Three quarters of wages fraud involves foreign workers

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By Leith van Onselen

The conga-line of reports about wages fraud involving temporary foreign workers continues to grow with Fairfax today revealing that foreigners are involved in more than three-quarters of legal cases initiated by the Fair Work Ombudsman against unscrupulous employers:

More than three quarters of wage-fraud-related court actions taken by the Fair Work Ombudsman involved foreign workers on visas.

The figures, to be revealed in a speech by Fair Work Ombudsman Natalie James at the Migration Institute of Australia national conference on Friday, come to light amid growing calls for the government to stamp out foreign worker exploitation.

The regulator will reveal it doubled the amount of money recovered for visa holders to almost $3 million in 2015, some of that relating to cases involving convenience store giant 7-Eleven.

“This is a worrying upward trend that shows the seriousness of the conduct we are seeing,” according to Ms James.

The comments came as the Ombudsman launched fresh court action against another 7-Eleven franchisee over underpayment of workers, taking its total actions against 7-Eleven franchisees to nine in the past few years…

How many more reports are needed before the Turnbull Government acts on the widespread exploitation and rorting of Australia’s temporary visa system?

This rorting was outlined in all of its hideous glory in the recent Senate Education and Employment References Committee report entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, which noted that Australia’s Working Holiday Maker and student visa holders were “consistently reported to suffer widespread exploitation in the Australian workforce”.

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The Committee also noted that undocumented foreign workers were eroding labour standards for Australian employees:

The committee received evidence that undocumented work by migrant labour has resulted not only in the severe exploitation of highly vulnerable workers, but also impacted Australia’s labour markets, including placing downward pressure on the wages and conditions of Australian workers and undercutting the majority of legitimate employers that abide by Australian workplace laws.

And it took direct aim at the 457 visa system and recommended sweeping reforms.

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Blind Freddy can see that Australia’s labour migration system is broken. Workers on these visas are being systemically exploited, undermining job prospects for locals. And yet the Australian Government remains in denial.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.