attack on the minister and Mr Billson.

Senator Cameron also lamented that this bill does not reverse the onus of proof, as if that were a negative thing. I could not disagree more strongly. It is a foundational principle of the rule of law that one is innocent until proven guilty and not otherwise. As far as possible, and as often as we can, I think that principle should be upheld. If it is ever to be abridged in legislation I think it should require a very great and extraordinary justification, because it is an abrogation of the rule of law. My former employer, the Institute of Public Affairs, publishes a regular survey on the number of instances that this legal right has been overturned in the past by legislation, and it is a troublingly large number of occasions. I particularly point out that it is most often reversed in the context of workplace relations, and very often, within that context, is aimed—not exclusively, but predominantly—at employers, and I think that that is something which, as far as possible, we should strive not to do.

Turning now to the substance of the bill before us: this is yet more evidence that the Turnbull government takes very seriously the issue of exploitation of workers. Anybody who has read about or heard of or is aware of the exploitation of workers at a number of franchises—including 7-Eleven, most spectacularly, but also Muffin Break, Gloria Jean's, Subway, Caltex, Domino's and Pizza Hut—would agree that the laws which currently regulate this issue are inadequate and that they do not give sufficient capacity to the Fair Work Ombudsman, among others, to address this issue.

One thing was missing from Senator Cameron's speech—unless he made the point in his initial remarks that he was continuing tonight and I missed it, and I apologise if I have. But one thing that I didn't hear in his speech was the fact that of course this government is amending the previous government's Fair Work Act. These breaches have occurred under laws not drafted by this government; in fact, the laws were drafted over the objections of the party of which I'm a member. The laws were drafted by the former Labor government. They passed during the Rudd prime ministerial years, and were authored, I understand, by former Prime Minister Julia Gillard. It is under those laws that these contraventions have taken place. Laws that were authored for Labor, and with the benefit of union assistance, have allowed these breaches to take place. So for some unions and for some Labor senators—as they have in this debate—to imply that the failure of these laws, which has occurred on our watch, is in some way the coalition's fault rather than their own, given that it was they who authored the laws, I think is a great stretch and discredits them. They would do much better to admit that the laws which they drafted were inadequate, that the powers that they gave their Fair Work Ombudsman were insufficient, that these breaches have occurred due to their laws and not anyone else's, and that this government is taking the right and appropriate steps to address their failure to draft appropriate laws to prevent these instances of abuse of workers taking place.

Workers are of course the primary victims of underpayment, and perhaps the most sympathetic victims. They deserve redress. But of course they are not the only victims. Law-abiding businesses that pay their workers a fair and appropriate rate of pay are also victims, because they have to compete against businesses that are not complying with the law and are evading their legal responsibilities, and that makes it harder for those law-abiding businesses to exist and to thrive. This bill addresses not just those abuses of workers but the associated abuse of law-abiding businesses, and I think that is one of the reasons why the bill deserves strong support.

Of course taxpayers, in a sense, are also victims of this law. When workers are underpaid, they clearly won't be paying their full rate of tax, and that is an unjust and unfair thing for all of us to bear as a community. So there are many reasons why this issue needs to be addressed, and there are many reasons why the Turnbull government is taking action to address what is an abuse of power—as we have demonstrated we are willing to do. Whether it is union bosses or employers or anyone else intimidating people and failing to comply with the law, we will take action to address those contraventions.

There are a number of key elements of this bill—in particular, the increase in the number of penalties for serious contraventions of the payment related protections in the Fair Work Act. This applies particularly when those contraventions are systematic and deliberate. This is not intending to target accidental or inadvertent contraventions. But systematic and deliberate contraventions do deserve substantially increased penalties, and there will be a tenfold increase in those penalties.

Importantly, the bill will also target and increase penalties for record-keeping failures—failures to keep appropriate records. It is not sufficient for an employer who may not have been paying their employees the correct rates of pay to plead ignorance, or to plead that they have insufficient records and that they are unable to go back and check whether their workers were paid the right amount. It is a fair and reasonable thing to ensure that employers are keeping adequate and up-to-date records of their payments to their employees, so that, if allegations of systemic underpayment are raised in the future, those allegations can be appropriately investigated and acted upon.

