Lisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | Link to this | Hansard source

I'm pleased to finally have the opportunity to speak on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. The Labor Party have been calling for years for this type of legislation to protect vulnerable workers, with no joy at all. Finally we have some action on protecting vulnerable workers, but it certainly does not go far enough. Having said that, it is, I guess, better than nothing, and this bill does go some way towards dealing with the exploitation that occurs across our economy in Australia. We support its passage through the Senate because, as I said, we are better off having something than nothing at all, which is what we have had for a number of years. The government has had to be dragged kicking and screaming to act to protect vulnerable workers.

At the last election Labor had policies to combat sham contracting; to shut down the practices of companies, phoenixing to avoid wage liabilities; to reform the Fair Work Act to protect vulnerable workers; to criminalise employer conduct that involves the use of coercion or threats during the commission of serious contraventions of the Fair Work Act, particularly in relation to temporary overseas workers; and to make it easier for workers to recover unpaid wages from employers and directors of responsible companies. This bill, however, does nothing to address these issues, and that is why I emphasise that this bill does not go far enough to protect vulnerable workers. It also does not protect workers from cuts to penalty rates made by this government. Up to 700,000 Australians will lose up to $77 per week—people who will have to work longer for less, women who will be disproportionately affected by those penalty rate cuts, and regional communities who will have less money spent in their economies. So there is a real need for this bill.

The issues that I've just raised are of major concern to the opposition—to the Labor Party and to me personally. For some time now senators in this place would have been aware that I've been on an inquiry looking at the introduction of a modern slavery act in Australia. A lot of the evidence that has been brought to our attention during the Joint Standing Committee on Foreign Affairs, Defence and Trade's inquiry into modern slavery in Australia has included examples of some of the issues that were covered by Labor's policies at the last election. These included issues to do with coercion and threats by employers, particularly for temporary overseas workers, and issues to do with workers being unable to recover unpaid wages from their employers.

I would like to refer to the submission to the inquiry into establishing a modern slavery act by The Freedom Partnership: End Modern Slavery—that is, the Salvation Army, as well as the Uniting Church of Australia, FECCA and ACRATH. In their very, very detailed submission, they give examples of workers who have not been protected. Indeed, I would like to share with the Senate one example of what modern slavery looks like in Australian supply chains across a range of industries. In fact, this example is about a man called Samuel Kautai. Samuel Kautai was a young man from the Cook Islands, who along with four other men, all around the ages of 17- and 18-years-old—just starting out in their working life—were recruited by an employer's brother in the construction industry and were promised that while they would not get any wages for the first three weeks, after that they would get paid the full amount, and be able to send money back home to their families in the Cook Islands. However, he was never paid more than $50 a month. This is here, in Australia. He was never paid any more than $50 a month. And worse than that, Samuel and some of his co-workers, were physically abused, underfed and endured long working hours without decent breaks. This case was pursued by the CFMEU under industrial mechanisms and by the NSW Police Force under state criminal law. The case was decided both times in favour of the applicant, which, of course, resulted in the employer having to pay back to Samuel Kautai and the other employees what they were duly and rightly owed.

When we talk about protecting vulnerable workers, we are talking about workers across a range of industries from construction to carpentry to welding to the meat industry as well as domestic workers, market garden workers, horticultural—I have so many examples in this submission to our modern slavery inquiry of workers who have simply been ripped off and who have been treated appallingly, all because of their employers obviously doing wrong by them, but also because we don't have legislation that provides those protections that Labor has been asking and urging this government to deliver.

These examples of exploitation make it clear that action is needed. For example, subcontractors' exploitation—who were engaged by Myer employing cleaners on sham contracts under which workers were paid below award wages, denied penalty rates and superannuation, and worked without occupational health and safety protections—needs to end. Of course, we are all very familiar with what occurred with the 7-Eleven stores. They were operating a business model based on methodical, systematic exploitation of vulnerable foreign workers that included the gross underpayment of wages and doctoring of pay records designed to conceal unlawful conduct, and workers subjected to threats of deportation and physical intimidation. This has no place in a civilised society like ours. It has no place in Australia.

Protecting vulnerable workers is laudable, but, unfortunately, this government cannot be trusted when it comes to protecting vulnerable workers. We have concern that this bill gives coercive powers to the Fair Work Ombudsman without external scrutiny and oversight, and that it could be abused to investigate unions and industrial action rather than actually protecting the vulnerable workers that it needs to protect. We believe that this legislation needs to be amended to ensure that these powers can only be used in investigations into the underpayment of wages.

Labor will continue to lead the way in protecting vulnerable workers, be it through legislation or amendments to this bill in this place or be it through our work in support of the introduction of a modern slavery act similar to that in place in the UK, France and the Netherlands. And, of course, Labor will also ask for the Fair Work Ombudsman to have all the powers necessary to pursue employers who exploit workers. The Fair Work Ombudsman must have powers to be able to pursue those employers, whatever the case may be. But the powers, of course, must have proper oversight. That is what we are asking for in relation to this Fair Work Amendment (Protecting Vulnerable Workers) Bill.

As I outlined, this bill does fall significantly short of the suite of policy and legislative reforms that Labor first announced more than 12 months ago, before this Turnbull government even turned its mind to the notion of protecting vulnerable workers, because it's so caught up in its ideological obsession with unions and its lobbying against workers rather than actually standing up for their protection. I'm pleased to have had the chance to speak on this bill. We've been calling for action to protect these workers for a very long time without any joy. But something is better than nothing, and it's pleasing to see what we have before the Senate today. Let's strengthen this bill so that it can really do what it should do: protect vulnerable workers in Australia.

Lee Rhiannon (NSW, Australian Greens) Share this | Link to this | Hansard source

The Fair Work Amendment (Protecting Vulnerable Workers) Bill—it's not a normal name for a bill that comes out of this government. But the circumstances are worth considering. It got to a point where there was such enormous pressure on the government that they had to do something. But when we look at the detail of the bill we see that something isn't adequate; it doesn't actually solve the problem. And the problem is enormous: extreme exploitation of some of the most vulnerable workers that we have in our society. The fact that the bill has been introduced is significant, but we need to look into the detail, and the Greens will be moving amendments similar to those that my colleague the Greens industrial relations spokesperson, Adam Bandt, moved in the other place.

This bill is before us because of the courage of a few people who really looked into what was going on with the franchisees to understand the conditions that the workers were existing under. It became apparent that they are very tough. For many of them, their lives are on hold because of uncertainty with regard to the wages that they will be paid, and even if they will be paid. A lot of these scandals started with 7-Eleven. We quickly learnt that one person's convenience store is often another person's workplace of extreme exploitation and rip-offs. What we learnt is that 7-Eleven is probably just the tip of the iceberg, because there's Caltex, Domino's and probably many others where the loopholes in the law are now well-known by the legal eagles who are employed. They've worked out how they can become rich very quickly off the back of people who are actually keeping these businesses going.

