Labor market standards implode around migrant exploitation

By Leith van Onselen

Ever since the 7-Eleven migrant worker scandal broke in 2015, there has been a regular flow of stories emerging about the systemic abuse of Australia’s various migrant worker programs.

The issue was highlighted in all of its hideous glory when the Senate Education and Employment References Committee released a scathing report entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, which documented the abuses of Australia’s visa system for foreign workers.

Despite this Senate report being released last year, there has so far been minimal action from the federal government, with widespread rorting of Australia’s visa program continuing unabated.

As reported in Fairfax in August, Fair Work Ombudsman Natalie James revealed that people on visas continue to be exploited at an alarming rate, particularly those with limited English-language skills.

Today, three separate articles relating to exploitation have been reported by Australia’s press.

The first article involves Dominos Pizza, which is currently under investigation for wages fraud. As reported by Fairfax’s Adele Ferguson, a Fair Work Commission (FWC) hearing is scheduled for 1 November regarding an application to terminate existing enterprise agreements for Domino’s Pizza Enterprises staff, which has left workers short-changed:

Pizza giant Domino’s Enterprises, its network of franchisees, unions and thousands of workers will be itching for the outcome of a Fair Work Commission hearing that relates to more than 26 applications by two unions to terminate various enterprise agreements.

If the agreements are terminated, workers will be put on a modern award – the wages safety net – which would make them instantly better off…

Franchisees are already on high alert as the Fair Work Ombudsman conducts an investigation of the network after allegations of systemic wage fraud…

At the investor briefing Meij said $1.25 million in underpaid wages has been recovered after completing 322 store audits. Over the past few years less than $6 million of wages has been repaid to workers…

From a personal perspective I continue to receive a steady stream of emails and calls from workers, former workers and franchisees contacting me about tough conditions and underpayment issues. In one case a delivery driver said he was working at least 30 minutes before and after each shift for no money.

The second article, by Fairfax’s Sarah Danckert, discusses a three-year investigation by the Fair Work Ombudsman, which found that trolley collectors at Woolworths stores have been paid significantly below the hourly wage rate since 2014. It also notes that Coles was embroiled in similar revelations in 2014 regarding underpayment by contractors:

Woolworths will pick up the tab for underpaid trolley collectors where the contractor responsible for ripping off the workers has gone under or disappeared after an investigation found rampant exploitation of workers.

Woolworths agreed to assist in the back pay of its contracted trolley collectors stretching back to July 2014 under a compliance deed it has signed with the workplace regulator.

…a three-year inquiry by the regulator found trolley collectors at Woolworths supermarkets were being paid as little as $10 an hour despite casual rates for that work being $22.51 in 2014.

Under the deed, Woolworths will back-pay any trolley collector employed during the period from July 1, 2014 until the present if the primary contractor has failed to rectify wages within 20 days…

In 2016, a FWO inquiry found contractors at a staggering 79 per cent of the 130 Woolworths stores visited by the regulator in 2015 were in violation of workplace laws…

The third article comes from The AFR’s David Marin-Guzman, who reports that the owner of a Zarraffa’s Coffee franchise in Queensland could face prosecution after the FWC approved an enterprise agreement based a false statutory declaration, resulting in staff being short-changed:

The Fair Work Commission has referred a coffee franchisee’s owners to the federal police for allegedly lying about an enterprise agreement that traded away penalty rates.

The full bench found that the owners of Zarraffa’s Coffee in West Ipswich, Queensland, provided false statutory declarations claiming a majority of staff had voted up its trade off of penalty rates when it did not have any staff and had not even opened its store.

The statutory declarations, which also falsely claimed the deal left workers better off than the award despite leaving part-timers and casuals $40 a week worse off, resulted in the commission approving the agreement late last year…

That’s three separate articles relating to worker exploitation in just one day, which again highlights just how systemic the exploitation of workers is across Australia.

The sad reality is that there are now entire business lines, firms and sectors whose business models rely heavily on the systematic undermining of wages and, worse, running virtual slave labour.

We have seen this in fast food, convenience stores, agriculture, building, accounting, IT, engineering, education, transport, the gig economy and no doubt it is even more widespread.

Back in November, Fairfax reported that foreign workers are involved in more than three-quarters of legal cases initiated by the Fair Work Ombudsman against unscrupulous employers.

How many more examples do we need before our politicians take action and close down the various avenues to exploitation? They cannot credibly bemoan Australia’s record low wages growth while ignoring the systemic undermining of Australian workers.

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    • kiwikarynMEMBER

      Why else would you bother hiring them? If they had to be paid the same as an English speaking, educated, qualified Australian, you would hire an English speaking, educated, qualified Australian.

    • MediocritasMEMBER

      Then when all the workers are exploited and wages are trashed, they’ll wonder why profits are evaporating and proceed to complain about people not consuming enough with their non-existent incomes.