This bill will also outlaw the practice of cash-back and other coercive behaviour by employers, where employees may, in essence, be paid correctly but, in reality, not be paid correctly because they are forced by their employer to repay part of their wages. It seemed to me a fairly extraordinary thing that this practice was not already unlawful, but this government is addressing this issue to ensure that it is unlawful. The bill will hold franchisors and holding companies responsible for underpayments where they should have known about them but failed to take reasonable steps to prevent them.

The bill strengthens the investigation of underpayments by giving the Fair Work Ombudsman effective evidence-gathering powers on par with ASIC and the ACCC and by outlawing the provision of false and misleading information or hindering and obstructing inspectors who carry out investigations into compliance with the Fair Work Act. It builds on a record of action by the Turnbull government to address these issues to protect other vulnerable workers, including the establishment of the Migrant Workers' Taskforce. It will boost funding to the Fair Work Ombudsman by $20 million to ensure that the regulator has the resources to investigate and prosecute employers who exploit workers.

The government established Taskforce Cadena in June 2015—a joint task force between Border Force and the Fair Work Ombudsman—to target and disrupt criminals who are organising visa fraud, illegal work, and the exploitation of foreign workers. The Senate Standing Committee on Education and Employment heard particularly disturbing evidence about these practices, and that's why the Turnbull government has taken action to address that. A valid pay slip, as a proof of paid work, will be required before a second working holiday visa will be granted to a temporary migrant worker. The bill outlaws the payments to sponsors of foreign workers through making it a criminal offence for employers and visa applicants to solicit and receive a payment in return for visa sponsorship. Finally, funding will be provided to enforcement bodies to ensure employers comply with obligations as sponsors of skilled visa holders.

I'm a member of the Senate Standing Committee on Education and Employment, and the committee has produced a very comprehensive and, I think, helpful report into this bill. I mention that not in any way to take credit for Senator McKenzie's excellent work as chair. As is always the case, she deserves the lion's share of the credit for a comprehensive report and for what, I thought, were some very reasonable and sensible recommendations as to how the bill could be improved to ensure that the words of the bill reflect the intention of the bill. The committee made a range of recommendations including that the government should consider amending the bill to ensure that the conduct which is being caught is the exact conduct which is intended to be caught and no greater. It does not impose unreasonable or unfair burdens on franchisors where they have a less direct relationship or less direct oversight over their franchisees.

I understand that there will be a number of amendments proposed, particularly by crossbench senators, which are in part inspired by the recommendations of the committee, that will seek to give effect to the committee's recommendations. I look forward to hearing about those amendments later on during the debate.

I'd just now like to turn briefly to some of the stories of exploitation that we've heard so far that have led the government to take this action to address this issue. I should, in particular, pay tribute to the journalists who have done an excellent job in uncovering, exposing and demonstrating the systemic nature of these underpayments. Particularly, I should note Adele Ferguson of the Fairfax papers, who has worked very hard to identify, expose, document and catalogue these abuses. It shows the very important role that investigative journalists play as part of a civil society. We cannot rely on government alone or, indeed, any other community organisation to ensure that laws are enforced and adhered to. A powerful fourth estate, if it fulfils its role, can contribute to that very successfully.

Ms Ferguson in conjunction with Mario Christodoulou exposed in a very powerful way in the Sydney Morning Herald recently, in particular detail, the systemic way in which Domino's Pizza underpaid and exploited its workers. No-one could think, having read this report, that these were accidental oversights, which I accept absolutely do occur, because complying with our industrial relations system is not a straightforward thing, particularly for small business. But for a large business or large franchise, such as Domino's, there is no excuse for not complying with the law, and exposing it being done on such a systemic basis was a great service by Ms Ferguson.

A recent report, again in The Sydney Morning Herald, by Anna Patty, catalogued just how extensive we now know the underpayment to be at 7-Eleven, in particular, noting that the compensation bill for 7-Eleven workers had climbed over $110 million. That is an extraordinary amount, which averages about $39,000 for each of the 2,832 claims made by workers who say they were underpaid. To have underpayment with that number of workers and on that scale is unconscionable and supports the action the government is taking to fix this law.

