Uniting Church Submission to Victorian Labour Hire Inquiry Nov 2015

ProfessorAnthonyForsythInquiryChair

VictorianInquiryintotheLabourHireIndustryandInsecureWorkE-mail:

130LittleCollinsStreetMelbourneVictoriaAustralia,3000

Telephone: +61-3-92515271

Facsimile: +61-3-92515241

SubmissionbytheJusticeandInternationalMissionUnit,SynodofVictoriaandTasmania,UnitingChurchinAustraliatotheVictorianInquiryintotheLabourHireIndustryandInsecureWork

November2015

TheJusticeandInternationalMission UnitoftheSynodofVictoria and Tasmania, UnitingChurchinAustralia,welcomesthisopportunitytomakeasubmissiontotheVictorianInquiryintotheLabourHireIndustryandInsecureWork.TheUnithasspentmanyyearsworkingfortheeradicationofhumantraffickingandforcedlabourglobally,workingwithmanynon-governmentorganisationslocatedoverseas.However,theUnitnotesthathuman trafficking and forcedlabourdoesoccurinAustraliainsomeindustries,suchasagriculture,constructionandhospitality.

TheUnitnotesthatcommontomanycasesofhumantraffickingandexploitationofemployeesontemporaryvisas:

• Isthepresenceofalabourhirebusiness;
• TreatingtheemployeesasindependentcontractorsinanattempttoavoidhavingtoprovideAwardpayandconditions;
• Usingthepromiseofsponsorshipofanapplicationforpermanentresidencyasameanstomanipulatemigrantworkersintoacceptingillegalpayandconditions;and
• Failuretopaypenaltyrates.

Toourknowledge,therearealsocasesoftemporaryvisaholdersbeingmisinformedoruninformedabouttheirrightsandobligations,particularlyasitrelatestosuperannuation.Misinformedworkersareunknowinglybeingshammedoutofallorpartsoftheirsuperannuationfunds,whichareinsteaddirectedtocommonbankaccountsoftheemployer.

TheUnitisconcernedatthelevelofundetectedexploitationandhumantraffickingoftemporaryvisaholdersinAustraliaandisconcernedthattherelevantlawenforcementagencieslackadequateresourcestodealwiththescaleoftheproblem.Thus,theUnitfavoursfurthermeasurestodetertheexploitationoftemporaryvisaholdersanddisrupttheabilityofabusivelabourhirebusinessesandemployerstomakeprofitfromtheirabuses.

Recommendations

TheUnitmakesthefollowingrecommendations:

• Victoriaintroducealicensingschemeforlabourhirebusinessesinselectedindustrysectorswherethereisevidenceofsignificantlevelsofhumantrafficking,forcedlabourand/oregregiousexploitation.Suchsectorsshouldincludeagriculture,foodprocessing,construction,hospitalityandlaundries.
• Thatthebodyreceivingtheservicesofalabourhirebusinessbeheldjointlyresponsibleforthetreatmentofemployeesbyanylabourhirebusinesscontractedbythebody.Thebodyusingtheservicesofalabourhirebusinessshouldberequiredbylawtotakereasonablestepstoensurethatanylabourhirebusinesstheyobtainemployeesfromiscomplyingwithalllegalrequirementsaroundthepayandconditionsoftheemployees.
• TheVictorianGovernmentshouldrequirelabourhirebusinessesinsectorswheretherehasbeensignificantlevelsofhumantrafficking,forcedlabourand/oregregiousexploitationtohavetointroduceemployeesontemporaryworkvisastoanon-governmentorganization(includingunions)thatisabletoassistthemigrantworkerunderstandtheirrightsandresponsibilities,asisthecaseinIrelandfordomesticworkers.Thiswouldactasasignificantprotectivefactoragainsthumantraffickingandexploitation.Itshouldbeaciviloffenceforthelabourhirebusinesstofailtofacilitatesuchcontactbetweenthetemporaryvisaholderandthenon-governmentorganisation.TheVictorianGovernmentshouldestablishapubliclistofnon-governmentorganisationswillingtoprovidesuchsupportandthatitassessesarequalifiedtoprovidesuchsupport.
• AllmigrantworkerscomingtoVictoriashouldbeprovidedwithinformationabouttheirrightsandresponsibilitiesinalanguagetheyunderstand.Theinformationshouldincludehowtoseekhelpfrombothrelevantgovernmentauthorities andnon-government organisations.Thisshouldalsoincludeaccesstofreelegaladvicebyphone.

TableofContents

Recommendations...... 2

TheNeedfor AdequateRegulation...... 3

Human Trafficking intoAustralia forthepurposesoflabourexploitation...... 4

Case Examples...... 5

LicensingSystemforLabour Hire Businesses...... 12

PreviousReviewofTemporary MigrantWorker Visas...... 16

TheNeed forAdequateRegulation

Inourexperience,bothinAustraliaandinternationally,labourhirebusinessesappeartocarryahigherriskofbeinginvolvedinhumantraffickingthanotheremployers,especiallyinweaklyregulatedenvironments.

TheInternationalLabourOrganisation(ILO)hasnoted:1

Whenlaborregulationandlaborinstitutionsareweak,limitedtocertainsectorsorcategoriesofworkers,someemployerswillbeableeithertoimposeunfavorableconditionsofworkortoviolateexistinglaboragreementstotheiradvantage.Ourempiricalevidencesuggeststhat,if circumstances permit, some employers willultimatelyturntotheuseofcoercionandtreatthepaymentsofwagesasdiscretionary.

Further,theILOhashighlightedtherolelabourhireandlabourrecruitersoftenplayinhumantraffickingandforcedlabour:2

Often,theserecruitersoperateinalegal vacuumorinanenvironmentofimpunity,whereabusesare notinvestigated and prosecuted. Thismakesitrelatively easy todeceiveworkersaboutthenatureofthejobs,thewages,andlivingconditionsthatareproposedina distant placeof employmentoraboutthefeesthat havetobepaid.Deceptionisthemostcommonlyusedmeansofrecruitingworkersintosituationsofforcedlabor.Thetruenatureandcharacteristicsof jobs canbeconcealedbecauserecruitersoftenhaveamonopolyoveremployment-relatedinformation.

