One of the great disappointments of the Productivity Commission (the Commission) Report into Australian workplaces undertaken in 2015 was that the Commission appeared to proceed on the assumption that their ultimate goal was to enhance the arrangements of employers and government and simply ignore any employee unfairness. Accordingly, readers may recall that the Commission recommendations to government focussed on reducing penalty rates for all employees, further reductions in award entitlements, making it more difficult for trade unions to engage with members and proposing substantial increases in penalties for both trade unions and employees.
Interestingly the Commission undertook its review at a time when there were a number of well publicised examples of employees being exploited by well-known Australian companies. These included:
• Myers employing their cleaning staff as sub-contractors resulting in the cleaners being paid below the award wage, been denied penalty rates and not getting their superannuation entitlements.
• The well-publicised exploitation of overseas workers at 7 Eleven stores throughout Australia involving the underpayment of wages, the doctoring of pay records and the intimidation of employees.
• Pizza delivery drivers being paid at $6 per hour in bogus contracting arrangements.
• The widespread exploitation of migrant workers in the agricultural and the food processing sectors being required to work dangerously long hours for less than the award wage.
Sadly, despite these blatant examples, they were ignored by the Productivity Commission and, to date, there has been no positive action by the federal government.
Given the foregoing it was very pleasing to hear the announcement the ALP opposition is pursuing changes to the current laws specifically targeting dishonest employers who exploit employees. The changes, set out in the Fair Work Amendment (Protecting Australian Workers) Bill 2016, were introduced into the Parliament in March 2016.
The Bill seeks to change existing industrial laws in a number of significant ways designed to discourage the mistreatment of vulnerable workers such as:
• strengthening the test for sham contracting;
• making company directors liable for wages owed to workers as a result of ‘phoenixing’;
• increasing the penalty for companies (other than small businesses) that intentionally contravene provisions of the Fair Work Act relating to terms and conditions of employment;
• introducing criminal offences for serious contraventions of the Act;
• clarifying that the Fair Work Act applies to all workers irrespective of their immigration status.
While we support all of these improvements, the ANMF is particularly pleased the Bill seeks to introduce changes to prevent employers escaping liability through ‘phoenixing’, by making directors of companies personally liable for debts in relation to outstanding entitlements owing to workers. Broadly speaking ‘phoenixing’ involves the transfer of assets from one company with debts to a new company to avoid paying creditors, tax or employee entitlements. Existing debts are left with the old company, often placing that company into administration or liquidation, leaving nothing to pay wages and other accrued entitlements. Meanwhile, a new company, often operated by the same directors and in the same industry as the old company, continues the business under a new structure. By engaging in this illegal practice, the directors avoid paying debts, including outstanding wages and other entitlements owed to workers.
This dodgy practice has become much more widespread over the last 10 to 15 years across the Australian economy, including in health and aged care, and must be stamped out.
The ANMF is also pleased to see that the Bill seeks to improve protections for overseas workers. Overseas workers are ripe for exploitation and there have been numerous examples of this. Foreign workers here illegally are presently unable to take action under Australian laws to recoup underpayment of wages. And while many may believe that ‘illegals’ should not be protected, it is important that Australian laws remove any incentive for employers to favour the employment of illegal workers over legal workers.
It is important our laws treat all workers equally. This is in the interest of foreign and local workers because in the long run the exploitation of foreign workers undermines wages and conditions for everyone.
The Bill to be debated in the Parliament seeks to rectify a number of serious shortcomings in our industrial laws that are long overdue to be fixed. And with industrial relations again shaping up as a battleground in the 2016 federal election it is incumbent on all political parties to reveal how Australian workplace laws will be fair and balanced for all.
The ANMF will watch with interest.
By Nick Blake
Senior Federal Industrial Officer