I look forward to hearing the contributions of other senators in this debate. I believe the government has struck the right balance in addressing what is clearly a demonstrated issue of concern to the community and to workers but also doing so in a way that is precise and targeted, addresses the issue at hand, and does not stray into wider issues or have unintended and inadvertent effects. So I commend the bill to the Senate.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

I rise to speak on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. I welcome the opportunity to speak on this bill, because the protection of vulnerable workers is something that we have been calling on this government to do for years and years. Under this government's watch, there are still scores and scores of examples of workers being exploited by their employers. There've been many high-profile cases, and we've seen in the media reports on cases like 7-Eleven and Pizza Hut happening right under the noses of those opposite.

Who would have thought that we would still be here telling these tales in 2017? What has the government been doing about it? Basically, very, very little. More than a year ago, with much fanfare, the government announced it would take action to crack down on workers' exploitation. But, despite multiple promises to deal with this urgent legislation, the Turnbull government have dithered and delayed, proving their callous disregard for workers who have been exploited.

This bill goes some way to deal with some of the exploitation issues concerning vulnerable workers across the country, but it falls significantly short. I will get to this in a moment. We know those opposite do not take workers' exploitation seriously, which is why Labor has put forward amendments to address the deficiencies with this bill.

I'll touch briefly on what this bill does. It amends the Fair Work Act to increase penalties for serious contraventions of prescribed workplace laws, increase penalties for employer record-keeping failures, and make franchisors and holding companies responsible for underpayments by their franchisees or subsidiaries in instances where they knew, or ought to have known, and failed to take reasonable steps to prevent them—a measure that falls short. This bill also seeks to prohibit employers from demanding that a proportion of employees' wage be paid back in cash. Finally, this bill seeks to give the Fair Work Ombudsman and employees at the SES level the power to compulsorily question persons as part of their investigation into breaches of the Fair Work Act.

As I just said, this is a start, but it isn't enough. It's good to have the chance to speak on this bill tonight, because protecting workers' rights, and the government's failure to act on workers' rights, is something Labor has strongly campaigned on for a long time. The reality is that Labor has led the government every step of the way in proposing measures that will actually protect vulnerable workers. Those opposite have had to be dragged to the table to bring forward any measures to address exploitation of vulnerable workers. This legislation has been a long time coming, but unfortunately what we have before us tonight is a bill that falls short of what is actually needed. It doesn't go anywhere near far enough. The measures in this bill don't go far enough to address the extent of workers' exploitation, and we have seen, really, some terrible examples of shameful abuse of workers under this Liberal government. The bill falls short of Labor's suite of policies and legislative reforms that we announced 12 months ago, well before this out-of-touch Liberal government even thought about protecting workers. The bill as it stands doesn't even come close to the policies Labor took to the federal election last year to combat sham contractors, license labour hire companies, reform the Fair Work Act to strengthen protections for workers, and criminalise employer conduct that involves the use of coercion or threats.

The other serious shortfall of the government's bill, which really highlights their inability to address the issue of worker exploitation, is their refusal to protect penalty rates. There is absolutely nothing in this legislation for those who rely on penalty rates, who are some of the lowest-paid and most vulnerable workers in Australia. But is this really such a surprise? I don't think so. This is a Prime Minister who has thrown his support behind cuts to penalty rates at every opportunity. He owns the decision to cut penalty rates.

You have to wonder whether the Turnbull Liberal government actually cares about protecting workers at all. Instead of trying to defend everyday workers from having their wages cut, they want to give a $50 billion tax cut to big business and the banks. If this out-of-touch government really cared about protecting workers, 700,000 Australians, including 40,000 Tasmanians, would not have lost their penalty rates last month. If those opposite really cared about vulnerable workers, the threat of penalty rate cuts extending to other industries and other low-paid workers would not exist. If this government really cared about vulnerable workers, the Minister for Women, Michaelia Cash, wouldn't have thrown her full support behind the cuts to penalty rates, which will disproportionately impact on women. How out of touch can you get? Are you not moving around your electorate? Do you not listen to people to see how far the inequality in this country has actually gone? This government just doesn't get it, and I'm not sure they ever will.

During question time on 30 March this year the Prime Minister said, 'Everything we're doing is creating jobs.' I'm not sure whether he was being sarcastic or is just living in a different country, because in the last 12 months there's been more than 700,000 Australians having to hold down a second job in order to make ends meet. This is an increase of 9.2 per cent over the past six years. Employment growth has halved and remains well below trend. Full-time jobs have declined, with job creation dominated by part-time work. Underemployment is at a record high. More than 1.1 million Australians want more work but can't find it. Wage growth has fallen to new record lows. Inequality is at a 75-year high. And apprentice numbers are still spiralling downwards. There are now only 265,000 apprentices in training compared to 413,400 in September 2013.