TheILOhasfoundthatinEurope:3

….deceptiverecruitmentmechanismsandexploitativesystemsofsubcontractingarekeyfactorsinunderstandingthevulnerabilityofmigrantworkerstoforcedlaborexploitation.Weaklabormarketregulationsorenforcementandthelackofprotectionaffordedtoirregularmigrantworkersprovideincentivestoemployersandintermediariestouseabusivepractices.Easyprofitscanbemadethroughdeceptivejoboffers,illegalwagedeductions,ornonpaymentofwages.Someoftheexploitationisorganizedbysophisticatedcriminalnetworks,butinthemajorityofcases,theexploitationoftraffickedmigrantstakesplaceinthecontextofsmall-scalescamoperations.Throughcomplex

1BeateAndreesandPatrickBelser(eds.),‘ForcedLabor.CoercionandExploitationinthePrivateEconomy’,ILO,LynneRiennerPublishers,Boulder,Colorado,USA,2009,p.3.

2BeateAndreesandPatrickBelser(eds.),‘ForcedLabor.CoercionandExploitationinthePrivate

Economy’,ILO,LynneRiennerPublishers,Boulder,Colorado,USA,2009,p.4.

3BeateAndreesandPatrickBelser(eds.),‘ForcedLabor.CoercionandExploitationinthePrivateEconomy’,ILO,LynneRiennerPublishers,Boulder,Colorado,USA,2009,pp.89-90.

subcontractingsystems,traffickingpenetratesmainstreameconomicsectors,suchasagriculture,construction,ortheserviceindustrywherethereishighdemandforcheapandexploitablelabor.Mostmigrantworkerswhoworkunderhazardousconditionsforlowpayandwithoutprotectionfromlaborlawarenotforcedtoworkatgunpoint.ThereisalargeenoughpoolofmigrantswhoarewillingtotakehighriskstoenterEuropeandwhoaredeterminedtomaketheirjourneyasuccess.Butnotallofthemsucceed,andsomefallvictimtovariousformsofcoercion.Thosewhodemandabetterbargainfortheirlaborarequicklyreplacedbymoredocileworkers.

TheILOhasfoundthatinthecaseofEurope“thosemigrantsrelyingonanunspecifiedintermediaryratherthantheirownfamilynetworksorformalrecruitmentstructuresaremorelikelytobeabusedduringtherecruitmentprocessaswellasinemployment.”4

HumanTraffickingintoAustraliaforthepurposes of labourexploitation

MostpeopleidentifiedbyashavingbeentraffickedintoAustraliaaregirlsandwomentraffickedforthepurposeofsexualexploitation.However,traffickingalsoincreasinglyoccursinotherindustries.5TheprecisesizeofAustralia’slabourtraffickingproblemisdifficulttogauge,withconfirmed“instancesofunreportedand/orperhapsunrecognisedlabourtrafficking”.6Theincentivesfortheemployerarehighwithreducedwagesmeaningincreasedprofits.

TheAustralianInstituteofCriminologyhasassessedthatexploitationofmigrantworkerscanbe“characterisedaslow-risk,high-profitactivities”.7Workersontemporaryworkvisasoftenonlyreportissuesasalastresort,when“they literallycouldnotremaininthatsituation eitherbecauseofseriousinjuryorfearabouttheirpersonalsafety”8,astateofaffairsthatunderlinesnotonlythehugeimportanceofsupportservicesbutalsohowtoinformtemporaryworkvisaholdersoftheiravailability.

TwootherfactorsareparticularlysignificanttotheexploitationofmigrantworkersinAustralia:9

• Agents’feesandassociateddebtwhereanoverseasagentwillchargelargefeesinthehomecountrytofacilitateaccesstoalegalorillegalvisaortoassistinlinkingapotentialmigrantwithajob.Migrantsmaygointosignificantdebttopaythesefees,whichrendersthemmorewillingtoacceptsubstandardconditionsinordertoearnmoney.
• Permanentresidency,whichmanytemporaryworkvisaholdersaimforinthelongrunratherthanwages.Employerscanholdtheoffer,genuineornot,ofeventualsponsorshipforsuchresidencyinreturnformigrants’compliancewithsubstandardorexploitativeworkingconditions.

Theconstructionindustryisasectorwhere“veryseriousinstancesofexploitation”10oftemporaryworkvisaholdersoccurs.Alargeproportionoftheseinstancesinvolveworkerson

4BeateAndreesandPatrickBelser(eds.),‘ForcedLabor.CoercionandExploitationinthePrivateEconomy’,ILO,LynneRiennerPublishers,Boulder,Colorado,USA,2009,p.94.

5JoudoLarsen,J.,Renshaw,L.,Gray-Barry,S.,Andrevski,H.,Corsbie,T.Traffickinginpersons

monitoringreport:January2009-2011,AICReportsMonitoringReports19,2012p.4

6 FionaDavid,Labourtrafficking,AICReportsResearchandPublicPolicySeries108,2010,p.xii 7FionaDavid,Labourtrafficking,AICReportsResearchandPublicPolicySeries108,2010,p.xiii8FionaDavid,Labourtrafficking,AICReportsResearchandPublicPolicySeries108,2010,p.xiii9FionaDavid,Labourtrafficking,AICReportsResearchandPublicPolicySeries108,2010,p.xi

457visas.Some,however,involveworkersindifferentsituationssuchasyoungpeoplefromtheCookIslandswhohadNewZealandpassportssohadnorequirementtoobtainavisatoliveandworkinAustralia.

Nursing,manufacturingandthemeatindustryareotherindustriesexperiencingsimilarexploitationof457visaholders.TheAustralianInstituteofCriminologyhasreported thatabattoirsaredescribedasbeinga‘profoundlyrichterritoryforexploitation’11bothbecauseofthenatureoftheindustryitselfbutalsobecausethemigrantsthatarebeingemployedcomefromcountriessuchasNigeria,thePhilippines,ChinaandKoreaandtheywouldhavebeenonverylowsalariesevenintheirowncountries.Evenastheygainabetterunderstandingofindustrialconditionsovertime,theyareunwillingtotrytoenforcetheseduetothethreatofbeingdeported.