    • Also the reason that real incomes have flat-lined and gone into decline. Just a mimic of the failing US model where the focus is on cost arbitrage rather than investing in people, capital, etc. to generate ‘competitive’ products and services to create value.

  1. This deplorable situation did not occur by accident under the caring and watchful eye of Straya’s lawmakers and law enforcers. It has been built for purpose with the precision of an architect’s building plan.
    The ‘tell’ is the unwillingness of the Fed gov’t to be concerned about what’s occurred as it would threaten the immigration tap which is currently turned to wfo.
    Like so many aspects of Strayan commerce-‘Gamed’ for Mates. Expect labour conditions to degenerate for all but C- Suites and civil servants.

  2. Interestingly, Directors of 7-Eleven are soon to head to India on a ‘cultural awareness tour’.
    This does not sound right to me. There must be some suspicion that the franchise operator is going over to India vet and recruit more potential franchisees. Why would they go to India on a cultural awareness tour?
    Is 7-Eleven perpetuating a massive immigration scam or is it a real business?

    • 7-11 stands for “7 days pay for 11 days worked” or “7 paychecks for 11 workers”

      I await with trepidation the introduction of the concept of “virtual worker”: they’re there for the purpose of tax deductions, but not there when it comes to paying them.

    • A false dichotomy, I think. It’s a real business perpetuating a massive immigration scam to line the pockets of the C-Suite while exploiting immigrant slaves and rogering the resident population. Without lube.

      • The is a huge industry minting money off this.

        This is how CPA made their millions, verifying accounting qualifications. EA (Engineers Australia) does the same thing for IT and engineers.

        Immigration agents are also minting it – my company employs them the handle the importation of 457 holders.

        When a local resigns, we just replace him with a 457 holder or two. The immigration agent handles all the paperwork “proving’ that we couldn’t attract a suitable local.

        So for each immigrant there is around $4000 for the agent, $3000 for EA to “vet” their qualifications and $5000 to the Immigration dept. All these fees can now be deducted from the immigrant’s wages thanks to Turnbull’s recent 457 visa “reform”.

  3. $8/hr 457 IT workers are still the go in CBD Melb I’m told. this isn’t going to stop, and our regulators don’t seem to be able to control it, or are complicit. it might all be part of the population push to drive consumption.

    • The only solution is to charge $140/day for each work visa. Japan is awesome. It has a shrinking population and an unemployment rate of 2.8%!

  4. japan80s_bubblejazzMEMBER

    Exploited migrants, contributing to the deterioration of working conditions, stoking demand for limited housing supply and increasing the customer base. The system is working as intended.

  5. “…a three-year inquiry by the regulator found trolley collectors at Woolworths supermarkets were being paid as little as $10 an hour despite casual rates for that work being $22.51 in 2014.”

    Herein lies at least a lot of the problem.

    Collecting trolleys isn’t worth $22.51 per hour.

    Absurdly high, non-economic, minimum wages meets struggling business which will try almost anything to avoid having to pay them.

    When lack of compliance is this high, it’s telling you that there’s something wrong with the underlying rule set.

    • They can do what Aldi does. Get shoppers to unlock trolleys using $2 coins – thus creating a massive incentive to return the trolleys.

      But maybe it is beyond them, they jumped into the hardware market (Masters) and tried to sell gun safes to Sydneysiders…

      Also, why not get security guards to collect trolleys? They walk around anyway.

      • MediocritasMEMBER

        Also encourages shoppers to get a little extra exercise and to reinforce the behavioural pattern of putting things back (a valuable life skill). Trolley collector is a bollocks job anyway.

    • Absurdly high, non-economic, minimum wages meets struggling business which will try almost anything to avoid having to pay them.

      LOL. Woolworths as a “struggling business”.

      The real question here is should someone be able to earn enough collecting trolleys (insert other unskilled work if you prefer) for forty hours a week to maintain a basic lifestyle including food, shelter, clothing, and a little bit of leisure activity here and there.

      That is the point of the minimum wage. To set society’s quality of life floor.

      Everyone is subject to the same minimum wage laws. If a business can’t afford to pay its staff, then it’s either not charging enough, taking too much profit, or working with a fundamentally broken business model.

      • It is quite a sick belief of the Greens that people who do not have a job should not have shelter – especially given that the Greens gave out 457 visas for $0 each when they had Gillard over a barrel.

  6. 2.5 million third world migrant guestworkers.
    2.1 million Temporary Resident & 400k or 5% also illegally working on a tourist of visitor visas. (ABF).
    19% of the entire workforce.
    Most third world unskilled fake ID, on a fake visa pretext. Little or no tax paid.
    $105 billion underground industry. Blackmarket foreign run labor hire rings, illicit & vice importation.

    $31 billion outflow back to the agent procurers, loan sharks and third world families.
    Massively economically & socially destructive.
    Run top to bottom & sideways by foreign criminal syndicates.
    Destroyed wages, employment, youth training, housing, education, public infrastructure & standards of living.

    The largest, most corrupt third world migrant guestworker racket in the OECD.