In a media release on 1 August, Minister Cash said, 'The Turnbull government is getting on with the job of helping more young Australians into work.' Well, you aren't pulling the wool over the eyes of our minister. I mean, all you have to do is go to regional areas around this country, go to our home state of Tasmania, to know the reality about the high level of unemployment among our youth. Under this Liberal government, the economy is not working as it should. It's not working in the interests of everyday working Australians. Too many people are working harder for less. Too many people are living from pay cheque to pay cheque. Too many people have less money in their pay packet and less security in their job. Too many people are underpaid, under-represented and, in many cases, frightened of complaining. The digital divide, all the barriers to quality education, rising house prices, escalating energy prices, older workers being displaced—the list goes on and on.

But despite all of this the Prime Minister does nothing, because he leads a government which cares more about protecting the privileges of the top end of town than it does about making life easier for everyday Australians. And we've seen today in that other place that the Prime Minister's only motivation in relation to jobs is to protect his Deputy Prime Minister, Barnaby Joyce, to protect his own job. Any other Prime Minister would have asked their Deputy Prime Minister to step aside. That's what a leader would have done; that's what a strong leader would do.

So it doesn't matter how many times the Prime Minister tries to tell us that he's a strong leader. He's not strong at all. Perhaps he should keep telling himself—perhaps he should stand in front of the mirror and tell himself, 'I am a strong leader, I am a strong leader.' The Deputy Prime Minister, Mr Barnaby Joyce: if he were the calibre of a good man, he would stand aside. He would stand aside until the issue is resolved by the High Court. But the dysfunction and the chaos within this government just rolls on and on. Really, it's like a bad soap opera; it just gets worse and worse. The characters aren't even good characters!

The Prime Minister takes every opportunity to tell Australians that he's delivering and that he's keeping his promises, but all he's achieving is absolutely nothing. The Australian community see right through him. They see the dysfunction; they see the chaos in this government. When the Deputy Prime Minister has called into question whether or not he is eligible to sit in the House of Representatives and he continues to sit there and continues to vote, then that says so much about the character, the honesty and the integrity of this government.

But tonight Labor has been and will be putting forward some relevant amendments that will try to make the most out of this bill. If you look at the facts and the figures, the Prime Minister is taking Australians nowhere, and it’s the people he's supposed to represent who have to live with the consequences of a chaotic and dysfunctional government. What is crystal clear is that the Turnbull government doesn't take workers' exploitation seriously. This government isn't interested in the wellbeing or the safety of workers; it's interested only in quick political wins.

I'm glad we're finally dealing with this bill tonight, because Labor has fairness and workers' rights at the core of our mission. It's part of our social fabric and it's part of Labor's DNA, which is in stark contrast to those on the opposite side of the chamber. We know that if the government were serious about tackling the horrendous examples of workers' exploitation then they would have taken action before the winter break like they said they would. What they have proposed in this bill is inadequate. There's a lot more work to be done, which is why Labor is moving amendments to properly address workers' exploitation. So I urge those on the other side of the chamber and on the crossbench to support our amendments.

We on this side of the chamber will continue to fight to protect vulnerable workers. We will put their interests ahead of ours—unlike the Prime Minister, who only puts his own job and the job of the Deputy Prime Minister, Barnaby Joyce, before Australian workers.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I just had to leave my office to come into the chamber to speak on this very important piece of legislation, the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. It was disappointing, actually, to leave the television, where I was watching Four Corners

James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

Tell us more re: Four Corners!

John Williams (NSW, National Party) Share this | Link to this | Hansard source

It was former Senators Bob Brown and Christine Milne and state MLCs in NSW and the Greens smashing Senator Rhiannon something terrible. But anyway, I've come in here on a more important issue only to find Senator Polley saying some crazy things over there, talking about penalty rates.

It was the Labor Party in government that formed Fair Work Australia. In fact, they even appointed the commissioners. They set up the whole system. They appointed the review of the penalty rates. So they set up the umpire, the umpire made a decision to shave some of those penalty rates on Sundays and public holidays and we get the blame for it. Unbelievable!