DomesticworkersinAustralianumberrelativelyfewbut“appearedtofeaturedisproportionatelyin theinstancesofmoresevereforms ofworkplaceexploitation”.12Theyusuallyhave verylimitedsupportnetworksandliveandworkinthefamilyhouseholdareusuallydependentontheiremployerforallaccommodation,foodandtransportation,makingthemextravulnerable.

Theagriculturalsectorisalsovulnerabletohumantraffickingandgrossexploitationoftemporaryworkvisaholders.The AustralianWorkersUnion(AWU)haspubliclyexpressedconcernexploitationofforeignworkersisrifeinthe fruit picking industry.13 AWU VictorianbranchsecretaryBenDavissaidlabour-hirearrangementswerebecomingmorecommoninthefruitpickingindustry."Thegrowersthemselvesdon'tactuallyknowwhatishappeningatthepointofpaymenttotheemployee,"hesaid.TheFairWorkOmbudsmansaiditwassteppingupitsinvestigationsofemploymentarrangementswithinthefruitpickingindustry.14Someofthelabourhirebusinessesthatareengagedinillegalexploitationofmigrantworkersarecontrolledbysophisticatedorganisedcrimesyndicates.Illegalrecruiterstendtooperateasshellcompaniestomaskillegalfundsand,ifcaught,continueoperationsunderanewAustralianBusinessNumber(ABN).

CaseExamples

ThefollowingareexamplesinvolvingstrongallegationsofexploitationorhumantraffickingofmigrantworkersinAustralia.

Carabooda

On3May2014,amulti-agencygovernmenttaskforce,OperationTricord-Polo,raidedamarketgardenpropertyinCarabooda,WesternAustralia,inresponsetoaninvestigationintointernationalmoneylaunderingandtheuseofundocumentedforeignworkers.Giventhatmainfocusoftheinvestigationandsubsequentraidswasonmoneylaundering,15 theforeignworkers

10FionaDavid,Labourtrafficking,AICReportsResearchandPublicPolicySeries108,2010,p.2911FionaDavid,Labourtrafficking,AICReportsResearchandPublicPolicySeries108,2010p.3312FionaDavid,Labourtrafficking,AICReportsResearchandPublicPolicySeries108,2010,p.39

13

hour/6001218 accessed06/01/2015

14 accessed06/01/2015

15

heldaftertheraidwerenotassessedasvictimsofforcedlabour,normodernslavery.Instead,themajorityofthe200workersrescuedintheraid,andsubsequentraidsonneighbouringbusinesses,weretakentoYongahHillDetentionCentreanddeported.16While,manyoftheworkerswereidentifiedasunlawfulnon-citizens(UNC’s),itneedstobeaskediftheywerewillinglydisobeyingthetermsoftheirvisa,oriftheywerecoercedanddeceivedtodoso.

Thereareindicatorsthatworkersidentifiedintheraidwerevictimsofforcedlabour.Redflagsinclude:excessivesecurityattheproperty17whichmayhaveledtorestrictionsonfreedomofmovement;situationsofdebtbondage;18passportsretainedbythecompanyandnotinworkerspossession;harbouringofworkers;19andpotentialcasesofexcessivewagedeductionsforaccommodation,transportationandmeals.20Onereportsuggeststhat“handbookdetailingthemethodsusedtokeepworkerssubduedthroughintimidationanddegradation”wasfoundduringtheraid.21

UnderAustralianlaw,suchactionsarecriminaloffences.TheAustralianCriminalCode,Division

270onSlaveryandSlaverylikeconditions,Section7,Deceptiverecruitingforlabour orservices,outlinesthataperson(therecruiter)commitsan offenceiftheworker(victim)isdeceivedabout:

(c)(i)theextenttowhichthevictimwillbefreetoleavetheplaceorareawherethevictim provides the labour or services; or

(ii)theextenttowhichthevictimwillbefreetoceaseprovidingthelabourorservices;or

(iii)theextenttowhichthevictimwillbefreetoleavehisorherplaceofresidence;or

(iv)ifthereisorwillbeadebtowedorclaimedtobeowedbythevictiminconnectionwiththeengagement—thequantum,ortheexistence,ofthedebtowedorclaimedtobeowed; or

(v)thefactthattheengagementwillinvolveexploitation,ortheconfiscation of thevictim’straveloridentitydocuments.

TheworkersshouldhavebeengrantedtheopportunitytoseeklegaladviceinAustralia,assessediftheywerevictimsofhumantraffickingandbeallowedtopursuecompensation,ifeligible,beforeanydecisionwastakentoremovethemfromAustralia.

RayingHoldingPtyLtd22

InMarch2014,theFairWorkOmbudsmancommencedlegalproceedingsagainstlabourhirecompanyRayingHoldingPtyLtdandanotherindividual,allegingthatten employees at aregionalNSWabattoirwereunderpaidmorethan$41,000forvariousperiodsoftimeworkedbetweenMarch2011andJuly2013.Eightemployeeswerecasuals–Chinesenationalshere

16

17

18

19

20

21

22

onshort-termvisas-whiletheremainingtwowereChineseimmigrantswhowereemployedfull-time.

RayingHoldingallegedlysuppliedtheworkerstothePrimoAustraliaSconeAbattoir,operatedbyHunterValleyQualityMeatsPtyLtd.TheFairWorkOmbudsmanisseekingCourt-issuedpenaltiesagainstboththecompanyandanotherindividualallegedlyinvolvedintheunderpayments.CourtdocumentsallegethatRayingHoldingoftenrequiredtheemployeestoworkmorethan38hoursaweekbutdidnotpayovertimepenaltyrates.TheFairWorkOmbudsmanalsoallegesthatRayingHoldingwasinvolved in sham contracting (byrepresentingtothetwofull-timeemployeesthattheywereindependentcontractors)andbreachedrecord-keepinglaws.23

BosenPtyLtdAnor

InFairWorkOmbudsmanvBosenPtyLtdAnor(Magistrates’CourtofVictoriaIndustrialDivision,21April2011)thecourtorderedback-paymentto7-Elevenfranchiseeemployeesonstudentvisaswhohadworkedhoursinexcessofthosepermittedbytheirvisas.