These scams are extreme. It was found that some people were getting paid and were then being forced to give back part of their wages in so-called cashback scams. It was found that, so the proper payment and proper taxes did not have to be paid, the hours the people were being rostered for did not actually represent the hours they were working. It is a real scam of the books that has been going on for a long time and is now out in the open. We have the opportunity to clean it up, and clean it up properly, but that will only occur if this bill is amended.

What we also need to remember here is that the workforce that we're dealing with is often people with limited English or people who are from overseas and very worried that they may be under threat of being deported, even if they have a secure visa and it's totally legitimate that they live here. There have been many reports of intimidation, threats and insinuations made along the lines of, 'If you speak up, if you try to change things and get your proper pay, you could well be deported.' That's deeply shocking, and it needs to be factored in to how we handle this situation.

In my opening remarks I said that we have this bill before us now largely because of the dedication of a few individuals. One of them is Michael Fraser, who really dug into what was going on here. With the 7-Eleven case, he went from store to store collecting stories, winning the understanding, support and confidence of the people working there so he could document what was really going on—the levels of oppression and exploitation that shouldn't be occurring in workplaces anywhere in Australia. There was also a group of Fairfax journalists who took on this story and reported it in detail—another factor leading to the government being forced to act. We also learned from their studies that it was not just the workers who were getting done over; the people who bought into these franchise operations were, in many instances, also being put in a situation where their income was greatly reduced—it was often quite minimal—because of the way head office operated, and they were under pretty clear directions that a lot of the money had to go back to head office. Again, it's worth looking into the operations here: (1) we need to understand it and (2) it informs us of why this bill is inadequate in its present form.

How do these franchises work? Most of us have had the experience of going into a 7-Eleven. Wherever you go, they all look pretty much the same in terms of the stock that they carry, where the stock is, the signage and all that sort of thing. This is how it operates: the head office dictates how these places are managed, micromanaging to the nth degree. But one aspect of how these small businesses—if we can use that term in this case—operate that isn't consistent is the payment of wages. This is where they seem to have a whole different set of standards. The small business franchisees that run the business carry the legal risk if there is underpayment. It's not the head office; it's not the billionaire who's sitting back, doing pretty well off the back of the hardship of so many of the workers in the industry. We see time and time again that the worker who sits at the bottom is the one who is being ripped off.

This is where we are again reminded of the failure of the bill before us, because it does not offer the protection that the title of the bill suggests. If you believed the title of the bill before us—'protection of vulnerable workers'—you'd think it sounds pretty absolute, but that's not the case. What we need here is shared responsibility, and that is why we need to amend what's before us. The bill does not shift any responsibility back home to the owner—and they're really getting filthy rich off the way this system works. When you read the stories of the people who are making money for the people who own these companies, you see that what's going on is very ugly.

As I said, the bill does not make the head office responsible. Instead, it effectively says, 'You're only responsible if you knew or could reasonably have been expected to have known that the franchisee was underpaying the worker.' That's just passing the buck. It's simply unacceptable; it's been exposed and it has to change. That's why we're going to move to amend the bill—to close that loophole and make sure that the head office is responsible. That's the essence of what we're dealing with here. Really, the government should've had a good look at the Greens' bill that Adam Bandt, the MP for Melbourne, worked on. That really brings all these issues together and makes it very clear that we do need that shared responsibility, that you can't let the head office off the hook here.

So we will be moving an amendment that will make it very clear that, if you're a worker in one of these franchises—7-Eleven, Domino's or wherever—and you are underpaid, you can go straight to the head office and claim your underpayment. At the moment, it doesn't work that way. What happens is that the head office can just get out of it. We read that time and time again in those reports and articles about what was happening. They were just passing the buck back to the small business owners that they have further down their chain of command. This really does need to change here, otherwise what the government is doing is a farce. We need it set up so that if the worker wins a court case they can claim it against the head office. This is the key to achieving the protection that the government is stating is in this bill. Then it is up to the head office. They are then the ones who have to have the battle with the franchisees that they have brought in to run their stores. That is where the battle lies. Meanwhile, the workers who have been exploited and underpaid have been able to pick up their correct pay, because they have been able to go direct to the head office. It is a very simple requirement. The government has done a disservice here.

In many ways, it is classic in terms of what you see from Liberal-National parties when they are in government. They will often try to walk both sides of the road, particularly when a problem has been identified where the business world is doing the wrong thing. They will say, 'We'll bring in a correction; we'll fix this up,' but they have left the loopholes in the bill so that big business can still, effectively, get away with so much of the exploitation. Again, let's remind ourselves: it should not be the worker left in limbo trying to work out how they get their money, who owes them money and who can actually pay them. That is what was revealed in so many of the reports that exposed how so many of the companies were working. Whether it is 7-Eleven, Domino's or Caltex, there is a similar pattern. It is ruthless; it must stop. We have the opportunity right now to stop this level of exploitation.

I can't emphasise enough: it should not be up to the individual worker to try and work out who is the person responsible for the underpayment and who will actually pay them the money. We have to get rid of the tricks—and there are tricks in the legislation before us. Our amendment effectively says that the worker can go directly to the head office and get their money back. Then we're leaving it up to the franchisees and the head offices to fight it out and to work out how they are going to undertake their business model. It really does need to change. It really needs to recognise that people have rights and that they can't use some legal scams to get away with what's currently going on.

So, yes, we do need this legislation, but to be effective it does need to be considerably amended. I look forward to the discussion at the committee stage.

Jonathon Duniam (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I, too, am pleased to be able to contribute to the debate on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. I'm going to make a very boring contribution following the media superstar, Senator Rhiannon, but I'll do my best!

A lot has been said over the last couple of months since this bill was brought on for consideration by this parliament, highlighting a great many examples of abuse of vulnerable workers and business enterprises taking advantage of those who may not be able to stand up for themselves. So I too am willing to commend the government for bringing on this legislation and for putting in place some protections and setting up a regime, or attempting to set up a regime, that will actually do something to provide some protections for workers who, as I say, may not be able to stand up for themselves.

We have seen companies such as 7-Eleven, Muffin Break, Gloria Jean's and Caltex—to name a few household brands—implicated in the allegations made about underpayment of vulnerable workers. Not having as much air time are the widespread ramifications flowing from underpayment of workers. These people have families. They have bills to pay. If they are underpaid, meeting those obligations is very, very difficult. It also has an impact on other businesses that are doing the right thing. Those who are paying the right amount—and, in some cases, more than the award rate—have an increased cost to doing business compared to those who are flouting the law and taking advantage of vulnerable workers. That's why this legislation is so incredibly important. It is why I am going to commend it to the Senate.