We get blamed for what they do! I mean, you're always right. Even when you're wrong, you're right! That's your system, Senator Cameron, and you go on and blame the government. Senator Polley was talking about high regional unemployment. It is quite amazing where I live.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

Senator Polley on a point of order?

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

It is in the standing orders that you should refer to senators by their title.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

I believe that Senator Williams had referred to senators—but I would remind Senator Williams. Senator Polley, I'll take you at your word; however, I certainly did not hear him refer to anybody else but by their title.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I referred to Senator Polley. Does she have another title? If she does have, I'd be keen to learn about that. So Senator Polley takes the point of order. Regional jobs: it is quite amazing where I live that we have Bindaree Beef our local abattoir. We have plenty of young unemployed. Why don't they work at the abattoir? We rely on Brazilian and Filipino visa workers to carry out the work. Why aren't the locals working there? Would it be the fact that some of them don't want to work at an abattoir? Did some get a job there and when they rolled up they failed the grog test or the drug test? You only have to talk to many abattoir owners who rely so much on backpackers et cetera coming in to do that work. We had this big debate about the backpackers tax. We've 730,000 people unemployed in Australia, can't they pick fruit? Can't they help with the vintage in the grape season when the wine grapes are being picked? Can't they work in the abattoirs? Can't they shear sheep? Unbelievable.

Back to the bill in front of us—this is a very important amendment. Could I commend my good friend, Adele Ferguson. My wife, Nancy, and I are very good friends with Adele and her husband, Christian, and their daughter, Emma. Adele tipped me off months before she did the Four Corners story on 7-Eleven. What a disgusting situation it was: youngsters out here on student visas. On none of those visas could they work more than 20 hours per week so 7-Eleven franchisees employed them and worked them for 40 hours a week, but at half-pay. Instead of paying them $17, $18 or $19 an hour, or whatever the rate was—perhaps more on a casual rate—they paid around $10 an hour in many cases. Then they said to those students, 'If you dob us in for underpaying you, we're gonna go to the government and we're gonna dob you in for working more than 20 hours a week, and we'll have you kicked out of the country.' What a good blackmailing system that was to use and abuse workers. I've said it a thousand times: life is about fairness. People should be treated fairly, with a fair day's work for a fair day's pay. It's been around all my life that saying. Congratulations, Adele Ferguson, for highlighting the rorting that 7-Eleven carried out in many of their franchises on many of those workers, and their absolute abuse of them.

Another very respected person in Australia, Mr Allan Fels, was appointed the adjudicator to clean this mess up. It wasn't long before millions and millions of dollars were being paid by 7-Eleven. And what did they do? They sacked Allan Fels. I wonder why? Because a decent man was doing the right thing, that's my suspicion. And so it goes on. There is not only 7-Eleven, but also Muffin Break, Gloria Jean's, Subway, Caltex, Domino's, and Pizza Hut franchises. That's just some.

I've said it before in this place: when the Parliamentary Joint Committee on Corporations and Financial Services, which I'm part of, completes our whistleblowers inquiry and our inquiry into life insurance, I'd like to see the committee do an inquiry into franchises and the absolute abuse of their workers and the tactics they use to cheat workers. Why did 7-Eleven underpay their workers? Was it because the actual chiefs of 7-Eleven were not giving a fair deal to their franchisees? Were they forced to actually cheat to try and stay afloat? These are questions we need to have answered, and I think a parliamentary inquiry by the PJC on Corporations and Financial Services could have a good look at that and perhaps find more answers to see if we need more amendments later on.

The conduct by certain businesses is fuelled by inadequate penalties and ineffective laws, which fail to deter lawbreaking and make worker exploitation difficult for the regulator, the Fair Work Ombudsman, to prove. Underpayment of workers is unfair for workers, but also for competing businesses who do the right thing and face higher costs because they are complying with the law. If you are a convenience store other than 7-Eleven and you're paying the correct salary or the correct rate of pay to your employees, you've got certainly an unfair competitive disadvantage to those who are cheating the system. It is so wrong. When someone abuses their power, whether it's union bosses intimidating small businesses or dodgy employers exploiting vulnerable workers, the Turnbull government will take action. I'm pleased that is exactly what we're doing here now.

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

What about crooked farmers?