GloriaJeansFranchiseinMelbourne24

InFebruary2015,$80,000wasawardedagainstPrimeagePtyLtd,whichoperatesaGloriaJeansfranchiseinMelbourne,and$17,500and$13,000awardedagainstTsinmanFuandPingOstrovskihfortheirroleinpaying22casualemployees,manyofthemoverseasstudents,aslittleas$8anhour.Theemployeeswerefoundtohavebeenunderpaidatotalof$83,566betweenJuly2011andApril2013.

Migrantworkerat7-EleveninBrisbane25

TheFairWorkOmbudsmancommencedlegalactionagainstMubinUlHaider,theownerandoperatorofa7-ElevenretailstoreinBrisbaneuntilitclosedlastyear.Hewillfacecourtforallegedlyunderpaying anoverseasworkermore than $21,000overa periodof13monthsbetweenJanuary2013andFebruary2014,andrefusingtoco-operatewithFairWorkinspectors.Hiscompany,HaiderEnterprisesPtyLtd.,isalsofacingcourt.

Theemployee,fromNepalandagedinhislate20s,wasavisaholderwhenhecommencedworkingforHaiderandisnowapermanentresidentofAustralia.Haiderfaces maximumpenaltiesbetween$5,100and$10,200perbreachandhiscompany$25,500to$51,000perbreachandaCourtOrderisalsobeingsoughtforthecompanytoback-paytheemployeeinfull.

ThisisnotthefirsttimeHaiderhasbeenintroublewithlawenforcement.26Therewasacourtdecisionon 15 August 2014 at theMigration Review Tribunal of Australia that upheld a

23

24AustralianGovernment,‘TraffickinginPersons.TheAustralianGovernmentResponse1July2014–30June2015’,2015,p.44.

25

2015/20150209-haider-litigation9February2015 accessed11/03/2015

26

decisionto"bartheapplicantfromsponsoringmoresubclass457visaemployeesfor2yearsfromthedateofdecision"duetounderpaymentofotherstaffmembers(on457visasfromIndia),lackofwagerecordsandlackofco-operationwiththeDepartmentofImmigrationregardingtheseissues.

FruitPickingCase27

AVictorianmanwasreportedtobeunderinvestigationoverallegationshehasexploitedbackpackersworkinginthefruitpickingindustry,payingthemaslittleas60centsanhour.TheFairWorkOmbudsmanreceivedseveralcomplaintsabouttheMilduraoperatorjustbeforeChristmas,includingallegationsofsexualharassment.

CraigBildstein,aDirectorwiththeOmbudsman'sOffice,saidtherewerealsoreportsthemanhadcrammeddozensofworkersintoonehome,andanother12inagarage.

"Thesuggestion'sbeenputtousthatbackpackersarebeingchargedupto$150aweek,withreportedlyupto32peoplebeingaccommodatedinonehomeandadozenorsomoresleepinginthegarage,"hesaid.

Themanallegedlychargedworkersa$450feetofindthemajob.Ithasalsobeenallegedthemanhadbeenbullyingandsexuallyharassingsomeoftheworkersontheproperty.

MrBildsteinsaiditwasnotthefirsttimetheFairWorkOmbudsmanhadreceivedcomplaintsabouttheoperator."Theallegationsthathavebeenputtousincludebullying,sexualharassmentandrippingthemofftothetuneofhundredsofdollars,"hesaid.

"Someofthesemattersareobviouslyoutsideourjurisdiction,butclearlywhereweidentifythesematterswedopassthemontheappropriatelocalauthorities[and]thatmightbethepolice."

VernviewPtyLtd

InappearingbeforetheJointStandingCommitteeonMigration,SusanFinger,aDirectorofVernviewPtyLtd,afarm65kmfromMelbourne,gaveevidenceofherexperienceofdealingwithalabourhirebusiness:28

MrsFinger:Weexpectedthem[theemployeesofthelabourhirebusiness]tobepaidtheawardratebecausethatiswhatwehadbuiltthecontractedpricefrom,anditisverydisappointingtohearthatnotonlyweretheworkersbeingrippedoffbutwewerebeingrippedoffas well,andmostlikelytheAustralianGovernmentwasbeingripped offbecausetheywouldnotbereturningPAYG,andIdonotthinktheywouldhavebeenpayingsuperannuationandtheyprobablywerenotpayingworkerscompensation.Soeveryonewasbeingrippedoffbythesepeople.

Chair:Whatwasthenameofthecompany?

MrsFinger:IthinkWoolleyTradewasthename.

Chair:Dotheystillexist?

27 accessed06/01/2015

28JointStandingCommitteeonMigration,’SeasonalWorkerProgramme,ProofCommitteeHansard’,Melbourne,28October2015,p.21.

MrsFinger:Iamnotsurebecausewehavenotengagedthemforfourorfiveyears.Someoftheselabourhirecompaniesphoenixthemselves.

Chair:Canyouspelloutthedifferencebetweenwhattheywerepaidandwhattheawardwasandwhatyoupaidandwhat–

MrsFinger:Ihavegotnoidea,Iamsorry.Buttheyweresurprisedtohearwhattheyweresupposedtobepaid.Atthatstagetheawardratemighthavebeen$17.Theyweresurprisedthattheyshouldhavebeengetting$17.

MrCraigKelly:Doyouthinktheyweregettinghalfofit,orweretheygettingsubstantiallyless?

MrsFinger:Ithinkitwassubstantiallyless,andIthinkthatthatmighthavebeensomeofthereasonwhysomeofthemdisappeared.Theythoughttheywerebeingtakenbythesepeople.

