Fair Work Ombudsman helpless to stop giant visa rort

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By Leith van Onselen

Over the past two years, we have witnessed a veritable conga-line of rorts and exploitation involving foreign workers.

This rorting has been widespread and systemic, including: foreign students working at 7-Eleven, petrol stations Caltex and United Petroleum, fast food outlets like Pizza Hut and Dominos, and the like; so-called “skilled” 457 visa holders working in IT, engineering, and other professions; as well as seasonal workers employed as slaves to work on farms.

Yesterday, Fair Work Ombudsman (FWO) Natalie James addressed a Senate inquiry examining proposed changes to the Fair Work Act, whereby she conceded that the FWO has limited capacity to combat employers who deliberately ignore workplace laws because they feel that the potential financial penalties for underpaying staff are sufficiently low to make non-compliance worth the risk. Ms James also warned that employers will continue to exploit vulnerable workers unless the sanctions for non-compliance are sufficiently increased to provide a genuine deterrent. From The Canberra Times:

Ms James admitted her office had limited capacity “to disrupt the most deliberate and systemic conduct, or to reverse the apparent culture of non-compliance in high risk industries and sectors”.

“While the system is fit-for-purpose to address accidental or negligent non‑compliance, it has proven not to be fit-for-purpose when it comes to addressing the deliberate and systemic unlawfulness that some unscrupulous operators adopt as a business model,” she said.

“These operators set up their business model on the basis that a successful investigation or a court imposed penalty is simply a calculated risk or the cost of doing business.

“They consider the likelihood of being caught or the quantum of the penalties to be so low, that it is worth exploiting their workforce”…

“This is not all or even most employers. But it is a pernicious and persistent minority. A minority that is distorting our labour markets and tarnishing our reputation as a fair and decent place to work,” she said.

“To put it simply, exploitation cannot be stamped out if the settings remain the same. If something doesn’t change, the script will not change and we will continue to see these stories on the front page of our newspapers”…

Ms James addressed the plight of migrant workers paid as little as $10 or less per hour, well below the $17.70 federal minimum wage.

“Stories, frankly, that still shock me on occasion because of the calculated and malevolent motivations behind the appalling treatment that some migrant workers face in our country…”

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Sadly, Australia’s immigration system has morphed into one giant rort that is exploiting vulnerable foreign workers, robbing young Australians of employment opportunities, as well as choking the living standards of residents in our major cities, who are having to contend with stagnant wages growth, ever-rising congestion, deteriorating housing affordability, and overall reduced livability.

Rather than labeling anyone wanting a reduction in Australia’s world-leading immigration program “political extremists”, Labor leader Bill Shorten should instead stand up for Australian workers and commit to cracking down on wages fraud and the myriad of visa rorts that are depriving Australians of a future.

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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.