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Crooked farmers? Never heard of one! Senator Cameron is saying in his interjection, 'What about crooked farmers?' All the farmers I know have been the honest, hardworking people who do such a great job not only feeding all of Australia but millions of people around the world as well, and who suffer some terrible times. Luckily, with good irrigation equipment and good pumps, these days they can do well.

This bill will amend the Fair Work Act to increase penalties by 10 times for serious contraventions of payment related protections in the Fair Work Act, which will apply when contraventions are systemic and deliberate. The bill will also raise penalties for record-keeping requirements to make them consistent with penalties for underpayment of workers. The bill will outlaw cashback and other coercive behaviour by employers where employees are paid correctly but then forced by their employer to repay part of their wages. How is that for a cheating system? They say, 'The award's $20 an hour and we'll pay you $20 an hour, but here's the deal: you give us $8 an hour back for giving you a job.' What a disgusting treatment! It will hold franchisors and holding companies responsible for underpayments where they should have known about them but failed to take reasonable steps to prevent them, as in the case of 7-Eleven and no doubt more to come. The amendments will strengthen the investigation of underpayments by giving the Fair Work Ombudsman effective evidence-gathering powers similar to that of ASIC and the ACCC and outlawing the provision of false or misleading information and the hindering and obstruction of inspectors who carry out investigations into compliance with the Fair Work Act. Those powers will be welcomed by the ombudsman and are, as I said, similar to those of ASIC and the ACCC.

A point on building on a record of protecting vulnerable workers: the bill builds on steps already taken by the government to protect vulnerable workers, including establishing the Migrant Workers' Taskforce chaired by Professor Allan Fels—a man who I have been privileged to meet on several occasions, and who is a thoroughly honest, decent man, in my opinion, who will do a great job of chairing that task force—to target employers who exploit migrant workers and to continue to monitor the progress of 7-Eleven in rectifying workers' underpayments. Hopefully, the compensation is going out to those workers with interest on top. We will be boosting funding to the Fair Work Ombudsman by $20 million to ensure that the regulator has the resources to investigate and prosecute employers who exploit workers. That is another good thing. There is no point having a good oversight cop on the beat without the funding for them to carry out their duties; they need to be resourced well. Taskforce Cadena was established in June 2015. This is a joint task force between Australian Border Force and the Fair Work Ombudsman to target and disrupt criminals organising visa fraud, illegal work and exploitation of foreign workers. Also, we are requiring a valid payslip as proof of paid work before a second working holiday visa will be granted to temporary migrant workers. The amendment outlaws payments to sponsors of foreign workers by making it a criminal offence for employers and visa applicants to solicit or receive a payment in return for visa sponsorships. That's good thing to bring the heavies down on those people who wish to cheat in that way. We are funding enforcement bodies to ensure that employers comply with their obligations as sponsors of skilled visa holders.

As I said, the first person to bring this to the public arena was Adele Ferguson, with her Four Corners story, and I commend her for her great work. It is simply wrong that employers use all sorts of bribes, threats or whatever to threaten workers for one reason other another, and then underpay them or not pay them by the award. It is disgusting, and I've known those companies that will no doubt be under the spotlight when we get this inquiry going, and I hope we do: not only 7-Eleven but Muffin Break, Gloria Jean's, Subway, Caltex, Domino's and Pizza Hut franchises.

I bet you there are more people cheating, because these students who come here, especially the students, have to work and get a job to try and make their way through tertiary studies. We know what our education system is like in Australia. One of our huge income earners for our nation is education—people coming here to get a top-quality education. Our standards are tremendous, our reputation is great, and many from overseas—India, Asia or wherever—like to come here because they can hang their hat on one thing that makes them extremely proud: 'I have got a degree from an Australian university.' Of course, many of them come from very poor families, and when they come here they work very, very hard, and they need to work hard to pay their way through university, to pay for their accommodation and meals et cetera and the cost of living, only to find that some of these franchisors are simply abusing them. So the amendments put forward in this legislation make it a criminal activity and set up a watchdog with Professor Allan Fels at the lead—as I said, a thoroughly decent man—to see these people are not cheated, they're treated with respect, they are paid the correct award wages and they can get on with their lives without having to be bribed, blackmailed or whatever into receiving pay that is simply unacceptable and, of course, well below the award.