AgriculturalSectorCase29

InMarch2014itwasexposedbyTheWeeklyTimesthatoverseasworkersatCovinoFarmsinLongford,oneofVictoria’slargesthorticultureoperations,wereunderpaidandaskedtoworklonghourswithsomeworkingupto16perdayday.CovinoFarmsconfirmedthatmanyofitsoverseasworkersweresuppliedbycontractcompanies.

Fourformerworkersallegemostinternationalworkerswerepaidabout$12-$13anhourincashinsteadofthehorticultureawardforcasualemployeesof$20.46-$23.83anhour.Someinternationalworkersreceivednosuperannuationandhadnoincometaxtakenoutoftheirpay.AformerworkersaidmanyMalaysianworkerswereonworkingholidayvisasandsomeIndianswereonstudentvisaswithmanynothavingthecorrectworkvisa.Assome workers onlegitimatevisaswerepaidcashtheyhadnoproofoftheirworkinAustraliawhichmeanstheycan’tapplyforthesecondyearoftheirvisa.

ManyoftheworkerslivedinhousesinSalewhichoftenhadupto20peopleinoneresidencewhereeachpersonwascharged$80-$100perweek.Theywerealsoallegedlycharged$9-$12tobetransportedthe15kmfromSaletothefarm.

CovinoFarmshasalsobeenthesubjectofnumerouscomplaints,34improvementnoticesandoneprohibitionnoticefrom theworkplacesafetywatchdogsince2007.ThefarmhasbeenraidedbytheDepartmentofImmigrationandBorderProtectionseveraltimeswithtwoworkersbeingsenthomeduetohavingincorrectworkvisas,andonewhoreturnedwithadifferentnameonhispassportafterhavingbeenpreviouslydeported.30

TheDepartmentofImmigrationandBorderProtection,theFairWorkOmbudsmanandWoolworthshaveallsinceinitiatedseparateinquiriesintoCovinoFarms’allegedpractices.Inresponse,CovinoFarmshasvowedtoimproveitspractices,conductaninternalinvestigationandplannedtocrackdownonthelabourhirebusinessesthatprovidedmuchofitsworkforce.31

29E.Field,‘Questionssurroundfarm’sforeignlabour’,TheWeeklyTimes,26March2014pp.14-15 30E.Field,‘Questionssurroundfarm’sforeignlabour’,TheWeeklyTimes,26March2014pp.14-15 31E.Field,‘Farmworkersprobe:Horticultureoperationunderfireoverallegedillicit,unsafepractices’,

AustraliaPost32

MediareportedinAugustthattheheadofalabourhirebusiness,BaljitSingh,andbusinessassociatesRakeshKumarandMukeshSharmawerearrestedbytheAustralianFederalPolice.Itwasallegedthe menheadedasyndicatethatlured IndianstudentstoAustraliaon thepretenceofstudyingatMrSingh’strainingcollegeinMelbourne’snorthernsuburbs.Thestudents,whowereoftenpromisedworkingvisaorpermanentresidencyattheendoftheirstudies,receivednoeducationbutweresubcontractedtoAustraliaPosttoworkonsubstandardwagesandconditionstodelivermailorasdeliverycentrestaff.ThesyndicatewasallegedtohaveprovidedfakestudentvisastoenablecontractworkerstoobtainsecurityclearancetoworkatAustraliaPost.

Internationalstudentswereallegedlychargedupto$10,000toattendMrSingh’sbusinesstrainingcollege.StStephenInstituteofTechnology.TheAustralianFederalPolicewerereportedtosaidthecollegeshadchargedmorethan$9millioninfeestointernationalstudentsaswellasclaimingapproximately$2millioningovernmentfundingbecauseoftheirRegisteredTrainingOrganisationstatus.

RobinvaleArea

AretiredministeroftheUnitingChurchintheRobinvaleareahasreportedcasesofexploitationofpeopleontemporaryworkvisasinLakeBoga,Nyah,Tooleybuc,RobinvaleandEuston.Theministerreportedthatthepeopleontemporaryworkvisasweresubjectedtointimidation.

TheSalvationArmy-FreedomPartnershiptoEndModernSlavery(SafeHouseforTraffickedWomen)

ASouthAsianwomanwasluredintoservitudebyacountrymanlivingasaresidentinNSW,operatingacontractcleaningservice.ThemanrecruitedherthroughcommunitynetworkswiththepromiseofmarriageandlifeinAustralia.Thoughshebelievedshewasenteringintoalegitimatemarriage,whenshearrivedinAustralia,shewasforcedtolivewithandserve15men,whowereworkingforherhusbandascleanersandlivinginhisresidence.Shewasmadetoworkasacleanerforthebusinessaswell.Sheworkedsixdaysaweekforapproximatelysixmonthsand,inadditionaltothecontractcleaning,didalltheshopping,cooking,andcleaningfortheotherworkers.Sheenduredextensiveverbal,emotionalandphysicalabuseandwasthreatenedwithdeportationandshamingfornotfollowingherhusband'sorders.Shereceivednopaymentforherwork.

Whenshefinallydecidedtoleavethesituation,shewasfoundcryingonaparkbenchbyapersonwhospokeherlanguageandreferredhertothepolice.ThepolicereferredhertoadomesticviolenceservicewhorecognisedtheindicatorsofservitudeandreferredhertoTheSalvationArmy.Shewassofearfulofherhusband/employer,sherepeatedlyrefusedtolodgeacomplaintwithFairWorkorspeaktotheAFPHumanTraffickingTeam.Shesaid,"Ihadnoideatherewashelpforme.IfIhadknown,Iwouldhaveleftmuchearlier."

CasesofAbusesonMigrantWorkersDocumentedandAssistedbyMigranteAustralia,aFilipinomigrantcommunityorganizationinVictoria

32ThefollowingcasestudyistakenfromKatherineTowers,‘Chargesoverpostielabour-hire‘scam’’,TheAustralian,6August2015,p.3.

Forthefollowingcasestudies,therealidentitiesofworkersandemployershavebeenchanged/omittedforthepurposesofconfidentiality.