The Fair Work Ombudsman in its submission to the Senate inquiry on this legislation gave a great many accounts of the breaches that it had investigated and that were reported to it and the impacts that this has had on individual companies and individual human beings who were caught up in these cases. We heard stories of migrant workers being paid as little as $14.12 or $10 an hour, well below the federal minimum wage, which is something none of us should stand by and condone. That's exactly what we're getting at here—trying to crack down on this sort of behaviour. There were also stories of young people being forced to accept non-cash payments of pizza and soft drink rather than being paid the money that they were entitled to be paid. It's just unconscionable that any business proprietor or senior manager in any business entity would seek to take away from someone what they are entitled to be given in return for the work that they are contributing. So, when you hear of people doing this sort of thing, providing in-kind payment, as they would probably refer to it, in the form of sugary drinks and fast food, rather than the money they need to pay for whatever it is they need to pay for—the power bill, rent and food—it's just not good enough.

The Fair Work Ombudsman's submission to the inquiry looked at what action has been taken by business operators to evade compliance efforts. There were some startling things—for example, phoenixing, where companies liquidate and then set up a new business to avoid any liabilities that have accrued against that business in not paying what employees are due; the failure to keep records or falsifying the records that do exist, making it difficult to verify the hours that have been worked and what workers have been paid for the hours they are supposed to have worked; engaging in the cashback schemes, which I will touch on later; and targeting vulnerable workers who are less aware of their rights and less likely to report problems for a whole range of reasons, such as language barriers, a lack of familiarity around the mechanisms that are available to vulnerable workers and the protections that might be available. There are all sorts of problems. Then, of course, as we've heard before, workers have been threatened with their visa or their job—'If you don't take what I'm giving you, I'm going to send you home and seek that your visa be cancelled, or I'll terminate your employment and you won't have any money.'

I want to quote from a couple of parts of the Fair Work Ombudsman's submission because I think it's important to look at some of the things that it said. This entity works at the coalface. This is the entity that receives the complaints. This is the entity that deals with the allegations and gets to the bottom of what's going on and tries to do the right thing by the people who are purportedly being ripped off. The Fair Work Ombudsman's submission says on page 7, paragraph 17:

In some of these cases, the existing framework has not been sufficient to deter ongoing and systemic conduct across sectors, industries and regions, and usually with respect to these workers. Some unscrupulous employers view non-compliance as a business model and do not fear being caught out for their behaviours, or consider penalties associated with their breaches of the law an acceptable cost of doing business. These employers often do not keep proper records or payslips and are unwilling to engage with the FWO in an investigation.

That gives you an insight into what the Fair Work Ombudsman is dealing with in trying to get to the bottom of these things. The fact that the Fair Work Ombudsman acknowledges in its submission that there are business operators who see this as a way of doing business—a worthwhile risk; something that they are willing to sort of take a chance on in the event that they get caught out and may have to pay a fine—is just unbelievable. How these people can sleep at night, thinking, 'It is worth it in the end,' all the while inflicting some sort of misery on individuals who have been underpaid is certainly not something that is at all Australian. Again, that's why I'm so pleased that we are considering this legislation today.

Moving to paragraph 23, the submission goes on to say:

The package of measures outlined in the Bill together would make a significant difference to FWO's capacity to address this conduct where it occurs. In particular, providing higher penalties that reflect the gravity of serious contraventions of the law and ensuring there are real deterrents against not keeping records or falsifying records for the purpose of disguising underpayments. Ensuring Fair Work inspectors are taken seriously and cannot simply be ignored will make a significant difference when tackling the worst sort of conduct.

The FWO refers to, in the broad, the amendments proposed in this piece of legislation, saying that these will help them do their job—to deal with those dodgy operators who falsify, destroy, don't keep records and who think they can get away with ignoring the FWO when they come knocking, saying: 'Hey, we have examples or complaints against your business suggesting that you're engaging in this sort of conduct. We want you to provide evidence that this is not the case.' I think the fact that they're going to be able to clamp down on that is an excellent thing and something I look forward to seeing the results of as we move forward.

Moving to the conclusion of the Fair Work Ombudsman's submission to the inquiry, paragraph 113, they conclude by saying:

As the FWO has noted, the regulatory framework is fit for purpose in most circumstances but is not sufficient to deal with the most egregious behaviour in matters involving the exploitation of vulnerable workers. The proposed amendments would enhance the FWO’s ability to deal with serious and concerning conduct within the jurisdiction of the FW Act and contribute to efforts across government and within communities to address the drivers of workplace exploitation.

As I say, this is from the people who are at the coalface of dealing with this issue, of dealing with the complaints from vulnerable workers, their family, their friends and other employee-representative organisations who become aware of this stuff. To hear them make those comments about what this bill will do—the people who have to go out and apply it—is encouraging.

Fundamentally, when we do see this abuse of power—be it the employer, a senior manager or someone from any other representative organisation exploiting vulnerable workers—it is incumbent upon us to take action. This legislation does exactly that. Under the amendments contained in the bill, as has been stated in previous contributions, the franchisor will, in certain circumstances, become liable where a franchisee or one of the franchisor's subsidiaries violates specific sections of the act, such as the National Employment Standards, any modern awards, methods and frequency of payments, or record-keeping obligations. Most of those are very straightforward and, I think, speak for themselves.

Much has been made in the debate about the transfer or liability to the franchisor, so it's important to set out exactly what the amendments will establish and in what circumstances they'd be applied. The amendments introduced the notion of serious contraventions to apply deliberate and systematic breaches. They strengthen the liability and responsibility of franchisors for the business conduct in the franchises under their direction. It's important, though, to point out that the breaches targeted through these amendments differ greatly from the genuine mistakes—and they occur. I'm aware of one in Hobart, which attracted a great deal of media attention which was a genuine mistake. It was a business that had engaged the services of a third party to do its bookkeeping, a reputable firm. Clearly, this reputable firm and the individual they sent along to do this business's books didn't know what they were doing. As a result, the staff were underpaid a significant amount and this business was dealt with under the law. As with many of these cases, a significant amount of public attention was given to this business, somewhat unfairly. All the same, it will be nice to see these genuine mistakes, if they can be properly demonstrated, taken out of the basket that some of these more dodgy operators should be kept in and dealt with. In doing that, there is the three-stage test, to determine whether or not this is a genuine mistake, that must be satisfied before the franchisor can be held responsible. That test is as follows:

… the franchisor:

Those three steps do establish a bit of a mental intent test, for want of a better expression, to ensure that the entity against whom the complaint is being made was seeking to actually do what has been done and that is the subject of the complaint.

The bill also seeks to define a 'serious contravention' as one that is intentional and is part of a systematic pattern relating to one or more individuals. Again it points to it being something that's planned or deliberate and is happening to a number of employees, rather than just one out of 30 or 10. Further, the bill notes elements that the court may give regard to when assessing whether a systematic pattern exists. So there are going to be strict tests under the law that the courts will adhere to when assessing these things.