We have an award system in this country. We have umpires that set those awards: as I said, Fair Work Australia and the Fair Work Ombudsman, who make various decisions. Of course, when they make a decision that those opposite don't like, because those opposite set the whole system up, they blame us on this side of the chamber. That's quite amazing—blaming us for their activities, for establishing the umpire. The umpire makes a decision. I've seen it all my life. I've said it before. When the umpire was put in place to work on things such as the shearing award, when they gave a pay rise, we as graziers paid the pay rise with no questions asked. But, of course, when they said, 'You can use wide combs as an option,' what did we have? We had strikes, fights and sheds black-banned by the unions. My brother Peter and I had our shed black-banned because the umpire made a decision but the Australian Workers' Union didn't like it. So this is typical: when the umpire makes a decision, if those opposite don't like it, they say, 'Let's cause havoc and strife, as we did in the shearing industry.' Luckily, since then we've never seen a dispute in the shearing industry.

Hopefully this amendment will clean this mess up in Australia—I'm confident it will. With the inquiry into this by the Parliamentary Joint Committee on Corporations and Financial Services, we can have a good look over several months—six months or eight months; there'll be no hurry once the workload's off. We know how stressed the committees are for work at the moment. Let's look at the terms of reference. Let's have another look at the franchisors and the franchisees, how they've behaved and what pressure they're under. Is it the franchisors causing the pressure? That's one of the arguments under 7-Eleven: small profit margins and the small business battling to keep their head above water to survive financially. Look at the franchisees and their behaviour. Look at the compensation and how it's working.

It will be very good to have Allan Fels in front of the committee and ask Mr Fels some questions about how he carried out his duties at 7-Eleven, where he was going with it and why they kicked him out. That's the question I'd like to have answered, because he was brought in as a man who commands enormous respect in Australia. He was doing the right thing, serving out millions of dollars of compensation—rightfully so—to those foreign workers who were cheated, blackmailed, bribed or whatever, only to find that next thing Allan Fels was booted from his position as the independent umpire making judgements on those compensation packages.

I look forward to the ride ahead and say that, if we can see more wrongdoing in the franchise industry, hopefully the committee inquiry will bring that out. If necessary, we will come back into the chamber here and make more amendments, if we can find it out. That's what committees are there for: to find out what's wrong, to see the current laws, to recommend to the government and say, 'Hey, this needs changing; this is something you've overlooked,' and to hear those witnesses come forward.

I hope we get some of those young workers and students, many of them from India. We see them out there. They are great workers in the service stations, 7-Eleven stores, et cetera. Let's hear from them, let's hear their side of the story and let's see what else we can find out to see what else has to be done so that employers, franchisors and franchisees treat their workers properly. I've been fortunate in my life. I've been an employer and an employee. I worked as an employee as a truck driver, in small business, EMS, agricultural spraying and as a shearer. I've also been an employer in business and on the farm, so I have a good understanding of both sides. People should be treated fairly, paid at least the award and looked after—a fair day's work for a fair day's pay.

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

I too rise to make a contribution to the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 that's before us this evening. Before I do that, though, I want to say that I am disappointed in some of the comments that Senator Williams has made, particularly when he described Australian local workers that he says didn't want to work in the local abattoir perhaps because they were drunk or on drugs. That is an absolute slur on the character of Australian workers. In fact, the visa inquiry which I chaired—and Senator McKenzie was the deputy chair—found quite the contrary in Queensland. I am very disappointed that Senator Williams, who normally does stick up for workers in this place, would make those slurs to suggest that these local workers were too drunk or high on drugs and not wanting to work in an abattoir. That is a slur against Australian local workers. I would ask that at some point he withdraw that.

I also want to draw Senator Williams's attention to the visa inquiry that Senator McKenzie and I did. There's no need to look at a joint inquiry. We did a Senate inquiry some two years ago that was set up under a reference that Labor put forward where we saw truly shocking exploitation of workers. I have to say that, as a longstanding trade union official before I came to the Senate, I made this remark during committee processes: I thought I had seen all the exploitation there was to see. I can certainly tell the Senate and those listening that the evidence I heard truly shocked me—Baiada, D'VineRipe, the abattoirs—it went on and on and on. And it wasn't just visa workers. We saw Australian or local workers displaced and visa workers put in their place, because they represented a cheap form of labour. It is absolutely unacceptable to what we in Australia stand for, and that is a fair day's pay for a fair day's work.