Case133

AntoniosayshewasluredtoAustraliawiththepromiseofpermanentresidency."Thepromisewasstayingherefortwoyearswillmakeusapermanentresidentanddaysturnedtoweeks,weeksturnedtomonths,monthsturnedtoyears."

WhatdideventuateforAntoniowasacleaning jobattheMCGforallegedlybelowawardwages.Heleftafterjusttwoshifts.

Fredericohadasimilarexperience.IntheoneshifthedidinAugustlastyearhewastoldtogohomeearlymeaningheworkedonlytwohours,inviolationoftheminimumshiftrequiredunderworkplacelaws.

"Manypeopleareworkingtonightthat'swhywe'regoingtofinishthisearlysowehadatwohourjobpickinguprubbishatnightattheMCGandIdon'tliketheideathat'swhyIdon'twanttodoitanymore."

UnitedVoicehasexpressedconcernthatcleanerssuchasAntonioandFredericoarebeingsubjectedtoshamcontractingarrangements.

ISSisthecompanycontractedtoprovidecleaningservicesattheMCG.Inastatementitexpressedconcernabouttheallegationsbeingmadeagainstitssub-contractor,theFirstGroup.ISSsaidittakestheallegationsraisedveryseriouslyasitpridesitselfonbeinganethicalemployer.Itsaysit'scontactedtheFirstGroupandisworkingwithittoensuretheFirstGroupisadheringtotheconditionsofitscontract.

TheMelbourneCricketClubsaysifthere'sevidencecontractorsarenotmeetingemploymentobligationsitwilltakeaction.

ReyviMarinasfromMigranteMelbournehasstatedhefirstheardoftheseallegationsin2011."Inthepastfewyearswehadbeenapproachedbyindividualstudents,someofwhomareingroups,youknowaskingabouttheircourses,whetherornotthatcoursewillqualifythemtobecomeapermanentresidentsothenwefinallyconcludedthattheproblemismoredeeperthanthat,theissueofunderpayment,nobenefitsatallworkingasacleanerhereattheMCG."

UnitedVoicehasexpressedconcernthatcleanersattheMCGhavebeenpaid$16anhourlessthantheawardrate,accordingtoMigrante.

Case2

FiveFilipinoworkersunder457visaswerehiredintheirnominatedoccupations,butwerenotperformingtheirsupposedoccupationsandinsteadworkaslabourersandcleaners.

33 GregDyett,SBSWorldNewsRadio

TheyweremaderedundantinearlyMay2013.Theyhadallegedlysufferedverbalabuses,swearing,bullyingandthreatsofdeportation.

Theyhadallegedlypaidexorbitantfeesofatleast$12,000tothelabourhireagentupfront.

CaseprovidedbyWalkFree

WalkFreereportedacasewhereapersonona457visarangtheFairWorkOmbudsmanforlegaladviceandweretoldtheyhadtogivethenameoftheiremployerbeforetheywouldbeassisted.Theyhungupbeforereceivinganyadvice.

7-ElevenFranchises

InalettertotheProductivityCommission,theFairWorkOmbudsmanreportedthatitwasholdinganinquiryinto7-ElevenfranchisesacrossVictoria,NSWandQueensland.Theinquiryislookingprimarilyintoallegationsofsystemicnon-compliance,particularlyunderpaymentofwagesandfalserecord-keeping,butarealsokeentolearnifthe7-Elevenfranchisemodelisacontributingfactorandifthereisliabilitythroughthesupplychain.34

LicensingSystemforLabourHireBusinesses

Intheabsenceofthenationallicensingsystemforlabourhirebusinesses,theVictorianGovernmentshouldadoptlegislationsimilartootherOECDjurisdictionsthatrequireslabourhirebusinesses.Thisshouldapplyforspecificindustrieswheretherearesignificantrisksofhumantrafficking,forcedlabouroregregiousexploitation.Thefeaturesofthelicensingregimewouldbe:

• Apublicregisteroflicensedlabourhireproviders;
• Arequirementtorevealtherealbeneficialownersofalabourhirebusiness;
• Atestthatapersonestablishing,orparticipatinginthemanagementof35, alabourhirebusinessisafitandproperpersonanddoesnothavearelevantcriminalrecord;
• Thepaymentofabondbythelabourhirebusinessasadeterrentagainstphoenixactivity;
• Thresholds of capitalisation of assets owned by the labour hire business as a furtherdeterrentagainstphoenixactivity;
• Thecreationofanoffencetoconductlabourhireactivitieswithoutbeinglicensed;
• Thecreationofanoffenceforintentionallystructuringanemploymentrelationshiptoavoidtheobligationofbeinglicensedasalabourhirebusiness;
• Thecreationofoffencesforprovidingfalseormisleadinginformationinregisteringalabourhirebusiness;and
• Anoffenceforanotherbusinesstouselabourhireservicesfromabusinessthatisnotlicensedasalabourhirebusiness.

Thelicensingsystemwould:

• Makeitharderforcriminalsandotherunsuitablepeopletosetuporcontrollabourhirebusinesses;
• Makeiteasiertodetectandidentifyunethicallabourhirebusinesses;
• Makeiteasierfortheusersoflabourhireservicestoknowtheyaredealingwithareputableprovider;

34NatalieJames,FairWorkOmbudsman,LettertotheProductivityCommission,18September2015,p.2.

35SimilartoSection206oftheCorporationsAct.

• Providealevelofsafeguardagainstphoenixactivity;
• Makeitharderforlabourhirebusinessestobesetupwith‘front’peoplewhoarenottherealownersorcontrollersofthebusiness;
• Provide anincentiveforlabour hirebusinessesin particular industriesto clean uptheirindustrytonolongerberegardedasrequiringlabourhirelicensing;
• Reducetheincidenceofhumantraffickingandforcedlabourthroughlabourhireproviders;
• Reduce the likelihood of people on temporary work visas will be subjected to unlawfultreatmentintheirwagesandconditions;and
• Increasetheabilityofthirdpartybodiestofindpeopleontemporaryworkvisasinneedofassistance,asapublicregisteroflabourhirebusinesseswillmakeiteasiertofindwherethesebusinessesareoperating.