A 'responsible franchisor' is one who has a significant degree of influence or control over the franchisee entity's affairs. The bill aims to ensure that franchisees and franchisors are held responsible for a series of contraventions, including underpayments and sham contracting, which we've heard a lot about in the debate over the last day or two. The bill also extends accessorial liability to franchisors where they knew or should have known that contraventions were occurring in one of their franchises. This liability means that an individual or company involved in the breach would also be potentially responsible in situations where they were not directly participating in the breach itself. So the amendments will apply to both franchisors and master franchisors if they exercise a significant level of influence or control over the franchisee's activities. The amendments do provide exemptions for franchisors in circumstances where they can demonstrate that they took reasonable steps to prevent contraventions and there were no reasonable steps they could have taken to prevent such a contravention from taking place.

Other provisions include increasing penalties tenfold for serious contraventions of specific parts of the act and for failure to maintain proper records. Individuals who engage in serious contraventions face a maximum penalty of 600 penalty units, which is $108,000, and companies could face a penalty of $540,000. That is, as stated, a tenfold increase on the current penalties and represents the government's resolve to deter these sorts of practices. I think it's important to note that, in the submissions to the inquiry, a number of entities said that the penalties didn't go far enough and others said that they went too far. To my mind, when you see those sorts of comments being made, it often means that you've got the balance right. Certain entities with certain interests believe that we're going a bit hard and others would like to see us go harder.

Further amendments outlaw the cashback and other coercive behaviour by employers where employees may be paid correctly but then forced by their employer to repay part of their wages. I heard Senator Williams explaining yesterday this disgraceful conduct. In some cases it has been suggested that the employer marches the employee down to the ATM and asks them to hand back a portion of what they've been paid. To see employers trying to make it look like they're doing the right thing on paper—'We've paid them X amount this week'—and then forcing their employee to give back a certain amount, because they were threatening them with having their visa removed or terminating their employment, is just disgraceful.

The EM for the bill specifically references the inquiry into the 7-Eleven scandal, which we've all heard and read so much about, and their involvement in cashback practices. It's important to note through this scrutiny and in debating this legislation that it was just some franchisees who did this and that others did pay their employees the lawful rate. Again, in the same case that had received so much public attention, the franchisee then deliberately falsified records to disguise underpayments. This practice, which clearly demonstrates that these businesses were seeking to deliberately rip off employees and hide it from the public and from the regulator, is exactly what we should be looking for and catching out. The amendments hold franchisors and companies responsible for underpayments where they should have known about them but failed to take reasonable steps to prevent them. The bill also builds on steps already taken by the government to protect vulnerable workers and broadens the circumstances in which franchisors can be held responsible for employment law breaches by their franchisees.

I will now touch on some of the contributions made by some of my colleagues yesterday in the debate. It's always good to listen to Senator Helen Polley and the contributions she makes in these debates. And I'm disappointed that I haven't yet heard Senator Bilyk's contributions, but I look forward to listening to that afterwards. Senator Polley referenced earlier on, consistent with some submitters to the inquiry, that the bill didn't go far enough. I make the point that there were some submitters who said it went too far, again pointing to the fact that the balance in this bill is right. And, when you take that into account with the amendments that have been proposed in the majority report on the inquiry into this bill, I think that the bill is exactly what we should be passing.

I have been amused at the reference to cuts to penalty rates and how that somehow gets intertwined into the substance of this bill. I accept it's an issue that there has been a great deal of public debate on. I don't think that I need to point out, for those who have listened to the debates on that issue, the rewriting of history from the opposition with regard to that. But it's very convenient. And, when they can conflate that into this attack on workers, then—

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

You were doing so well up until then!

Jonathon Duniam (Tasmania, Liberal Party) Share this | Link to this | Hansard source

All points to the opposition for trying, but, when it isn't material to the substance of this bill, I do have to question why it does get raised. But I do understand that there is a pitch out there in the community to try to paint Australia as the most unequal society in the world and that it's all because of this government. I guess that all fits into the arguments, the dog whistles and the catch cries of the opposition in trying to defeat this sort of legislation.

In conclusion, in the words of the Fair Work Commission, 'No one single measure will fix this oversight,' but the package of measures in this bill will go some way to combatting some of the most serious worker exploitation in this country. In commending the bill to the Senate, I want to also pay tribute to the work of my colleague Senator Bridget McKenzie, as the chair of the legislation committee that inquired into this bill, and the proposals that her committee report made. I commend the bill to the Senate.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I'm pleased that I was given some time today to talk on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. It's good that, having seen levels of abuse of workers' rights that not even this government could ignore, we are finally presented with the bill. Over the last couple of years, just some of the high-profile cases of exploitation of workers we've heard about include 7-Eleven shop assistants, Myer cleaners and Pizza Hut delivery drivers. But what we need to remember is that not all cases have been high profile. There has been consistent evidence of the exploitation of workers taking place over quite some time.

It is utterly despicable that in 2017 we're still hearing of exploitation of workers on such a large scale. Labor senators welcome the provisions of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, which will reduce the exploitation of some vulnerable workers in Australia. However, Labor senators consider that in some aspects the bill as currently drafted falls well short of addressing the range of ways workers are exploited. It falls significantly short on the suite of legislative measures required to properly address the breadth of worker exploitation.

For those who said that the bill has gone too far, I would suggest that they possibly don't like accountability, because the bill does nothing in relation to sham contracting, phoenixing to avoid wage liabilities or reforms to the Fair Work Act to strengthen protections for workers, and it does nothing to make it easier for workers to recover unpaid wages. As such, Labor senators believe that a number of amendments are required in order to provide a more comprehensive solution to the very deliberate and systematic exploitation of workers in Australian workplaces. It could be a better bill, and if the Senate accepts our amendments, it will be, but I do acknowledge that it is a start.

I shouldn't have to say it, especially here in the Australian Senate, but throughout the country employees shouldn't be ripped off by their employer, ever—full stop. Employees should be fairly paid in line with their agreements and the law. Employers shouldn't deliberately rob their workers to boost their own profits. We should be a better nation than that. However, we've seen in the last couple of years gross, systemic and wilful exploitation of workers, in particular, by some very large national franchises. This is completely unacceptable. It's unacceptable to the employees and to the employers who are placed at a competitive disadvantage by doing the right thing and paying award wages or over award wages, and who aren't exploiting their workers. It's unacceptable to the union movement and it's unacceptable to our sense as a nation of the fair go.

The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 amends the Fair Work Act to increase penalties for serious contraventions defined as conduct which is:

(a) deliberate; and

(b) part of a systematic pattern of conduct relating to one or more other persons—

of prescribed workplace laws. Also:

And the franchisor or holding company may raise a defence of taking reasonable steps to prevent a contravention, and:

giving the Fair Work Ombudsman and employees at SES level the power to compulsorily question persons as part of an investigation in to the breaches of the Fair Work Act where failure to answer questions gives rise to a civil liability.

As I said, those measures are a start, but they don't go far enough. But there's a policy that does properly protect workers' rights. Labor's rights at work policy released at the start of 2016 committed a Labor government to put in place a suite of reforms to protect rights at work by cracking down on unscrupulous employers who are willing to exploit employees.

