“Easy targets”: Business to pay $65,000 for underpaying 19 workers, not keeping records

A Brisbane-based labour-hire company has been ordered to backpay 19 international workers more than $50,000 over allegations it contravened its own enterprise agreement.

The Fair Work Ombudsman (FWO) has signed a court enforceable undertaking with the business, which will also require it to pay a $15,000 fine.

Inspectors alleged the business was paying 19 Vanuatu nationals employed under the Seasonal Worker Programme under a “group piecework rate” based on how much fruit the entire team picked.

However, the company enterprise agreement states workers must be paid based on individual productivity.

No records were kept on hours worked and additional money was incorrectly deducted from wages for wet weather gear, the FWO alleged.

Sector under a microscope

The horticultural sector has been under a microscope in recent years after a string of underpayment scandals involving international workers.

Farmers have complained it has been difficult to secure enough fruit pickers, but regulators have lashed the sector for widespread non-compliance with workplace laws.

Fair work ombudsman Sandra Parker said the latest undertaking “sent a clear message” to employers about their piecework agreements.

Improving compliance across the horticulture industry is a priority for the Fair Work Ombudsman after our Harvest Trail Inquiry found widespread breaches of the Fair Work Act,” Parker said in a statement.

“All horticultural businesses must be aware of how to lawfully pay their workers and, if using piece rates, ensure workers are paid in accordance with piecework agreements. We also advise that employers should keep accurate records of hours worked.”

“Risk of overbearing regulation”

There’s additional pressure to act on the ombudsman herself after a recent inquiry into migrant workers identified the need for a register of labour hire businesses in the horticulture sector.

Under that register, which has bipartisan support, labour hire businesses in the industry would be required to sign up to a list and comply with certain conditions.

Workplace lawyer Peter Vitale says employers paying a piece rate need to ensure they’re paying at least 15% more than the minimum hourly rate under the relevant award.

“Not only is the ombudsman looking very carefully at this sector, [employers] are now subject to labour hire licensing laws in Victoria and Queensland, which adds a degree of focus to their activity,” Vitale tells SmartCompany.

Vitale says the regulatory hammer is on the way, but there’s a risk it may fall flat.

“Nobody denies there’s a shortage of labour available in this sector and the risk of overbearing regulation is you go a step beyond compliance and you actually make it too difficult to operate,” he says.

“Easy targets”

Workplace Law managing director Athena Koelmeyer says businesses not keeping records are “easy targets” for the FWO.

“We’ve seen for a long time the FWO has made it a mandate to deliberately go out and protect vulnerable workers,” she tells SmartCompany.

“Employers failing to keep basic records, including hours of work, are basically handing themselves over on a plate.”

Koelmeyer says traditional challenges in the horticulture sector stem back to a tyranny of distance, with most operations in regional areas.

However, recently implemented modern slavery legislation forcing large businesses to audit their supply chains is already having an effect on the sector.

Farmers are being advised to ensure they’re compliant with relevant workplace laws or risk losing major retail partners.

“They need to understand they operate under the same laws as every other employer in the country — there are no special rules that apply to them,” Vitale says.

“Quite simply the onus is on them to understand their legal obligations and comply with them.”

NOW READ: ‘Widespread and entrenched’: Migrant worker exploitation could attract jail time

NOW READ: Sushi blitz: Fair Work Ombudsman recovers $746,000 in unpaid wages in targeted audit