TheVictorianGovernmentshouldseektoalignitslicensingsystemwiththelicensingsystemofotherStatesthatmightintroducesuchasystem,providedthisdoesnotreducethelikelyeffectivenessofthelicensingsystem.

Theregimeislikelytoseeareductioninthenumberofpeopleprovidinglabourhireservicesinthetargetedindustries.Thatisdesirable,astheunethicallabourhirebusinessesareoftensmalloperationswhogainanunfaircompetitiveadvantageoverlegitimatelabourhirebusinesses,throughlowercostsoftenlinked toillegalunderpaymentofwagesand illegal deduction ofwagesfrompeopleontemporaryworkvisas.

Thisisadisruptivelawenforcementmeasurewhichwillhelppreventcrime,byreducingtheprofitfromthecriminalactivity(throughthepaymentofthebond)andincreasestheriskofbeingcaughtandsanctioned.

TheFairWorkOmbudsmanhasstatedthat:36

IllegalphoenixactivitypresentsaseriouschallengetotheFWO’sabilitytoenforceAustralianworkplacelaws.Whilethereisnolegaldefinitionofphoenixactivity,thetermgenerallydescribesthesituationthatariseswherecompaniesarederegisteredorliquidatedwiththeintentionofavoidingliabilitiesandcontinuingtheoperationofthebusiness.

TheFairWorkOmbudsmanfurtherstated“TheFWOgenerallycannottakeorpursueenforcementactionagainstcompaniesthathaveenteredintoliquidation.”37TheFairWorkOmbudsmanalsonoted:38

….ASIC’sposition,setoutin itspre-andpost-draftsubmissionstotheProductivityCommission’srecentInquiryintobusinessset-up,transferandclosure,thattheremaybe‘meritinconsideringreformsthatspecificallytargetthemisconductratherthanthesymptomsofillegalphoenixactivityandmakeit easiertoprovethatillegalphoenixactivityhasoccurred’,giventhatexistingprovisions,suchassection596AB,havehad‘limitedeffectivenesstodate’,duetotherequirementtoprove,toacriminalstandardof

36NatalieJames,FairWorkOmbudsman,LettertotheProductivityCommission,18September2015,p.4.

37NatalieJames,FairWorkOmbudsman,LettertotheProductivityCommission,18September2015,p.

4.

38NatalieJames,FairWorkOmbudsman,LettertotheProductivityCommission,18September2015,p.6.

proof,thatapersonsubjectivelyintendedtopreventorreducerecoveryofemployeeentitlements.

Thus,thelicensingoflabourhirebusinesseswithmeasurestocombatphoenixactivitywouldassistinprotectingworkplacelaws.

LicensingregimesforlabourhirebusinessesexistsinmostEuropeanUnioncountries,wherelicensinghasgonehand-in-handwithimplementationoftheEUDirectiveonTemporaryAgencyWorkers,aswellasJapan,SingaporeandSouthKorea.

TherearenolawsinotherStatesandTerritoriesthatfunctionaseffectivelicensingoflabourhirebusinesses.TheWAEmploymentAgentsAct1976onlycoversemploymentagents,whicharebusinessesthatsourceandplaceemployeesinotherbusinesses.Alabourhirebusinessisnotsubjecttotheprovisionsof theWAActiftheydirectlyemploythe employeesandtheemployeesarethendoingworkforathirdpartybusiness.TheQueenslandPrivateEmploymentAgentsAct2005doesnotrequirethelicensingoflabourhirebusinesses.ItinsteadprovidesaCodeofConducttocoversuchbusinesses,butwithnoauthorityinQueenslandtoenforcetheprovisionsoftheCode.

Alicensingsystemforlabourhirebusinessesinhighriskindustrieswillbewelcomedbymanybusinessesthatrelyonlabourhireservicesandbybusinessesthatpurchasefrombusinessesthatrelyonlabourhireservices(especiallywherethebusinessesinquestionhavesufferedreputationaldamagefordealingwithsuppliersthathaveusedexploitativelabourhireproviders).Itwillbewelcomedbysomereputablelabourhirebusinessesthatneedtocompetewithexploitativelabourhirebusinesses.Itwillbewelcomedbycivilsocietyorganisationsthatareconcernedabouthumantrafficking,forcedlabourandunlawfullabourpractices.

Asanexampleof anindustryrepresentativeexpressingsupportforlicensingoflabourhirebusinessesinthehorticulturalsector,hereispartofthetranscriptoftheJointStandingCommitteeonMigrationattheirhearinginMelbourneon28OctoberfortheinquiryintotheSeasonalWorkerProgramme:39

MsVamakinouMP:Areyouawareofany[labourhirebusinesses]thathavebeenprosecuted?

MrDollisson[ChiefExecutiveOfficer,AppleandPearAustralia;andDeputyChair,VoiceofHorticulture]:Ifyoucanfindthem,yes.

MsVamakinou:Thatisagoodpoint:ifyoucanfindthem.

MrDollisson:Thatispartoftheproblem.Theyarethereonedayandgonethenext.

MsVamvakinou:So,theyareprettyslippery.

MsFarrow[IndustryServiceManager,AppleandPearAustralia]:Thelabourhirefirmsareoftencalledphoenixfirms.

Chair:Whichbringsusbacktotheneedtohavethemlicensedorregisteredinsomeway.

MsFarrow:Theygetprosecutedinonearea,orchasedbytheFairWorkOmbudsmaninonearea,andtheymovetoanother.

MrDollisson:Andyouarequiteright:iftheywerelicensedandchecked,thenyoucouldtrackthemdown.TheDepartmentofAgricultureandtheDepartmentofForeignAffairsandtheimmigrationDepartmenthavetheVIVOsystemwhereyoucancheck.

Sayyouhave400pickerscomingintoharvestyourcherries.Youcansitthereanddownloadandcheckeveryoneoftheirvisas.But,firstly,wedonothaveaccesstotheinternet,andmostofthetelephonesdonotworkintheareaswherewegrow.AndbythetimeIcheck400visasthecropisgone.So,thatisnotaviablesolution.Hencethegreencard.ButIthinktherealsolutionislicensingthelabourcontractors,andsomewayoflicensingandpolicingthat….