Labor's Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 is a far more comprehensive suite of measures to protect vulnerable workers. As an example, our bill contains amendments to the Fair Work Act 2009, which make it clear that the Fair Work Act applies to all employees, irrespective of their immigration status; require the Fair Work Ombudsman to publish information for employees about the relationship between workplace and immigration laws and the right of overseas workers to seek redress for contraventions of workplace laws; provide additional protection from adverse action taken against an employee who questions whether a workplace right exists or whether they're an employee and not an independent contractor; introduce a reasonable person test in determining whether an employer has engaged in sham contracting; give the court the power to make orders requiring directors of phoenix companies to pay unpaid wages and other employee entitlements when a company of which they're a director is phoenixed; increase threefold the maximum penalty for employers, other than small businesses, who deliberately and systematically deny workers the wages they are due; give the courts the power to disqualify directors involved in companies that are found to have deliberately engaged in serious contraventions of workplace relations laws; and introduce new criminal offences for conduct that involves the use of coercion or threat within the meaning of slavery or slavery conditions of the Criminal Code where employers commit serious contraventions of the Fair Work Act in relation to temporary overseas workers.

Labor's bill is significantly better than the one presented today. I would like to take a moment to talk about the importance of ensuring that franchisors ensure franchisees are in compliance with the Fair Work Act. The Fair Work Ombudsman in the report into 7-Eleven found:

It is our opinion that 7-Eleven had a reasonable basis on which to inquire and to act. To the extent that 7-Eleven contends that issues were limited to the few rather than the many, the Fair Work Ombudsman provided evidence of widespread compliance risks across the network in October 2014 at the commencement of the inquiry and again in May 2015 when presented with the preliminary findings of the 20 stores audited in September 2014.

So, in other words, 7-Eleven knew of the behaviour that had been going on across its franchisees for many years, yet they did nothing to protect the workers. This is utterly shameful. In addition, the Fair Work Ombudsman's 7-Eleven report said:

While 7-Eleven is not legally responsible for entitlements payable to employees of franchisees, it has a moral and ethical responsibility for what has occurred within its network and is capable of preventing it occurring again.

On this same issue, Labor senators, in their additional comments to the Senate Education and Employment Legislation Committee's report into this bill, noted:

… the concerns raised by submitters such as WEstjustice that the bill as currently drafted does not make it clear that responsible franchisor entities and holding companies will be liable for the breaches of the franchisee entity or subsidiary.

Labor senators also consider that the bill does not go far enough in its amendments to expand accessorial liability. As the Franchise Council of Australia argued:

No evidence provided makes the case for singling out franchising when Fair Work compliance concerns are an economy-wide issue.

Labor senators contend that this evidence supports the need for liability to be extended so that franchisors cannot avoid responsibility by merely rearranging their affairs. Employers shouldn't be able to wash their hands by shifting employees to labour hire firms. This is one of the reasons that the bill, as originally drafted, doesn't go far enough.

However, just protecting workers from exploitation is not enough. We also have to work to protect their take-home pay. Of course, we all know that penalty rates are of vital importance to low-paid workers, and on this the government has failed those workers again. I often wonder if those on the other side of the chamber have ever had to rely on penalty rates—not just getting them from working a part-time job while living with mum and dad and all the comforts of home but actually relying on them. We're not just talking about students and young people; we're talking about 700,000 people: mothers and fathers, carers, primary bread winners for families. If those opposite really understood, they would side with our lowest paid workers and make their lives a little easier. But those opposite are not the ones negatively impacted by penalty rate cuts.

Labor does not accept the failed, flawed, sterile view of this country that says you reward those at the very top and hope that something trickles down to everyone else. It's clear to see that this government's priorities are utterly wrong. The last thing Australia needs is a cut to household budgets, which are already stretched to the last dollar. When corporate profits are at record highs and wages growth is at a record low, it is not the time to give multinationals a tax cut and workers a pay cut. Australians facing a cut to their penalty rates just want someone to fight for them. Well, guess what? That's exactly what Labor is doing.

Those opposite say we should just accept the decision of the umpire. We respect the Fair Work Commission—absolutely we do—but they've made the wrong decision in cutting Sunday penalty rates, and we will not stand idly by while Australia's lowest paid workers pay the price. A new Labor government will reverse this penalty rate cut and protect vulnerable workers from exploitation. I call upon the government and the crossbench to work with Labor, pass our amendments and leave this place with a significantly better bill. Our lowest paid and most vulnerable workers need legal protection from unscrupulous operators who are getting away with exploitation and theft. We should be making laws that protect the most vulnerable, not allowing these injustices to continue.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

I rise to oppose a bill with a dishonest name. It's the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. It doesn't promote fair work and it doesn't protect vulnerable workers. Like other industrial relations legislation, it destroys jobs and the lives of people who could fill those jobs. The bill raises penalties for paying a consenting adult $18 an hour, because the ban on low-skilled work, euphemistically called the minimum wage, is set at $18.29. This kills jobs, particularly for those unemployed Australians who are young, mature—or mature-ish, like me—disabled, have poor English or are fresh out of jail. Supporters of the minimum wage, to my left and right, are crushing the hopes of the most disadvantaged Australians. It is immoral.

The bill before us today also hits franchisors with $100,000 fines when someone else, a franchisee, does not comply with the fair work law, even though the franchisor does not know about, help or encourage the noncompliance. This is unjust. It's like a wrathful God incensed by the sins of the father and visiting them upon the son. It will also stop the franchise business model in its tracks. Australia will be forced back into the 1970s where, instead of a franchise restaurant or cafe, we ate at a local greasy spoon and, instead of ducking into an IGA to pick up some groceries, we would be lucky if we picked up a wilted lettuce at a dusty corner store. Businesses will become more and more reluctant to offer budding entrepreneurs a franchise, which is an easy way for them to start their own business. Instead, thousands of budding entrepreneurs will have to continue to work for the man, rather than become their own boss.

I will be moving amendments to soften the edges of this bill's attack on the franchise model. The Franchise Council of Australia, and many others, advised the Senate committee reviewing this bill that only those franchisors who influence their franchisees' employment arrangements should be held responsible for a franchisee's noncompliance with employment law. The Senate committee recommended consideration of an amendment along these lines. I will move such an amendment, to be co-sponsored by Senator Bernardi. My amendment will add a condition to the definition of 'responsible franchisor entity' so that not only does the franchisor need to have a significant degree of influence or control over the franchisee's affairs but also the influence or control must relate to the franchisee's compliance with workplace laws. It won't be sufficient if a franchisor only has influence over the size of the pickle in a franchisee's Big Mac.

My amendment will also make a corresponding change to the related civil remedy provisions. Currently, these provisions establish a contravention if the responsible franchisor entity knew, or could reasonably be expected to have known, that its franchisee would fail to comply with workplace laws. They also establish a contravention if a body corporate knew, or could reasonably be expected to have known, that its subsidiary would fail to comply with workplace laws. With my amendment, the contraventions would arise only if the franchisor or body corporate would know these things, or ought to know these things, in the ordinary course of business. So, if a franchisor hears from a loudmouth taxi driver that his barber said that he heard from his next door neighbour that the franchisee is paying below the minimum wage, the franchisor won't have broken the law simply because of these Chinese whispers.