I'm pleased that this bill is with us, but it's taken way too long and it does not go far enough. Certainly, I'm sure, that is the view of all of my Labor colleagues; it simply doesn't go far enough. We found in the Senate inquiry that I chaired that it isn't just visa workers working in a particular segment of our labour market who are exploited. I'd suggest we don't need to scratch the surface very far at all to see that there's exploitation of workers in this country across nearly all industries. Unless they are well-regulated or well-unionised, exploitation is rife. That is a sad fact for a country that at Federation set some truly groundbreaking laws and initiatives when it comes to protecting vulnerable workers or all workers. We were one of the first countries to put in place the eight-hour day. Those are traditions we ought be proud of. Certainly, in terms of protecting workers, we should continue to do that, and this bill doesn't go far enough.

In the inquiry that we led in the Senate, we did focus particularly on visa categories which gave workers work rights. I'm not going to canvas the range of visas that do that, but all of those visas need proper regulations where the work is an incidental part of the visa, which it is for students coming here to work, or where it is someone on a 457 visa who is specifically here to work. What we heard in the committee was that the exploitation of foreign workers, and, indeed, local workers, meant that other programs we had where we particularly involved our neighbours in Timor-Leste—where those seasonal workers were invited over in a very targeted, well-protected program—tended to tail off, because foreign workers were being completely exploited. This means that employers now don't go to the trouble of setting up the seasonal worker programs that are primarily set up to enable workers from countries like Timor-Leste to come here and get that experience, to get some money to send back to their families. They were a reliable pool of workers, but those sorts of well-regulated programs are now under threat because of this open exploitation of foreign workers.

We also know that it's not just exploitation and the loss of significant wages. The underpayments at 7-Eleven are shameful, and I don't think anyone in this parliament disputes that. Millions of dollars were ripped off young workers. Imagine workers being forced to pay money back in this day and age! Employers were falsifying the wage record, and if you earned $100 for the day—although you'd have to be a very lucky 7-Eleven worker to get that much—your employer then clawed back at least half of that, and often more than that. Those workers were caught in a situation where they had to work more hours because they simply weren't earning enough, because the employer was ripping them off or was not paying them at all or was putting them on training shifts that didn't attract money. On and on and on it went.

In Queensland, the meat workers' union gave really strong evidence. There was a myth that local workers didn't want abattoir jobs, that they were simply hard to get; however, the meat workers' union went to towns, held town hall meetings, got young people to come along, got the employers from the abattoirs to come along, and they saw firsthand that in fact there was a pool of young workers. And not just young workers, but a pool of workers of all ages who really were prepared to work in an abattoir. They required some skilling and they required the vaccinations, as do foreign workers, but the employers simply didn't pick them up.

The meat workers' union didn't just leave it at this initial run-through in Queensland with employers to show that in country towns there actually were workers who wanted to do abattoir work. The union got commitments from the employers that they would take on these workers who had expressed an interest, and they went back some months later to find that only a very small proportion of those workers had been taken on. It was obvious to me, certainly, because of my former experience as a trade union official, that the competitive part of the meat industry, the abattoir industry, which is the boning room, was absolutely full of visa workers. Why? Because that is where competition is tough; that is where wages are contributing to profit levels. The more you ripped off foreign workers by paying them piece rates, which simply did not exist in the awards, or just ripped them off, then the bigger the profit margin was.

The employers tried to run this ridiculous argument that didn't hold water at all, saying how this was a particular skill area and required a certain amount of training. If that was the case, they had a supply of local workers who were ready and willing to be skilled up. But really, when it came down to it, when you took all the fluff and nonsense away from what the employers were saying, this was the area where you could really exploit foreign workers. You could pay them the award and not the enterprise agreement, because you were using a labour hire company. You could completely undercut the rates of pay and, therefore, enhance your profit. And what we know, through the meat industry, is that those workers weren't even getting the award rates of pay. You had the situation where the meat industry had negotiated enterprise agreements in consultation with the employer, the employer had agreed to pay X amount of dollars—particular rates for boners; particular rates across the rest of the abattoir—and yet in almost 100 per cent of cases we saw that the boning room in particular was the room where abattoir after abattoir—

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

It being 9.50 pm, I propose that the Senate now adjourn. Senator Lines, you will be heard in continuation.