MsVamakinou:Licensingthelabourhirecompanieswouldstampoutthisphoenixfirmphenomenon.

MrDollisson:Yes–whichwerethebulkofthefirmsthatwerecriticisedintheFourCornersprogram.Withmostofthosetheywouldnotinterviewthefirms,becausetheywerenotaround.Theywerehereonedayandgonethenext….

AUSVEGalsowentsomewaytowardssupportingalicensingsystemforlabourhirebusinessesintheirevidencetotheCommittee:40

WhatwehaveputtotheFederalGovernmentinthelastfortnightisanewsolution.Wehavesuggestedthatitshouldbeapositivesteptoberegisteredasalabour hirecompany.Tobeabletooperateinthisspace,youshouldbeonaregisternationally.Youshouldhavetohavesomecertificationfromimmigration.FairWorkAustralia,theTaxationOfficeandyourstateworkcover.SomebodysittingatadeskinCanberracouldcoordinatethatandyoucouldhaveaproforma.Itisnotacarteblancheforlife.Youstillwouldbesubjecttoauditandexaminationbutyoureallyshouldhavetosaythatatthisparticulartimetheimmigrationdepartmenthasnoparticularmattersonfootorofconcern,thattheATOisnotawareofanynoncomplianceatthistime.Ifyoumeetthatcriterion,youwouldthengoontoaregisterandbeapproved.Ifyouarenotonthatregisteryoushouldnotbeinthepositionbecause,frankly,youcanbringinlawsforlabourhirecompaniesand,assomeonementionedinearlierevidence,theyjustshutthecompanydown,pocketthemoneyanddoabolt….

TheVictorianFarmersFederationstatedina4May2015mediareleasethattheysupportedtheVictorianGovernment’spledgetoregulatealllabourhirecompanies.

Thesuccessofthelicensingsystemcanbemeasuredby:

• Thechangeintheincidenceofhumantrafficking,forcedlabourandegregiousviolationsoftheFairWorkActandrelevantAwardsdetected.However,theincidenceofdetectioncanbeimpactedbytheeffectivenessofdetectionmethodsratherthantheimpactof thelicensingsystem;
• Thechangeovertimeofunlicensedlabourhirebusinessesoperatingina particularindustry;
• Themarketshareoflicensedlabourhirecompaniesoperatinginaparticularindustryovertime;
• Areductioninthenumberofcasesofphoenixactivitybylabourhirebusinesses;and
• Areductioninthenumberofcasesinwhichtheownersandoperatorsoflabourhirebusinessesareabletofleewhileleavingemployeesunpaid.

Thoroughassessmentoftheimpactofalabourhirebusinesslicensingsystemwouldrequireresearchontheabovemeasurespriortoimplementationofthesystemforareasonableperiodafterimplementation(atleastanassessment12monthsafterimplementation).

PreviousReviewof TemporaryMigrant WorkerVisas

TheUnitnotesthatpreviousindependentreviewoftheSubclass457ProgrammebyJohnAzarias,JennyLambert,PeterMcDonaldandKatieMalyon,‘RobustNewFoundations.AStreamlined,TransparentandResponsiveSystemforthe457Programme.AnIndependentReviewintoIntegrityintheSubclass457Programme’,whichwaspublishedinSeptember2014.ThecurrentGovernmentrespondedtotherecommendationsfromthatreviewearlierthisyear.

ThereviewprovidedfewrecommendationstoassistinstampingouthumantraffickingandforcedlabourwithintheSubclass457Programme,whichtheUnitregardsasdisappointing.

TheUnitnotesthattherecommendationsfromthereviewincluded(Recommendation12.1)thatsponsorsberequiredtoinclude,aspartofthesignedemploymentcontract,asummaryofvisaholderrightspreparedbythedepartmentandtheFairWorkOmbudsman’sFairWorkInformationStatement.TheUnitnotestheGovernmentsupportedtheimplementationofthismeasure.TheUnitbelievesitisvitalthisinformationwouldbeprovidedinthelanguagethevisaholder is mostproficientin.However, in thecases the Unithashad dealings with, simplyprovidingatemporaryworkvisaholderwithwritteninformationiscompletelyinsufficient.Thereisaneedtoputthemintouchwithanon-governmentorganisationtheycangotoshouldtheybesubjectedtoexploitationorabuse.

Thereviewmadeaweakrecommendation(Recommendation16)that“considerationbegiventotheallocationofmoreresourcestoprogrammesaimedathelpingsponsorsunderstandandcomplywiththeirobligations,whetherthoseprogrammesare delivered directlyto sponsorsthroughthemigrationadviceprofession.”TheGovernmentindicateditonly“supportedinprinciple”thisrecommendationforconsiderationtobegiven.

Thereviewdidmakethepositiverecommendation(Recommendation17)that“greaterprioritybegiventomonitoring,andthatthedepartmentcontinuetoenhanceitscompliancemodeltoensurethoseresourcesareappliedefficientlyandeffectively”,whichwassupportedbytheGovernment.However,itisuncleartotheUnitwhatactualactiontheFederalGovernmenttookinresponsetothisrecommendation.

Thereviewrecommended(Recommendation21.1)“Thatdedicatedresourcingbemadeavailabletothedepartmenttoenabletheinvestigationandprosecutionofcivilpenaltyapplicationsandcourtorders”,whichtheGovernmentindicateditsupportedsubjecttofurtherconsultation.TheUnitisagainunclearwhatprogresshasbeenmadeonimplementingthisrecommendation.

DrMarkZirnsakDirector

JusticeandInternationalMissionUnitPhone:+61-3-92515265

E-mail:

Acknowledgements:TheJusticeandInternationalMissionUnitwouldliketothankMigranteAustralia,theSalvationArmyFreedomPartnershiptoEndModernSlaveryandWalkFree’scontributionstothissubmission.