This is a bill of the Liberal-National government and it is furiously supported by Labor and the Greens. These major parties pretend that fairness can be achieved by making a declaration in legislation rather than through voluntary deals struck between established businesses, budding entrepreneurs and workers. The Liberal Democrats stand against this madness. Just like the emperor has no clothes, the fair work system actually isn't fair.

Murray Watt (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 is a lame attempt by this government to deal with a real crisis that we're facing in this country, and that is the crisis of wage theft that is rampant across our economy and rampant across a wide variety of industries and is, as a result, seeing the gross exploitation of far too many working people in this country. The bill is a very belated effort by this government to deal with the unbelievable exploitation of workers that we witnessed occurring at the 7-Eleven chain of stores a number of years ago. It's been years since this exploitation was revealed by media outlets, and, for years, the Labor Party, trade unions and many others in our community have been calling this government for action. Now, finally, we see the government coming forward with legislation, which, to some extent, deals with these issues but doesn't go anywhere near far enough.

I'm very proud of the fact that the workers who were exploited by 7-Eleven were represented by my former law firm, Maurice Blackburn Lawyers. I pay tribute to the efforts of Giri Sivaraman and his team at Maurice Blackburn Lawyers, who took on these cases on a pro bono basis and, as a result of the legal action taken on behalf of these workers, have managed to extract, literally, millions of dollars in underpayments to workers, many of whom came to Australia on temporary visas. That work has gone some way to rectify the massive losses that these exploited workers suffered.

In the interest of time, I will give a couple of quick examples of the kinds of conditions that people working at 7-Eleven were experiencing. The first claimant commenced working at 7-Eleven on a bridging visa B. They worked at three different 7-Eleven stores between 2011 and 2014. In total, this claimant was underpaid over $180,000, including interest. At one store, the claimant was required to work many weeks unpaid, which the franchisee characterised as training. At each store, he was paid below the award rate. He was paid somewhere between $10 and $12 per hour, well below the award rate. He was not paid overtime, was not paid penalty rates, was not paid for all the hours worked and wasn't provided with rest or meal breaks. For some time, the claimant worked 60 or 70 hours a week between all three stores. At one point in time, he worked 110 hours in a week. The claimant received deliberately falsified pay slips that halved the hours he actually worked. He was robbed twice in one day by a man with a serrated knife, and he was forced by the franchisee to work the next day. So he was robbed by an armed robber twice in one day and then his franchisee at 7-Eleven turned around and robbed him again by underpaying him.

The second claimant that I'll mention worked at two different 7-Eleven stores between 2005 and 2006. This claimant was underpaid by nearly $100,000, including interest. At one store, he was required to complete 32 hours of unpaid alleged training. Money was deducted from his pay if customers drove off without paying for fuel. Can you imagine the cruelty of an employer who would actually do that to someone! Not only would the employer underpay them and not pay them for alleged training but, if their customers drove off without paying for fuel, they would also take that out of the worker's pay packet. At each store, this person was paid below the award rate, not paid over time, not paid penalty rates, not paid for all hours worked and not provided with rest or meal breaks. At one store he worked 12 hours a day, seven days a week for over six months. That's not to mention the fact that this particular claimant's wife was extremely ill with stage 4 cancer.

These are the kinds of stories that emerged as a result of media coverage of the disgraceful behaviour of 7-Eleven and the complete lack of responsibility taken by their senior management, the franchisors, in the behaviour of their franchisees. The thing I remember most from talking to my former colleagues at Maurice Blackburn who were working on the case was that, no matter how bad you thought the behaviour of 7-Eleven was—and it was absolutely abominable behaviour—in many instances, for those people they were acting for who were working at 7-Eleven, that was their second, better paid job, because they were working elsewhere getting even more exploited than they were at 7-Eleven. That gives you some idea of the scale of wage theft and exploitation that is happening in this country. But it's not just 7-Eleven where this is happening. We've seen many other exposes through the great work of people like Adele Ferguson and her team at Fairfax Media, exposing the behaviour of Caltex, BP, Pizza Hut and Domino's.

Some of the worst instances we've seen have been in the meat-processing industry, particularly a company called Baiada and the way that they have been treating their workers in North Queensland. This is not an issue that is restricted to one particular company or one particular business model being franchised; this is something happening right across our economy and right across every kind of employment relationship that we see. I have seen it myself, both on the Gold Coast and in Central Queensland, those being the two major parts of Queensland that I represent, and it's really got to stop.

The fact that this is happening beyond one business tells you that this is actually a business model that is being adopted by a large number of companies right around this country, and the only way they are staying in business and the only way they are delivering profits to their owners is by ripping off highly vulnerable workers. As I said, this bill is the government's alleged attempt to respond to this problem.

Now, I do welcome the changes that the government is making in this bill, but they go nowhere near enough to deal with the scale and breadth of problems that we are seeing happen in our economy through exploitation of vulnerable workers. This bill doesn't address the problems that we are seeing around sham contracting, where many workers, who any objective test of whether they are an employee or not would say that they are an employee and therefore entitled to the rights that come with employment—leave, superannuation and all sorts of other rights that come with being an employee—but instead these people are being treated as contractors and denied rights. The bill does nothing about that.

This bill does nothing about phoenixing, which we're seeing not only in the construction industry but in security, in cleaning and in a whole range of industries. This is where people are employed by one firm and underpaid—or not paid at all in some cases. Then the business is shut down overnight and the assets moved to another company, which starts operating the next day under a different guise, and the people who have worked there and have gone unpaid end up losing out.

This bill does nothing about the problems that we're seeing around exploitation of people through labour hire. Obviously, that is something I have spoken about on a number of occasions in the chamber, particularly in relation to the problems that we have seen in Central Queensland in the mining industry. People are being sacked from permanent employment and the very same day mining companies are bringing people on through labour-hire arrangements, paying them less pay and giving them worse conditions. This bill does nothing about that. It does nothing to stop the incredible growth in casualisation that we're seeing right throughout the economy as well, where people are finding it harder and harder to find permanent work. And of course this bill does nothing whatsoever to reverse the recent decision of the Fair Work Commission to cut people's penalty rates, which will have a dreadful effect not only on working people's budgets but on the economy overall.

Labor is going to step up to the challenge and is going to put forward some amendments in this debate that do try to deal with some of these other problems that we're seeing in the economy. We're going to put forward amendments which prohibit unreasonable demands for money by employers to prospective employees. This bill does go some way to stopping employers from demanding money be paid to them by current employees, with the threat hanging over them that if they don't pay that money they could be deported, lose their visa or lose their job. But this does nothing to stop employers from making the same kinds of threats and demanding money from prospective employees. Recently, we saw instances where a Domino's franchisee demanded around $150,000, I think it was, from someone in order to get a job. If they didn't pay that money, they weren't going to get the job and they were being threatened with immigration reprisals. One of the amendments that Labor is also going to put forward for this bill is to extend the liability of franchisors to labour-hire and supply chains.

This bill does do some good things in making franchisors liable, in some instances, for the actions of their franchisees. If their franchisees are underpaying their workers then, in some instances, franchisors will be held responsible. But we know very well—and every week new cases surface, whether they be in Central Queensland, the Gold Coast or other parts of Australia—that host companies are engaging dodgy labour-hire firms to bring people in on below-award illegal rates of pay and are getting away with it, because the workers who are brought in by these labour-hire firms are too scared to complain because they are in fear of losing their jobs. Currently, there is nothing in Australian law that stops a labour-hire company from doing that unless those laws are enforced. And currently there is no obligation whatsoever on a host employer to make sure that a labour-hire firm that they engage is doing the right thing and paying people the appropriate wages and conditions.

Big employers should not be allowed to get away with using labour-hire firms to underpay their workers. If a big firm—whether it be a mining company, a retail chain or whoever—engages a labour hire firm which then goes on to pay someone below the legal rates and conditions, then the host employer, the person who has engaged the labour hire firm, should be held responsible. The bill does nothing about that. It is time we took steps to correct firms who are doing the wrong thing. I'm very pleased that Labor will be moving amendments to that effect, and I look forward to joining the debate when we get to those amendments.

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I rise to make a contribution in respect of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. As previous Labor senators in this debate have indicated, whilst we are glad that the government has taken some tentative steps to address the issue, in the face of the egregious examples of abuse by certain franchise companies these steps are woefully inadequate. We have seen very many examples of this, and I will talk a bit about that as well.

This bill has been a long time coming. It does do a few things worthy of note. Among other things, it introduces a new civil remedy offence of 'unreasonably requiring an employee to spend or pay an amount of their money in relation to the performance of work'. The Senate committee inquiry in relation to the bill revealed stakeholder concerns that this new offence will not cover unreasonable demands made by employers to prospective employees as a condition of employment. This is of serious concern. This is a serious deficiency in the bill.

Additionally, as highlighted in the submission by Morris Blackburn—a firm that has a lot of experience representing workers, often on a pro bono basis—these proposed changes to the liabilities of franchisors do not go far enough. If we're talking about improving accountability and making sure workers are paid what they are owed, then these changes need to be stronger. The liability imposed by the proposed section 558B attaches only to a franchisor who is a responsible franchisor entity. The bill defines this as a franchisor that has 'a significant degree of influence or control over the franchisee entity's affairs'. In short, I believe this change will merely encourage franchisors to operate at arm's length from franchisees to ensure that liability does not apply under section 558B. This change would have the effect of merely allowing franchisors to distance themselves from the alleged underpayment but would do nothing to stop the underpayment from occurring.

Secondly, there are additional protections for franchisors if they take what's referred to as 'reasonable steps to prevent a contravention'. The prevention test describes it as 'the franchisor need only take pre-emptive action in advance of a contravention and will not be in breach of the provision if they fail to address the contravention once it has occurred or is occurring'. This is an obvious flaw as, after becoming aware of the contravention, a franchisor can in essence do nothing and escape liability if it otherwise meets the prevention test in section 558B. It's concerning that meeting this prevention test could be as simple as a franchisor advising a franchisee of their obligation through a simple 'tick and flick' checklist.

Given these weaknesses in the bill, it is my view that more scrutiny is warranted. And this is where we look at the egregious examples of abuse that came out in the 7-Eleven underpayment scandal. This profit-splitting arrangement, in which a franchisor took 57 per cent of profits made by franchisees and imposed a significant number of business expenses on the franchisees, actually incentivised franchisees' noncompliance with the act as a way of recovering profits they had surrendered to the franchisor.

I was listening to Senator Williams's contribution in relation to this matter yesterday. Senator Williams advocated a review of the franchising arrangements. My personal view is that that is something which could be accommodated. There are some questions to be asked in relation to the franchising model and protecting franchisees and, in turn, protecting the rights of workers employed by the franchisees. The courts are needed here to examine if the business model of the franchisor has substantially contributed to franchisees breaking workplace law. Sadly, even when we have worker exploitation occurring on an industrial scale, this government has remained absent. We only need to look at 7-Eleven's dastardly attempts to minimise what's owed to employees, who have clearly been overworked and underpaid, yet this government has done nothing but produce weak legislation that will only have a slight impact in stopping this situation from occurring again.

Victims of this scandal are still being short-changed. Prakash Kumar, who was underpaid hundreds of thousands of dollars at a number of 7-Elevens, was offered a payout under the new scheme that is $100,000 less than the amount he originally claimed for. Another former 7-Eleven worker Raj Desia was made an offer by the panel of $60,986 which was $16,000 less than the amount he was owed. As recently as 25 July, a 7-Eleven owner in Brisbane was personally fined $28,000 and his company fined $140,000 by the Federal Circuit Court after he was found to have underpaid eight staff and falsified records to cover their tracks. This is an absolutely disgraceful situation. Australians expect that our industrial relations system is going to protect vulnerable workers. When we have people coming into the country who are particularly vulnerable on visas, who are studying and who rely on their jobs in order to remain in the country, they particularly need to be protected. In the face of these egregious examples, we have a government which is not taking reasonable steps to address the issues. If the government was to get serious about assessing whether the franchisor has taken reasonable steps to ensure that exploitation doesn't occur, the bill should also require consideration of the vulnerability of workers to exploitation, such as young workers or workers on visas.

Submissions to the Senate Education and Employment Legislation Committee's inquiry into the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 identified the behaviour allegedly engaged in by a Domino's franchise where sponsorship for a working visa and a job was offered on the condition of payment of $150,000, as an example. While it would appear that particular pre-employment requirement for an up-front payment linked to the provision of a visa may be prohibited by other legislation, other unreasonable pre-employment requirements are not. Stakeholders from business and unions made submissions to the Senate committee inquiry, raising concerns about the lack of oversight in the bill for the proposed new Fair Work Ombudsman compulsory questioning powers. Whilst Labor supports giving the FWO the powers necessary to prevent, uncover and prosecute the exploitation and underpayment of vulnerable workers, we are also concerned that these powers are exercised appropriately. We really need to address this particular issue. Unfortunately, this legislation doesn't go far enough, and there are a number of amendments that Labor has in mind here. These will certainly improve the effectiveness of the bill.

I have been participating in the Education and Employment References Committee's inquiry into corporate avoidance of the Fair Work Act. I have heard numerous witnesses indicating to me that wage theft is now on the rise and is at historic levels in this country. It is quite clear to me that the Fair Work legislation is not working fairly for ordinary workers, particularly not for vulnerable workers. We need to have a thorough look at this issue. Unfortunately, the legislation we have before us at the moment is not going anywhere near addressing some of these issues. Senator Watt has touched on some of these issues. Other issues that should be looked at that require urgent attention are things like stopping sham contracting. I fully support any attempt to address that but, unfortunately, this bill doesn't go anywhere near that. Another issue is providing proper licensing for labour hire companies. Even the Franchise Council has indicated that the issues that came out, for example, in the 7-Eleven scandal, apply across the whole of the workforce, and the labour hire industry is also needing a bit of a shake-up. I note that the Queensland government has taken steps to introduce licensing arrangements here for labour hire companies, and we did start to look at this in relation to the backpacker tax at a federal level. There is also shutting down the practice of companies phoenixing to avoid wage liabilities; properly reforming the Fair Work Act to strengthen protections for workers; criminalising employer conduct that involves the use of coercion or threats during the commission of serious contraventions of the Fair Work Act in relation to temporary overseas workers; and making it easier for workers to recover unpaid wages from employers and directors of responsible companies.

Having said that, I won't use all the time available to me, in the interests of trying to get on with the job of getting this bill done in a proper way. But, as I say, a number of these exploitation issues go across the economy. We support this bill with amendments. Quite frankly, the bill is better than nothing, and on that basis I commend it to the chamber.

Malarndirri McCarthy (NT, Australian Labor Party) Share this | Link to this | Hansard source

I'm pleased to talk about the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 today to highlight a group of vulnerable workers in Australia who are paid less than the minimum wage and aren't covered by the Fair Work Act. They don't have federal occupational health and safety protections or workers compensation and they can't take annual leave, sick leave or carers leave. They don't get a fair day's pay for a fair day's work. More than 33,000 workers, because that's what they are, come under the Community Development Program. Of the 33,000, 31,000, or 94 per cent, are Indigenous, mainly living in regional and remote Australia. Because of where they live, and because they are mainly Aboriginal, these workers are out of sight and out of mind for the majority of Australians. This policy forces the overwhelmingly Indigenous population of remote communities into labour with none of the benefits of employment enjoyed by every other Australian worker.

The union movement is deeply committed to ending this discriminatory CDP policy. Kara Keys from the ACTU described it by saying:

This is a program which discriminates on the basis of race, and has no place in a modern society.

The ACTU looks forward to a future in which all Australian workers are treated equally, Indigenous people are not treated as second-class workers and are given the same opportunities and rights at work that any Australian worker rightfully expects.

The First Nations Workers Alliance has been launched to give a voice to this group of workers, a group who often don't have a voice, let alone a national presence. I will say a bit about CDP. Participants undertake activities, including hygiene classes, T-shirt dyeing and art making. Some participants have described this aspect of CDP as taking part in adult child care. There is very little of community development in the approach. Participants can also spend up to six months in a workplace, which the government describes as a long-term work experience opportunity. Basically, though, it's a pool of free labour for employers to access in remote areas, and those employers have none of the responsibilities that we would normally expect to their employees. The First Nations Workers Alliance is campaigning for wage justice, an issue that is at the heart of the labour movement. I congratulate the ACTU and the union movement across the board for their support of the First Nations Workers Alliance.

On the International Day of the World's Indigenous Peoples, Labor stands with Aboriginal and Torres Strait Islander peoples to recommit to delivering a greater say on issues that affect their lives. It is a day that we celebrated only recently. We've made it clear we support enshrining an Indigenous voice in our Constitution, because for too long First Australians have been excluded from the nation's birth certificate. Labor is committed to advancing the recommendations from the Uluru Statement from the Heart and the Referendum Council's report. Labor has clearly outlined a bipartisan parliamentary process to make this recognition a reality. We are committed to deliver practical, community-driven measures to help close the gap for Aboriginal and Torres Strait Islander peoples in every part of our national life, from education and employment to justice, housing and health. That's why we worked to set up the current Senate committee that is looking into the CDP.

I take this opportunity to thank all those organisations and individuals who've made submissions and will give evidence in the coming weeks to this inquiry. I'd like to share some of what people have already submitted. Mr Dereck Harris is chair of the Ngaanyatjarra Council, which delivers services to remote communities in WA just across the NT border. He makes it clear what happened when CDP replaced the old community development employment program: 'We feel the government stole our self-respect when CDP was taken away, and we will sink lower if we're forced to go on the healthy welfare card.'

People worked for CDEP because they got paid money, but under CDP they come in because they don't want their pay to get stopped. It is a punitive system that is clearly discriminatory, does nothing to foster job development and employment, exploits workers and fails to develop and empower remote communities socially or economically. This legislation is better than nothing, but being better than nothing does not make it as good as it could have been. It offers limited protections to vulnerable workers but, I suspect, nothing at all to our most vulnerable workers: those on CDP living in remote areas.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

As a servant to the people of Queensland and Australia, I rise through the Pauline Hanson's One Nation Party on behalf of the people of Queensland to support the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, protecting unpaid workers and other vulnerable workers. My focus is on two aspects. I will start with the problems this bill addresses, and there are four main problems.

First, we have seen reports of the deliberate and widespread underpayment of workers. These have been too common in Australia. Allegations of underpayment have been raised in relation to major corporations 7-Eleven, Muffin Break, Gloria Jean's, Subway, Caltex, Domino's and Pizza Hut and their franchises. Second, this conduct by certain businesses is enabled by inadequate penalties and ineffective laws which fail to deter law-breaking and make worker exploitation difficult for the regulator, the Fair Work Ombudsman, to prove. The ALP was responsible for creating the Fair Work Act. Third, underpayment of workers is unfair for workers but also for competing small businesses who do the right thing and face higher costs because they are complying with the law. Fourth, when someone abuses their power, whether it be union bosses intimidating small businesses or dodgy employers exploiting vulnerable workers, the government must and should take action.

So the solutions in this bill as we see them are targeting serious contraventions and making franchisors and holding companies accountable. The bill as we understand it will, firstly, amend the Fair Work Act to increase penalties by 10 times for serious contraventions of payment related protections in the Fair Work Act. This will apply when contraventions are systemic and deliberate. The bill will raise penalties for record-keeping requirements to make them consistent with penalties for underpayment of workers.

Secondly, it will outlaw cashback and other coercive behaviour by employers where employees may be paid correctly but then forced by their employer to repay part of their wages.

Thirdly, 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. We have also checked to make sure that, with regard to the varying franchisee/franchisor relationships, people who are not responsible won't be made accountable. This will hold accountable only those who are indeed responsible for payments.

Fourthly, it will strengthen investigation of underpayments by giving the Fair Work Ombudsman effective evidence-gathering powers and outlawing the provision of false and misleading information and the hindering and obstruction of inspectors who carry out investigations into compliance with the Fair Work Act.

It's quite clear, from the experience that many Australians have had and from the media reports, that these are urgently needed and necessary plugs in holes in Labor's Fair Work Act. While these are welcome, sadly, it only looks at one side of what makes workers vulnerable: underpayment. And I want to speak on behalf of vulnerable workers, because, including workers—

Debate interrupted.